Posts: 3,153
Threads: 0
Joined: Mar 2012
Reputation:
85
Purchasing a Bar
09-12-2012, 11:52 AM
Starting to do my due diligence on this. Seems like a lucrative opportunity. Wanted to see if anyone has done this before? If so and are willing to share thoughts please post/shoot me a PM.
This would be in a large metro city. Looks cash rich if done with the right clientele/bartenders/vibe.
Posts: 1,096
Threads: 0
Joined: Apr 2012
Purchasing a Bar
09-12-2012, 12:04 PM
2 out of 3 bars/nightclubs fail within 3 years.
Your best chance for being successful as a bar owner is to purchase a bar that has already been consistently popular and successful for the last 3 years. But then, a) you probably don't have the capital, and b) the likelihood of an owner of a successful bar owner selling is slim to none.
I've seen a number of successful bar owners open up 2nd and 3rd bars in the same town thinking that because their first bar was a success, the 2nd and 3rd ones will be too. Guess what? Their 2nd and 3rd ones failed.
Once you realize that you've got to make nearly ALL your money in only 2 nights (figure 8 hours total over Friday and Saturday) to finance the rest of your operations the other 5 nights, pay your employees, pay your vendors and creditors...you start to see its really not that lucrative.
Posts: 2,025
Threads: 0
Joined: Sep 2012
Reputation:
63
Purchasing a Bar
09-12-2012, 12:38 PM
yea in the us you have to get good insurance possible fights but more damaging is patrons who get too drunk and drive home. if they get into an accident they can and do sue the bar for over serving them.
Game/red pill article links
"Chicks dig power, men dig beauty, eggs are expensive, sperm is cheap, men are expendable, women are perishable." - Heartiste
Posts: 11,055
Threads: 0
Joined: Mar 2011
Reputation:
152
Purchasing a Bar
09-12-2012, 01:27 PM
Stop being buzz-kills guys. Just get insurance and shadow corps for liability.
Posts: 840
Threads: 0
Joined: Sep 2012
Reputation:
15
Purchasing a Bar
09-12-2012, 05:20 PM
Bars can make alot of money. Usually you can make your original cash investment back in 3 to 6 months.
As finance guy though it is near impossible to get a loan to buy or start a bar. You have to use seed money from your savings and from family and friends. Once you get going and it is successful be sure to get an operating line of credit and things like that. Do not ever put your savings, house, other assests as collateral. Use the future earnings and equipment if you have to. Do this during the good times and not wait for bad times to have back up credit. Way harder to get approved if the bar is already failing.
Also keep a double set of books from the start. One for you and for the bank.
El mechanico has got it right, shadow corps will save your ass
" I'M NOT A CHRONIC CUNT LICKER "
Canada, where the women wear pants and the men wear skinny jeans
Posts: 1,832
Threads: 0
Joined: Sep 2013
Reputation:
35
Purchasing a Bar
09-12-2012, 05:30 PM
I knew some guys that started one at the college I went to. I believe they raised $250k between the 3 of them (along with their parents help) and got the bank to match it, so $500k. They took an old closed down bar and overhauled it.
Place is packed every weekend. I'm sure they are cleaning up, last I heard they were playing golf about 4 days a week. I always said the town could use another bar or two downtown that offered decent prices, big screens, pool table, and outside deck/smoking area. Sure enough it worked.
Edit: their location is prime.
"...it's the quiet cool...it's for someone who's been through the struggle and come out on the other side smelling like money and pussy."
"put her in the taxi, put her number in the trash can"
Posts: 840
Threads: 0
Joined: Sep 2012
Reputation:
15
Purchasing a Bar
09-12-2012, 09:34 PM
Quote: (09-12-2012 05:24 PM)WestCoast Wrote:
You mind elaborating o shadow corps? Your description below is the numbers I was running. Not trying to buy a small thing this is a larger move, all cash, no bank loans, established track.
Quote: (09-12-2012 05:20 PM)BIGINJAPAN Wrote:
Bars can make alot of money. Usually you can make your original cash investment back in 3 to 6 months.
As finance guy though it is near impossible to get a loan to buy or start a bar. You have to use seed money from your savings and from family and friends. Once you get going and it is successful be sure to get an operating line of credit and things like that. Do not ever put your savings, house, other assests as collateral. Use the future earnings and equipment if you have to. Do this during the good times and not wait for bad times to have back up credit. Way harder to get approved if the bar is already failing.
Also keep a double set of books from the start. One for you and for the bank.
El mechanico has got it right, shadow corps will save your ass
Well I can only talk about what works in Canada. The laws are fairly similar but they aren't all the same. There are various structures to use, it all depends on if you have partners or going about it on your own.
Sounds like you are going it alone so what I would do is start a holding company that you own outright. Meaning you are 100 percent shareholder. Then start a second company in which the holding company owns all shares. This accomplishes 2 things, it keeps you personally off the hook for any problems and also the tax implications should be a lot lower as corporate income tax is generally lower than personal income. As for the exact structure I am guessing a limited company is the way to go but also maybe a LLC. Very important to talk to a tax lawyer or accountant. I am certain it varies from state to state.
Now in Canada we have a little loophole that exempts all capital gains on a company under $1.5 million. So with my companies I make sure I own 5% in my personal name. Now that exposes me to loses if I ever got married and then divorced or if I got sued for something else. But only 5%, so it is worth the risk. So the benefit is if I ever sell a company I get up to $1.5 million in tax free profit. So be sure to talk about that as well. Also income derived from a company is another tax issue. Dividends are usually taxed at a way lower rate and usually the best way to pay yourself. One other greasy thing I do is write up fake loans from my company to myself personally so I don't have to ever pay taxes. Then just declare default on the loan and whip it off the books down the line.
In any event structure everything first otherwise it is a headache to do it properly after and costs way more. Not only from a liability standpoint but a tax standpoint as well. Especially in AmeriKa, where I see daily they send the SWAT team after people who owe 4 cents.
" I'M NOT A CHRONIC CUNT LICKER "
Canada, where the women wear pants and the men wear skinny jeans