opening a pub

newpubowner

Hi everyone
I have noticed pub rental prices have dropped in recent times. I know this is due to the economy etc etc ... I am looking into a pub in the midlands. I am a qualified chef and I will be serving a comfort food menu in the pub. I have countless experience in restaurants with costing etc. However i have little or no experience in the alcohol side of pub. I am looking for costs/markups on kegs bottle cocktails etc. If anyone has experience with insurance that would be great. If there is anything major i should be aware of please let me know. I am working with an very respected barman however he does not have costing experience.

Thanks

Mr Simpson

newpubowner wrote: »

Hi everyone
I have noticed pub rental prices have dropped in recent times. I know this is due to the economy etc etc ... I am looking into a pub in the midlands. I am a qualified chef and I will be serving a comfort food menu in the pub. I have countless experience in restaurants with costing etc. However i have little or no experience in the alcohol side of pub. I am looking for costs/markups on kegs bottle cocktails etc. If anyone has experience with insurance that would be great. If there is anything major i should be aware of please let me know. I am working with an very respected barman however he does not have costing experience.

Thanks

The main thing to look at imho is your local competitors, look at their prices. Also, I'd assume you'd be looking at buying an operating or recently closed business, you don't want to lose the existing customers by putting up prices. Just my two cents.

Chucken

newpubowner wrote: »

Hi everyone
I have noticed pub rental prices have dropped in recent times. I know this is due to the economy etc etc ... I am looking into a pub in the midlands. I am a qualified chef and I will be serving a comfort food menu in the pub. I have countless experience in restaurants with costing etc. However i have little or no experience in the alcohol side of pub. I am looking for costs/markups on kegs bottle cocktails etc. If anyone has experience with insurance that would be great. If there is anything major i should be aware of please let me know. I am working with an very respected barman however he does not have costing experience.

Thanks

So,you want to cook in a pub?

You know what the mark up on food is? I'd hope you do at this stage?

If your "respected barman" doesnt have costing experience.....I'd be thinking again

Mr Simpson

Chucken wrote: »

So,you want to cook in a pub?

You know what the mark up on food is? I'd hope you do at this stage?

If your "respected barman" doesnt have costing experience.....I'd be thinking again

I'd completely agree, If he's a good barman, leave him at that, a barman. Get someone who has experience in managing a bar, theres a lot more to it than costing. ie Stock Control, Rostering, Wages and many more.

newpubowner

Hi
Thanks for your comments. I have no problem with the food costing aspect of the pub. My menu is completed in full with all costing aspects covered. My "respected barman" is a well know, well liked barman from the locality. He will not be involved in the back office of the business, due to his lack of managerial experience. Therefore I came here for advice. I am looking for the mark up on pints, bottles, shots, etc. I am NOT interested in staffing, electric costs etc. Really just cost associated specifically with a pub.

Thanks again.

PCPhoto

but are staffing and electricity etc associated with the costs of running the business too ??

yoppo

I've worked in a bar for years and the mark up on drink is amazing. I'll give you a couple of examples. I don't know the cost price as that is someone else's job.

Vodka - 1L (1000ml) - Pub Measure (35.5ml) = 28 shots @ €4.20 = €117.60
Mickey Finns (500ml) = 14 shots @ €5 = €70

For Mickey Finns what a lot of pubs do, us included is (which I don't like) use shot glasses that are about 28ml, IIRC. That gives you an extra €20!

In a keg, I think there should be 90 pints.

Guinness at €3.80 = €342
Beers and Lagers etc at €4.50 = €405

Just a little info for you. If you need anything else I'll try help.

Mr Simpson

A keg has about 88 pints or 80 pints on average with standard wastage.

zenno

yoppo wrote: »

Vodka - 1L (1000ml) - Pub Measure (35.5ml) = 28 shots @ €4.20 = €117.60
Mickey Finns (500ml) = 14 shots @ €5 = €70

My god no wonder bars are shutting down left and right. A €16 bottle of vodka turned into €117.60, astonishing.

caff

zenno wrote: »

My god no wonder bars are shutting down left and right. A €16 bottle of vodka turned into €117.60, astonishing.

Eh you still have to deduct tax from that, still a markup but not as extreme as it looks.

Frynge

yoppo wrote: »

Vodka - 1L (1000ml) - Pub Measure (35.5ml) = 28 shots @ €4.20 = €117.60
Mickey Finns (500ml) = 14 shots @ €5 = €70

How I work things is Keg of Guinness €131.34 that should equate to min 87 pints,

€3.9
- €1.51 (Cost Price)
- €0.73 (VAT)
= €1.66 (profit margin about 60%)

Smirnoff Vodka ~€15.25 for 1L bottle
€3.7
-€0.55 (Cost)
-€0.70 (VAT)
=€2.45 (Profit margin about 80%)

Long Neck Miller ~€10 for 24
€4.4
-€0.42 (Cost)
-€0.84 (VAT)
=€3.14 (Profit margin about %89)

They would be about the best margins on Pints/Spirits/Bottles respectively.

yoppo wrote: »

For Mickey Finns what a lot of pubs do, us included is (which I don't like) use shot glasses that are about 28ml, IIRC. That gives you an extra €20!

For Liqueurs that is fine as they do not have standard measures but with any Spirit make sure it is measured with either a stamped measure or a sealed optic. some places use a shot glass as a measure, this can get you into serious trouble with weights and measures if they do an inspection
Also branded pint glasses will be CE Stamped which is required but very few places used CE stamped half pint glass, this can also get you into trouble.

yoppo wrote: »

In a keg, I think there should be 90 pints.

The revenue will allow 88 pints in a keg, and as the saying goes a barman will get you 86 pints from a keg, a good barman will get you 88 pints, but a great barman will get you 90 pints

mmcn90 wrote: »

A keg has about 88 pints or 80 pints on average with standard wastage.

That is not Standard wastage that is standard theft (probably staff drinks at the end of the night)

Staff drinks are fine in some places and are a great way to thank the staff but staff drinks should NEVER exceed 1% of total sales i.e. 4 staff working and 4K in sales, 2 drinks a piece

zenno wrote: »

My god no wonder bars are shutting down left and right. A €16 bottle of vodka turned into €117.60, astonishing.

i've been suckered into this one again (Assuming Sarcasm)
from that €117.6 you lose €16 and then €22 leaving €79.6 as profit.

With probably half the pubs in the country not even having €120 in sales on a Monday or Tuesday it makes perfect sense that pubs are closing down

Even if you sold just four bottles of vodka in a day it still wouldn't be enough to cover the things that people never consider such as light bulbs, cloth, varnish, paint, till rolls.

OP you will probably come across people telling you your pub should be this that and other, they may be right or not but what most people want from a pub is an enjoyable drink or meal. this is not the easiest service to provide it is a very hard job that at times won't seem worth it

hope that helps.

RATM

OP its about 6 years since I managed and worked in pubs but back then the ball park for draught beer was around 55% and spirits 70-75%. Baby Mixers like tonics can be unbelievable- I remember we were buying them for about 35c and selling for about 1.70. Of course VAT is included but you get what I mean, the mark up was eye-watering.

Bear that in mind when setting your prices - the publicans of Ireland complain that their trade is dying because of the smoking ban, drink driving, etc. The reason the trade is dying is because of price and a poor quality product (women hate dirty toilets yet a majority of pubs still have manky toilets thus alienating 50% of their potential clientele).

Many publicans are locked into huge mortgages and can't afford to drop their prices but you as a new entrant to the market can do as you choose. When the VHI bullies come around to your premises telling you to raise your prices my advice is to tell them to take a hike- the drinking public will repay your profits handsomely for doing so.

Frynge

RATM makes a very valid point about going in with relatively low overheads and not requiring such high margins

Gone are the days of people getting rich from pubs but if the business is properly run a nice living can be made.

If taking out a lease make sure to have a solicitor look it over, i've heard stories of people thinking they can understand everything themselves, they can't.

also make sure to ask your customers what exactly they want

newpubowner

Hi

Thanks for all your advice. Some great detail much appreciated !! Any more info or advise is always welcome !!

Cheers

markymark21

"You don't put percentages in the bank, only dollars".

I think this is a good saying, and is particularly relevant to the hospitality industry in Ireland these days. The general public are far more price sensitive then a few years ago - you only have to look at the popularity of Groupon and Living Social or even the prices even the top restaurants are charging for set meals and early birds.

With that in mind, I'd aim on volume rather then percentages. Set your prices low enough I reckon - not too low that it completely shags your bottom line - but low enough that it will have punters really taking notice of your place. For example Its far better to sell 100 burgers with 5 Euro profit than 50 burgers with 8 euro profit right?