Taking on Bar Lease - are we crazy?!

catman77

Just as the title asks - are we crazy? Myself and my wife are close to signing on for a lease of a rural bar - at a rent of €1300 p/month including accommodation. I'm currently looking for work, hate the idea of going back into factory work and have always wanted to work for myself. Myself and my wife have years of bar experience. The bar itself is small and quiet, can be managed by the two of us, she is keeping her job so there will be a steady wage coming in. Have looked at rates, insurance - seems manageable - bar seems quiet but hoping we can turn this around - even a small bit! We are renting accommodation and our rent is €900 which is another reason we are thinking - why not just go for it! But the fear is stating to sink in - just looking for any advise? thanks

RedXIV

How rural are we talking? Is there much footfall outside the bar that could lead to a potential increase in business? Have you a target demographic in mind?

You have some positives there too, the bar experience, another source of income, savings on rent etc but try to come up with some details on the plans to up the business rather than "we plan to make it more popular"

Thargor

How rural is rural?

Stheno

Mod

Moved from work and jobs, new charter applies

catman77

-its not in a town or village, in the middle of farm land, so customers would be mainly farmers, locals

Jack the Stripper

Husband and wife working together is not a good idea. Best of luck with it. Getting good rate.

RedXIV

catman77 wrote: »

-its not in a town or village, (about half hour from limerick city) its at a crossroads in the middle of farm land, so customers would be mainly farmers, locals

To be honest, I think you're going to have your work cut out for you there. If it was a bar with low numbers even in a village, you could put some things in place to up the numbers with themed nights (kids night, quiz night, etc) but I'd be surprised if you haven't already maxed out the potential of the area already.

Only thing I can think of that might change is if previous management was on bad terms with the locals and the change of management (if obvious) may draw some people back?

helimachoptor

Can you do food and attempt people even for Sunday or Saturday dinner?

Bigsliothar

Did you factor in extra costs such as transport to ferry customers home which is essential in rural settings now??
Entertainment to add to your customer base cards/dancing/sports on TV etc all will certainly require extra funding
Good luck with it anyway

clintondaly

Have you seen the Books ?

catman77

Thanks for the reply's - the bar is not set up for food but hoping to do sandwiches / platters for the customers when games are on - maybe get some good coffee and do scones / cakes to temp some people in
Plan to do quiz / darts / pool / cards nights - I've played music in pubs before so I can hop outside the bar sometimes
the bar is only open a few hours a week at the moment, but have see the sales for 2015 - no proper accounts from the past few years
Have been hoping to do this for years and this place ticks many boxes for us - but scary being so close to taking the leap!

Water John

I think there should be lee way on the first few months rent. You are picking up the business, basically from scratch. The owner has to accept some lifting since he has nothing otherwise.

Wheety

Go for it. What's the worst that could happen?

pilly

Break it down to the basics. How much on average are the weekly sales? Because back of the envelope calculation would suggest that it needs to be €3k to even make it worth thinking about. If it's only open a few hours a week at the moment I'd imagine it's not taking that in is it?

Stheno

catman77 wrote: »

Thanks for the reply's - the bar is not set up for food but hoping to do sandwiches / platters for the customers when games are on - maybe get some good coffee and do scones / cakes to temp some people in

If you are going to be making the food yourselves then I think there are some quite strict criteria you may have to meet, so you would want to check into that.

You'll also need to check the cost of commercial licencing for the likes of sky etc as that can be expensive.

pilly

Is it on the main road to Limerick? That could get you passing trade.

Water John

Passing trade for alcohol is long gone.

pilly

Water John wrote: »

Passing trade for alcohol is long gone.

Fair point but people do stop for coffee etc. All you need is a good coffee machine for that. I drive the old road from Cork to Limerick and find it very lacking for somewhere to stop.

Gaillimh1976

catman77 wrote: »

no proper accounts from the past few years

This bit would worry me a lot.

Not sure how they still have a bar licence if they have not been tax compliant for the past 'few years'

Can't renew a bar licence unless your taxes are up to date

Water John

Good idea. Pilly, great margin on tea/coffee. If it can be developed as a daytime meeting place. Friends catching up, some business. You'd be surprised how many local farmers would use a venue fairly regularly for lunch.

fineso.mom

There's a pub at a crossroads near me that used to be packed every weekend , hugely popular with the locals until a new owner took it over. Lovely person but just not cut out for the business. He never had music at the weekend or any other events. Very obliging to a local club and would let them book music for a fundraiser or have a pub quiz but never did anything off his own back. Over time business got quieter and quieter and the pub is only busy now at Christmas. My point is, a lot depends on the personality of the publican. Even though its a rural pub there were plenty of customers within a 5 mile radius but people dont go now because there's just no crack to be had there.

clintondaly

Encourage any local groups or clubs to use it too,get involved in the community if not already.
If they see you making an effort with regards some support for the community people tend to return the favor

Sam Kade

Since when did pubs in Ireland become bars?

catman77

hoping the area will be open to blow ins - we are both from rural ares and know that the local pub can still offer something. Confident that we can have a proper go at this but its the unknown that's scary! was thinking 1k a week would be enough to break even?

pilly

catman77 wrote: »

hoping the area will be open to blow ins - we are both from rural ares and know that the local pub can still offer something. Confident that we can have a proper go at this but its the unknown that's scary! was thinking 1k a week would be enough to break even?

Sorry OP but if you mean 1k a week in sales you're on a hiding to nothing. Have you calculated what the profit on that is? It's a long time now since I was in the restaurant bar trade but the average margin on drink I remember would have been 20%. That gives you €200 a week?

pconn062

Couple of big red flags for me here:

1. No books for the last few years, this alone would be enough to put me off. If you can't see how well or bad the place has been doing for the last few years it's hard to make a rational, financial decision.

2. You're asking if 1k a week is enough to break even. Without meaning to sound harsh, surely the extensive market research you did should tell you whether that figure is enough? If you haven't done extensive research then why not? How many people in the local area/overheads/cost of the product/staff bills/footfall/any other hidden costs such as repairs and maintainence/insurance/SWOT analysis.

I think you are a little caught up in the romantic notion of you and our wife running the local pub together and that's fair enough, but you need to really consider the financial realities of this.

Good luck.

Stheno

catman77 wrote: »

hoping the area will be open to blow ins - we are both from rural ares and know that the local pub can still offer something. Confident that we can have a proper go at this but its the unknown that's scary! was thinking 1k a week would be enough to break even?

Have you sat down and worked out all your costs?
Rent/rates/insurance/heat/light/equipment (tvs)/furniture/licencing for sports/a float to pay for initial drinks orders to get you up and running/any regulatory requirements you will have to meet such as sign off from fire officers if needed?

Then once you've worked out all of those, you know the basic you need to break even before you pay yourself anything and can factor in what level of pay/profit you would like to get from the bar.

You should contact your local entreprise board, they will be able to help you do the costings.

From the post above, you come across a little as if you are doing the figures on the back of a packet of fags tbh.

You need to do a lot more analysis rather than "1k a week should be enough to break even"

nosilver

Rural Pubs are not the easiest to make a living from, but saying that, many do. Make sure you set up a limited company and if you have to sign guarantees, have limits on those guarantees.

Unless you have a passing trade, forget the coffee market, people think there's a great profit, but unless you can sell 100 cups a day, there's none. A decent Nespresso machine will suffice for those who want decent coffee when you are open.

Again, unless there's a specific event, no need to open before 5pm during the week. On TV, Eir TV will give best option due to the "free" sports. Cost of SKY is not warranted for a small rural pub.

One good market for rural pubs is the funeral market and the milestone birthdays such as 21st, 60th 70th etc. Simply tie-in with a local centra or other deli for the supply of food for such events.

Visit pubs in similar locations and join the vintners association and possibly other smaller local business groups

Carlos Orange

Is the accommodation sufficient to rent out a room?

enricoh

No yer not crazy, fair play for giving it a go. The locals will give you a fair crack of the whip I'd imagine.
100 extra in rent p/w is easily doable. What are the rates like? Once you start taxiing, you can never stop so think about it before driving a lad 10 miles away

catman77

thanks again for all the feedback - much appreciated

Bandara

You need to stand back and take the emotion and excitement and fear out of his.

You don't know what your doing. Thats fine, once you realise that you can move to rectify it.

Your being offered this bar because the previous experienced bar operator couldn't make money in it. And its now on your lap as everyone else has refused it and t it's rolling downhill looking for someone to take a punt on it.

Your lack of a grasp of the business side of it is coming across very strong here. You say you know the bar business ? It really doesn't come across like this.

The people trying to let this place are desperate to get rid, they are lying that there is no accounts done as if they showed you the actual accounts you would run a mile. To get an increase of 15% on a business is incredibly hard to do.

You need to stop, think of the overall picture.

Take it by all means, but take it on your terms. Insist on a lease with a one year no penalty break clause, insist on three months rent free, front loaded.

Insist on the fire certs, all applicable licenses, etc etc being in place and up to date.

If they waver on anything just walk away. It doesn't sound like a business you should be going into to be brutally honest. You can't give one single positive about the place so far. Imho your trying to fit a square peg into a round hole, but give it a go if you want, but have your exit plan firmly in place.

Good luck either way. It takes balls to make the leap, well done

beertons

I wouldn't take on a bar doing 1k a week. You'll be working for free, then will have to dig into savings for the shortfall. That's €142 a day. Find a bar doing 5k minimum. You'll pay more rent, but be a lot busier.

EndaHonesty

catman77 wrote: »

thanks again for all the feedback - much appreciated

Is the pub the Hamlet in Grange?

http://www.daft.ie/limerick/commercial-property-for-rent/restaurant-hotel-bar-for-rent/the-hamlet-grange-kilmallock-limerick-346037/

A good rule of thumb would be paying a rent of approx. 10% of net turnover.

So to pay €1,200 per month you'd have to be taking in €12,000 + VAT per month.

€3,400 per week gross.

The proposed new laws about drink driving are going to hit rural pubs hard.

catman77

No but will have a look, thanks for info

jennyhayes123

I live rural, the local do lifts home at end of night, if possible do this, makes us go and no arguing over who has to drive. Means both of us get to have a drink

jennyhayes123

P.s good luck. Hope it works out

Jodotman

Sky Sports/BT etc would be around 10K a year for a rural pub.

If you didn't mind running people home if witnghin a few miles at closing would be a big help.

jimd2

Sorry OP but I think that you are letting your heart rule your head with this one. As others have said the lack of accounts is a big red flag.

All i could suggest is to e facilitated with rent free for the first 3 months to allow you to get on your feet and invest in building up the trade.

Miaireland

catman77 wrote:

Thanks for the reply's - the bar is not set up for food but hoping to do sandwiches / platters for the customers when games are on - maybe get some good coffee and do scones / cakes to temp some people in Plan to do quiz / darts / pool / cards nights - I've played music in pubs before so I can hop outside the bar sometimes the bar is only open a few hours a week at the moment, but have see the sales for 2015 - no proper accounts from the past few years Have been hoping to do this for years and this place ticks many boxes for us - but scary being so close to taking the leap!

I am not trying to be negative but the first thing I would do is research how much it would cost to bring the kitchen up to a standard that it complies with regulation to serve food to customers. Also investigate how much Sky Sports (as a business package) will cost.Add on light, heat, insurance, tax, stock etc And remember this is before you take a wage for either of you.

commonsense.

Apart from the economics of the situation, this will likely involve a lifestyle shift for both of ye. So there will be major quality of life issues to be considered.
You both will be working evenings and weekends. Every evening and every weekend.
FInancials aside this needs careful consideration.

54and56

clintondaly wrote: »

Encourage any local groups or clubs to use it too,get involved in the community if not already.
If they see you making an effort with regards some support for the community people tend to return the favor

Build a genuine relationship with the local community. Build a Facebook page and offer a free coffee/tea to people who "like" the page. That will quickly build a very useful database of customers you can market directly to e.g. special offers for rugby/GAA matches etc.

Also, you'll be able to see when "friends" of the page have birthdays etc coming up so you can treat them to a drink or reach out and offer them a free platter of sandwiches if they want to host a party with friends for their birthday.

Find out what local groups and charities are active and reach out to them. Offer to host their coffee mornings. Frozen par bake muffins and croissants etc can be very good. They are easy to make (whack them in the oven for X minutes) and are very profitable.

Put on interesting talks/presentations by local historical society on quiet weekday nights, have an open music session the first Thursday of every month where all musicians are welcome.

Put signs up on busy nearby roads (legally, ask farmers for permission) highlighting that there is excellent coffee, pastries and sandwiches just X hundred metres that way ->

Make sure your toilets are genuinely clean and comfortable to use. I'll frequently use a bar for coffee on my travels but if the toilets are smelly and dirty I won't be back, no matter how good the coffee/food is.

ironclaw

The family has been in the pub trade for many years and we have one location on a main road via the midlands. Before you consider signing a lease, go work in a pub for at least a year. Do you know how to clean beer lines? Can you make drinks? Can you negotiate with drink company reps? Can you keep conversation with a local farmer who's only interest is hay bales? Can you deal with someone who is drunk and disorderly? Have you a good raport with the local Gardai? Whats the security of the location like? How will you deal with cash if you have a busy night? Are you ready to go to bed at 3am, nigh every night, and get up at 8am to clean the place and be ready to open for the passing trade you want to capture with coffee etc? Can you afford the food safety standard requirements? Have you ever lived over a noisy pub and tried to get some sleep?

Can't stress enough not to work with your wife or any family member for that matter. Especially in a pub. Its a really bad idea. Business is between partners. You might be friends but you want the ability to have a strong disagreement and shake hands the next day, you can't do this with family, wives or siblings.

I could go on but those are what come to mind straight off the bat and there are a million more questions. The only rural pubs doing well are those offering entertainment and good, proper food. You could do a decent trade in the summer if you had a large car park (Another requirement) and perhaps a place for kids to play while the parents had lunch. But do you see the common theme? Food. Thats all well and good in the summer, but what about a cold, dark January afternoon? You'll be empty unless you build a rep as somewhere that is worthwhile to go to for lunch. People will travel for good food, I can name at least 4 multimillionaire turn over locations in our direct locality, but you won't survive just opening your doors to offer a pint, sandwich and tea. Sorry, you just won't.

irishgeo

Does the local A have a gaa or soccer club. Maybe try and get in touch and offer some sponsorship. The clubs players might stop on the way back from a match etc. Don't forget to setup free WiFi.

BLACKEN

ironclaw wrote: »

The family has been in the pub trade for many years and we have one location on a main road via the midlands. Before you consider signing a lease, go work in a pub for at least a year. Do you know how to clean beer lines? Can you make drinks? Can you negotiate with drink company reps? Can you keep conversation with a local farmer who's only interest is hay bales? Can you deal with someone who is drunk and disorderly? Have you a good raport with the local Gardai? Whats the security of the location like? How will you deal with cash if you have a busy night? Are you ready to go to bed at 3am, nigh every night, and get up at 8am to clean the place and be ready to open for the passing trade you want to capture with coffee etc? Can you afford the food safety standard requirements? Have you ever lived over a noisy pub and tried to get some sleep?

Can't stress enough not to work with your wife or any family member for that matter. Especially in a pub. Its a really bad idea. Business is between partners. You might be friends but you want the ability to have a strong disagreement and shake hands the next day, you can't do this with family, wives or siblings.

I could go on but those are what come to mind straight off the bat and there are a million more questions. The only rural pubs doing well are those offering entertainment and good, proper food. You could do a decent trade in the summer if you had a large car park (Another requirement) and perhaps a place for kids to play while the parents had lunch. But do you see the common theme? Food. Thats all well and good in the summer, but what about a cold, dark January afternoon? You'll be empty unless you build a rep as somewhere that is worthwhile to go to for lunch. People will travel for good food, I can name at least 4 multimillionaire turn over locations in our direct locality, but you won't survive just opening your doors to offer a pint, sandwich and tea. Sorry, you just won't.

You come across as someone who knows their ****. If i knew who you were i'd buy you a pint. :-)

Pivot Eoin

Considering your Rural setting, to be a financial success, you're going to have to think outside the box.

In the short term I would make your goals:

- Knock on door of every house within a few KM and personally invite them to the opening.
- Undercut any competitors price on the Pint of Guinness at least for a while, and make this known!
- As someone suggested earlier, align yourself with a transport company to ferry people home.

Medium term:

- Not sure how savvy the area is but Push for Google Reviews so your Bar looks like the best one with most reviews when people look for a bar in the area

- Develop your own USP - What will your bar offer that no other bar's close by will offer?

- Make it gimmicky, and slowly build it into somewhat of a tourist attraction, build on it's strengths (It's a farm Pub basically, maybe Farm animal Museum kinda thing?) make it visible on places like Trip Advisor and Irish tourist info websites, dont make it a Place for people to come to in the area, Make it THE REASON people come to the area.

Best of Luck - please keep us all up to speed on progress.

Bandana boy

If your not working now then it might be worth taking on to get yourself back to work but you would need to do a business plan of what activities you are planning to do , the cost of each and what volume of business you hope each will bring in.

It is 100 Euro profit per week needed to pay the rent.
What wage are you willing to work full time for per week ?
What wage will your partner need to justify working part time in the pub on top of her current job?
Are you planning on working 7 days a week 52 weeks a year ?
If not then you need to factor in wages for staff.
What cost will it take to get the Pub kitchen compliant for serving food ?

All of this can seem daunting but a good robust business plan will guide you in your decision.

sword1

Op has not posted in nearly two months, so I guess they are either leasing a bar now or not.