Advice for opening a Bar

[JackDaniels88]

Me and two close friends have around £25,000 saved between us and we are looking into the possibility of opening a bar in the future (2 years time). We look to start very small by having a lease on a retail property with rent around £20,000-£25,000 per annum. We have a concept and theme for the bar that we all share a passion for however we do not fully understand the costs of operating and running a bar.

We also hope to live above the bar and have this as part of the commercial property fee.

Will we be able to get a business loan being only University Graduates? Do banks see bars and business ideas such as this high risk? We would probably need a loan for the initial stock.

Is £25,000 enough for the initial costs on Deposits, Decorating, Equipment, licenses and permits etc.

What are the costs and profit of alcohol? Could anyone offer a rough figure and the wholesale figure of barrels and spirits and the profit made?

I would really appreciate any advice and info especially from people with experience in the bar business to try and find out if this business idea is plausible. There is a hell of a lot I need to learn but am wanting to research over the next 2 years.

 

[elite123]

I dont think its a good idea or enough money. That amount will not last you very long at all !!
It sounds as if you are trying to do something that is more of a lifestyle thing than a business concept, but in saying that it depends on what you want.

Take the hint of why so many pubs going out of business and put your money into something that the market needs right now in a recession.

 

[qwerty123]

If you could find more money through a loan or something then I do not see why not! If you have a new idea for a bar or a new way of doing things and it was marketed correctly to the right people then why not. I would imagine profit on drinks is massive especially shots etc..

 

[Iwillmakeit]

Think outside the box. Open a bar up with a difference and something Unique about it. Don't be like the rest; am sure you will do well.

Don't forget personal licence, health and safety etc...

Good Luck.

 

[Alan @ Clyde Resources]

Hi, If you want any advice give me a pm.

I am the Operations Director of a pub company that I have been running for almost 3 years.

Its TOUGH, I have been in the trade for 10 years and it doesn't look like its getting any easier, but happy to help if I can.

 

[psanghani]

first of all you need to create a detailed business plan that will include costs including inventory, stock, license fees, annual rent, renovation,staff, marketing etc. a business plan will help you keep track of your costs and will convince your bank that you know what you are doing and likely to be successful. Business may also include how you will market your new bar e.g. local newspapers e.t.c.

you would also require to contact your local council for application for alcohol licences on the premises ( there maybe oppositon from local residents)

Location is also very important you need to locate in a densely populated area or a town centre maybe not an option in your case as town centre properties are expensive to lease. wherever you want to locate the area should be well researched e.g. average age of people e.t.c. this can be done using government statistics on a particular area.

the fact that you have a concept and theme for the bar is a good start make the concept and theme unique creating a USP in the particular area (different from other bars around the area) but creating a USP alone is not enough you need to think about pricing e.g. cheaper prices at first to attract customers although this might give you a lower profit margin at start it will help establish a loyal customer base.

and make sure you market your USPs effeciently this will give you an advantage over competion e.g. point out how cheap you are and what you offer that other dont

i think this idea can be turned into a successful business if everthing is done correctly and enough market research is conducted

good luck

 

[Alan @ Clyde Resources]

you would also require to contact your local council for application for alcohol licences on the premises ( there maybe oppositon from local residents)

good luck

Only if there isn't a current license in place. I would recommend going for an already licensed premise. This will reduce the red tape for the license, it would simply be a transfer, still involve usual police checks, but simpler.

By going for an exisiting pub/bar it will already be kitted out, it may be a cheaper alternative, and use what you have at your disposal rather than buying everything new.

 

[Valerio]

Hi Everyone, I would like to open a business (Bar,Cocktail bar) here in London but I dont know where to start from (absolutely no idea).

I have been working in the Bar Industry for nearly 7 years, I would like start with a small place.

Is there anyone who can help me with this?

Thanks in advance...

Valerio

 

[Call Assistant UK]

Hi Valerio, if you have worked in the industry for 7 years, you know its not an easy job, depending on the level you have been working at.

I could give you a big speel about where to begin, but to know your starting point really depends on your knowledge.

Firstly, you need premises. Then you need the license for the premise if not already licensed. You need to decide if you want freehold or leasehold.

Once you sort the above, then the hard work really begins.

I worked in bars for 10 years, became area manager, owned two and just recently sold them on.

If you want any advice or if i can be any help, drop me a pm. It may be worth noting that I am fully conversant on the Scottish License Act 1976, not interested in the new act but have the basics, and English law, I only know a few things.

 

[no118.co.uk]

Hi JackDaniels88

To be honest, the licensed trade is dying. If you visit the BII website, you will see how the licensed trade is being knocked around from the smoking ban, supermakets under cutting pub and peolpe not spending money on going out.

If I had £25k, I would have a rethink.

Good luck

 

There are still bars that make money; but there are many more that don't!

From a funding point of view, I'm afraid there is virtually no hope of getting any type of conventional finance without personal security.

The big mistakes we often see are:

- Gross underestimation of the time it takes to put everythin in place (particularly licences & red-tape items) leading to delayed opening and poor day-one cashflow.

- Overspending on fit-out costs.

- Staff problems, particularly with chefs.

- fall-outs between partners.

Sorry its negative, but my gut feeling is that you would be best to invest your enthusiasm and capital elsewhere.

 

[Noah]

To be honest, the licensed trade is dying. If you visit the BII website, you will see how the licensed trade is being knocked around from the smoking ban, supermakets under cutting pub and peolpe not spending money on going out.

I think that is too gloomy a picture, more pessimistic than realistic. In particular, all the doom-and-gloom from the BBPA/BII is questionable; for instance, their oft-quoted statistics do not reflect pub openings and re-openings, and I suspect are misleading in other ways - they are statistics, after all. My personal opinion is that the BBPA paint as black a picture as possible so they can go cap-in-hand to the government for relief from their self-defined hardship.

Again in my humble opinion, the huge majority of the damage to the pub trade is inflicted by rapacious and unprincipled pub companies; many free trade, loosely-tied and small-pubco. pubs actually do quite well.

 

[no118.co.uk]

Reply to Noah Comment

I have had over 20 years in the licensed trade. I made my comments from what I have seen. If you have a good locaion then yes, it may work. It is hard work. Over the last 12 months, my local bbc news station and local papers have shown how many pub have closed.

One advantage of so many pub closing is that it makes it eaier for other pubs in the area. The secret to having a good pub is to diversify. You need to have a good food, good quality real ales and provide good atmosphere. It's the landlord/landlady that makes a good pub.

If you do go down the route to open a pub, forge links with other landlords/ladys. If there is a lva, def join it. If you need additional funding, speak to breweries about loans based on the sale of thier products.

I wish you all the best if you go down this route.

The Dragons

 

[JackDaniels88]

Thanks for all the replies. Sorry i have been inactive on this thread for a while but I've been speaking to some people in private messages.

So far I have not been put off the idea and believe my funds are capable of opening a bar. I just want to reiterate that the plan to open the bar is in 2 years time so I will have to review the economic climate at that time.

The bar will have a strong theme and the draw will not simply be alcohol so hopefully I can grab a potential market. This will start initially as a small lifestyle business and I will have to see how it goes.

Currently I have a notebook of creative ideas for the bar and will keep building and researching this while i continue my degree.

 

[DiscoFudge]

I realise this is a very old thread. But am looking at opening a place myself. Was wondering how things went for you?

 

[paulears]

They only posted twice, and have not been back since 2009! The thing that seems to trip people up is the licensing - nobody who lives locally will be in favour. Indeed local to me one quite big bar/nightspot closed down. When the new owner tried to get a new license, the neighbours, having documented the blight on their lives to the up and running premises hoping to get their license overturned went in heavily on the council. I very short temporary license was granted, and four weeks later, refused a permanent one - the bad behaviour and the Police workload scuppering it.

Finding the right place seems vital.

 

[Opinion87]

@DiscoFudge I own a bar/club/music venue, give me a shout if you have any questions.

 

[RambleRuth]

I decided to check this post out because I have worked in hospitality a lot so find it an interesting area of discussion! I always think there is potential in this industry but with the objective of creating something unique in the location you choose and doing whatever that USP is extremely well!

So I wonder if they ever got off the ground?? I guess we will never know....

 

[Deleted member 265392]

I wonder too if they ever got off the ground. I am also looking to open my own bar. I have passed my personal licence course and just need to apply for the licence itself.I have a unique idea too (at least I think it is unique).

The issue I am having at the moment is money, but I am possibly looking for an investor to cover this side of things. The areas that I know I need help on at the moment is the business plan and the financials. I do have these but don't know if they are any good. But there is a possibility that I may have some one to look at that also (not guaranteed but maybe).

I think what ultimately I need is a mentor, but I have my dream and even though it feels like a long way off I will pursue it and it is on my mind all day every day.