Can a Pub make you money???

Dazzler88

i was recently thinking of leasing a Pub.i think that in a lot of smaller towns there is good money to be made in Pubs.their was a Pub recently leased in my town for around 500euro/month.The first month it opened they ran a recession busting weekends,this was from Friday to Sunday all drinks 3euro,what a sucess it was.You could'nt move in the spot,packed every weekend.Surely if you ran your pub right you'd still make a decent profit.

Bandara

Dazzler88 wrote: »

i was recently thinking of leasing a Pub.i think that in a lot of smaller towns there is good money to be made in Pubs.their was a Pub recently leased in my town for around 500euro/month.The first month it opened they ran a recession busting weekends,this was from Friday to Sunday all drinks 3euro,what a sucess it was.You could'nt move in the spot,packed evert weekend.Surely if you ran your pub right you'd still make a decent profit.

They are essentially loss leading (or greatly profit reducing) there only busy nights, what happens on the other 5 days?

Bandara

Dazzler88 wrote: »

i was recently thinking of leasing a Pub.i think that in a lot of smaller towns there is good money to be made in Pubs.their was a Pub recently leased in my town for around 500euro/month.The first month it opened they ran a recession busting weekends,this was from Friday to Sunday all drinks 3euro,what a sucess it was.You could'nt move in the spot,packed evert weekend.Surely if you ran your pub right you'd still make a decent profit.

but in answer to your question, yes pubs can make money, huge huge money.

If they are the right pub in the right location. The pubs available for €500 a month (think about that for a minute) are not huge money makers, not by a long way.

Dazzler88

Hammertime wrote: »

but in answer to your question, yes pubs can make money, huge huge money.

If they are the right pub in the right location. The pubs available for €500 a month (think about that for a minute) are not huge money makers, not by a long way.

i dont think a lease of €500 is much.this guy was able to sell drinks for €3 when he first opened and make a profit,now he is selling them at €4,so he is definetly making a profit.What the average lease on a pub???

finisklin

Dazzler88 wrote: »

i was recently thinking of leasing a Pub.i think that in a lot of smaller towns there is good money to be made in Pubs.

Why would a pub work in a smaller town? I think you need to be careful in your thinking on this......maybe do some research and look at it in other ways. For example;

• How many new pubs have opened in the last few years in your town? Are they still in business?
• How many have closed recently? Why? Can you ask previous owners/mgt for their advice?
• Do young people, the yoof buy from the off license and then go to the pubs later on when they are tanked?

The answers might give you a better insight and understanding of the market.

Best of luck with it.

Bandara

Dazzler88 wrote: »

i dont think a lease of €500 is much.this guy was able to sell drinks for €3 when he first opened and make a profit,now he is selling them at €4,so he is definetly making a profit.What the average lease on a pub???

the fact that its only €500 is what I'm getting at, so basically whoever currently owes/operates that pub is looking to get out of it and is prepared to do so for €500 a month.

They are either a very philanthropic person. Or else the place is losing its shirt.

Bandara

Dazzler88 wrote: »

i dont think a lease of €500 is much.this guy was able to sell drinks for €3 when he first opened and make a profit,now he is selling them at €4,so he is definetly making a profit.What the average lease on a pub???

As an aside, why do you presume he is making a profit at €3 a drink?

Dazzler88

finisklin wrote: »

Why would a pub work in a smaller town?

the reason Pubs do well in some small towns is because they are great drinking towns.most lads come in from the surronding country areas at weekends and they know how to spend.There is a group of drinkers in my local and they go out Friday and Saturday night aslo all day Sunday.These people aren't the ones you would see sipping a quiet drink in the corner of the Pub,their real hard drinkers.Also smaller towns are great for 21st's,nearly every weekend dince Xmas there has been a 21st,that means packed Sat nite and a crew from the party drinkin all day sunday.Also in these rural towns with the downturn in the economy their is loys of unemployed youth,they get their money of a Wednesday and head straight for the Pub.

Dazzler88

Hammertime wrote: »

As an aside, why do you presume he is making a profit at €3 a drink?

of course,he wouldnt have done it otherwise.If you think about it a shot vodka is €3 and there is 28 shots in every bottle(1000ml/35.5 standard measure),that means on 1 bottle you get back €84 and they probably buy that bottle for €25 cost price.Thats only on a bottle of vodka which is only a drop in the ocean compared to the other drinks.

Bandara

Dazzler88 wrote: »

of course,he wouldnt have done it otherwise.If you think about it a shot vodka is €3 and there is 28 shots in every bottle(1000ml/35.5 standard measure),that means on 1 bottle you get back €84 and they probably buy that bottle for €25 cost price.Thats only on a bottle of vodka which is only a drop in the ocean compared to the other drinks.

Dazzler,

I'm not having a go at you here but your far too 'flippant' (for want of a better word) about how easy it appears to be to make money in the pub game.

Taking your vodka example, so your 'making' €84 a bottle, so you have to sell 28 drinks to make 84 quid, then rent, rates, electricity, insurance, security, maintenance, bank charges etc etc etc etc come out of that and then you have to wages of the staff.

€84 quid will just about pay a floor person for the night.

Your not really thinking this through rationally enough.

Again I make the point if it was so profitable why is the pub available to lease for 500 a month?

finally, your again becoming fixated on the Fri night sat night and all day sunday trade, you need to be lookig at the worse times, not getting excited about the busy ones.

What about Mon-Tue-Wed-Thurs-Fri daytime-sat daytime ?


edit - He could be selling them at €3 to get his business established.

Dazzler88

Hammertime wrote: »

Taking your vodka example, so your 'making' €84 a bottle, so you have to sell 28 drinks to make 84 quid, then rent, rates, electricity, insurance, security, maintenance, bank charges etc etc etc etc come out of that and then you have to wages of the staff.

im not saying that you would run a pub from a bottle of vodka,thats silly.How many bottles of beer,vodka,whiskey and pints do you think a pub sells.I worked in a busy bar last year for their festival weekend.They sold 35 Bottles of Vodka,20 of Whiskey,15 Brandy.22 Gin.They also sold 52 Kegs of Beer(88 pints per Keg) and well over a 1000 bottles of Beer.Before you say this was an annually festival and thats not every weekend your right.But at the same time an average pub would go through 15/20 kegs a week,10/15 bottles of spirits,15/20 cases of Bottled Beer/Cider.I was only using the 1 bottle of Vodka as an example.In the case of the 500euro lease its probably because this pub was left to realtions that live in Dublin(5 of them in total),the orignal owners passed away and their renting the pub so cheap just to keep it open.The Pub has 5 apartments attached that they rent seperately,plus a Hairdressers,also rented seperately.

Dazzler, how about you go directly to the guy leasing the pub and say you're interested and can you see the books ? Or at least find out why he is leasing for 500 euro a month ? Something doesn't add up.

As Hammertime said, this guy is either a total philanthropist, has too many bigger, more profitable ventures and doesn't care about the pub anymore or else he knows something you don't.

Dazzler88

Deleted User wrote: »

Dazzler, how about you go directly to the guy leasing the pub and say you're interested and can you see the books ? Or at least find out why he is leasing for 500 euro a month ? Something doesn't add up.

As Hammertime said, this guy is either a total philanthropist, has too many bigger, more profitable ventures and doesn't care about the pub anymore or else he knows something you don't.

My apologises if you look back through the posts i didnt say the Pub i was looking to lease was 500euro/month,i was giving an example of a Pub in my town that was recently leased for this price.I would be very lucky to come along one as cheap as this again.

Out of curiosity, do you know why the original guy leased a pub for that amount ?

So you don't have a location or anything yet ?

Obviously pubs can make lots and lots of money but my instincts tell me only the very best locations (highest rent) would do well at the moment.

Dazzler88

Deleted User wrote: »

Out of curiosity, do you know why the original guy leased a pub for that amount ?

the orignal owners of this Pub passed away last year.They didnt have any children so it was left to nieces and nephews from Dublin(along with 200 acres of land they have since sold but that a different story),they leased the Pub out so cheap because they didnt want to sell it as it was the Pride and Joy of the orignal owners and it was only fair after all they willed to them.

stepbar

I seriously doubt the current owners are willing to rent out the pub at 500 eur a month. I'd say it's more like 500eur a week. And I also doubt that the other bar you came across was leased out at 500 eur per month. Don't believe all you hear.

Generally the pub trade run off a 33% gross profit margin, a third to the government in duty, a third to the brewer and a third to yourself. Some might have a higher margin, it's a rule of thumb more than anything else. Out of that margin you have to pay everything (e.g sky sports costs up on 3 grand plus!). You'd want to be selling some amount of pints to cover the costs.

I wouldn't even think about renting a pub unless you had at least 5 years experience working behind a bar (as a bar man and a bar manager) and were fully au fait with profit margins etc. Madness otherwise. Anyhow, don't expect that the crowds will keep coming. Don't under estimate the effects of the recession.

fmcc

stepbar wrote: »

I wouldn't even think about renting a pub unless you had at least 5 years experience working behind a bar (as a bar man and a bar manager) and were fully au fait with profit margins etc. Madness otherwise. Anyhow, don't expect that the crowds will keep coming. Don't under estimate the effects of the recession.

Agree with above except the last line. If your pub is geared towards alcoholics for want of a better word ie cheap drink and ideally next to a bookies you should do ok even better in a recession but you would need to leave your conscience at the door as your busiest days would be dole and benefit days. Not nice imho and not a business I would do.

Yeah - sort of throws the whole "quality of life" line out the window.

rabbit Stew

Sorry lads I got to this post late.
A number of small points.
As regards 33% GPM thats wrong.
(I think stepbar was thinking of Gross profit)
Most bars run off a margin of between 55%-65% depending on the "mix" of sales i.e Beer, spirits, food etc.
But in the end this is only a figure as you could be making a margin of 65% with a turnover of €100 a week or €100,000 a week.
So basically you need to find out what the turnover is first then the GPM.
From this you can work out Gross profit (sales - cost of sales).
This is what you have left over to pay your overheads.
These can be huge in the pub trade ie.
Wages
Accountant
Electricity
Gas
Insurance
Rates
Phone bill
Sky (which is huge as stepbar said)
etc.
And not to mention all the small ones that you'll forget about like IRMA, TV licence, replacing glasses, cleaning products, bank charges and on and on and on.

In short if you really want to lease a pub and I mean really, really
Look at the books.

The general rule of thumb is find out the turnover and divide it by ten and thats the "value" of the lease.

Good luck.

Dazzler88

rabbit Stew wrote: »

Sorry lads I got to this post late.
A number of small points.
As regards 33% GPM thats wrong.
(I think stepbar was thinking of Gross profit)
Most bars run off a margin of between 55%-65% depending on the "mix" of sales i.e Beer, spirits, food etc.
But in the end this is only a figure as you could be making a margin of 65% with a turnover of €100 a week or €100,000 a week.
So basically you need to find out what the turnover is first then the GPM.
From this you can work out Gross profit (sales - cost of sales).
This is what you have left over to pay your overheads.
These can be huge in the pub trade ie.
Wages
Accountant
Electricity
Gas
Insurance
Rates
Phone bill
Sky (which is huge as stepbar said)
etc.
And not to mention all the small ones that you'll forget about like IRMA, TV licence, replacing glasses, cleaning products, bank charges and on and on and on.

In short if you really want to lease a pub and I mean really, really
Look at the books.

The general rule of thumb is find out the turnover and divide it by ten and thats the "value" of the lease.

Good luck.

thanks for that advice,it a big help compared to previous posts.

Dazzler88

Dazzler88 wrote: »

thanks for taht advice,it a big help compared to previous posts.

The cheek of you. Grow up little boy. You asked "Can a Pub make you money???" - that's the most ridiculous question I've ever seen asked. Where was the thought in a question like that ? People tried helping you, no need to not appreciate the other posts, you're over defensive and you are too flippant as HT pointed out.

Have you done any research into this idea since the other day when you asked it ?

the_syco

Dazzler88 wrote: »

i was recently thinking of leasing a Pub.

What experience in the industry do you have? If must you have at least 5 years experience pulling pints as a barman, to see the yearly ups and downs, and also what drink not to sell. Also, having some managers qualification is essential.

You may think you don't need either, but if you don't have a well thought out plan, the banks won't lend you anything before, and you'll find it harder to get a lend now.

Dazzler88

Deleted User wrote: »

The cheek of you. Grow up little boy. You asked "Can a Pub make you money???" - that's the most ridiculous question I've ever seen asked. Where was the thought in a question like that ? People tried helping you, no need to not appreciate the other posts, you're over defensive and you are too flippant as HT pointed out.

Have you done any research into this idea since the other day when you asked it ?

Sorry if i have insulted you,i was merely Acknowledging the post as i found it most helpful.This thread was set up for advice not your personal opinons.

Oh God, advice is a personal opinion !!!

http://en.wikipedia.org/wiki/Advice_(opinion)

Edit: I'd also pay as much attention as is humanly possible to what HT tells you as he is an expert in that field.

Dazzler88

Deleted User wrote: »

I'd also pay as much attention as is humanly possible to what HT tells you as he is an expert in that field.

i dont think this is sticking to the subject in question.people dont want to hear your personal opinons.

-Chris-

Dazzler88 wrote: »

thanks for that advice,it a big help compared to previous posts.

Dazzler88 wrote: »

i dont think this is sticking to the subject in question.people dont want to hear your personal opinons.

That's a crappy attitude.

You're the same fella who was looking to rent a petrol station last month. You got good advice on that iirc, and odds are Hammertime and others saved you making an expensive mistake.

Now you're here again but this time asking about leasing pubs (seriously, pick an area of expertise) and you're dismissing the advice you're being given because it doesn't match what you wanted to hear.

You're also looking to join the prison services.


You're getting good advice from experienced business people FOR FREE here. Try and be a little grateful for their expertise, and for God's sake, don't waste their time!

Dazzler88

-Chris- wrote: »

That's a crappy attitude.

You're the same fella who was looking to rent a petrol station last month. You got good advice on that iirc, and odds are Hammertime and others saved you making an expensive mistake.

Now you're here again but this time asking about leasing pubs (seriously, pick an area of expertise) and you're dismissing the advice you're being given because it doesn't match what you wanted to hear.

You're also looking to join the prison services.


You're getting good advice from experienced business people FOR FREE here. Try and be a little grateful for their expertise, and for God's sake, don't waste their time!

im taking all the advice ive been give on board and i appreciated all the time Hammertime gave me when i opened that thread a month ago,i found him to be helpful and have no doubt that area is his expertise.You can however close this thread if you wish as i dont feel i can get any futher advice on this subject.Thank you for time.

Dazzler, WAKE UP. My point is "ADVICE" is a personal opinion regardless. That's what "Advice" means.

Definition of advice: Advice (also called exhortation) is a form of relating personal opinions, belief systems, personal values and recommendations about certain situations relayed in some context to another person, group or party often offered as a guide to action and/or conduct.

How are you meant to better yourself if you have such an issue with ADVICE ? Can only imagine how you would deal with constructive criticism i.e. throw a tantrum and bang a door on your way out.

Dazzler88

Deleted User wrote: »

Can only imagine how you would deal with constructive criticism i.e. throw a tantrum and bang a door on your way out.

i thank you for all of your advice and dont need any further advice on this subject.Thank you for your words of wisdom.

GoneShootin

Sometimes, when I read threads like this, a small part of me dies inside.

@Dazzler88 - keep throwing that **** against the wall, eventually some will stick.

@Rest - don't get so offended! Sheesh you'd think in a recession all you business leaders would have toughened

*tip* - These situations is what the IGNORE FEATURE was made for.