Startup Question (Sports Bar)

**trip** · 06-07-2010 03:32 PM

Myself, and 3 buddies of mine that have been working together on and off for the last 15 years in the technology industry have come up with what we think is a killer bar idea in a college town. We are in our mid-30s, all think we have what it takes to run a successful business. We have restaurant and bar experience. We have done a lot of the research, and have begun our business plan. I am curious though, what some of you (hopefully with experience) think a mid to large size bar (250-500 capacity) in a college town will draw in revenue? I know it depends greatly on the town etc, but just some rough figures are fine to know if we should pursue. This is just a first step, we plan to talk to some bar owners and do some more in-detail market research. But if we are splitting net profits 4 ways, there is a certain amount we would all want to be able to draw before taking on something of this nature. Any rough figures would be great.

Thanks

**Dave89** · 06-08-2010 01:10 AM

I am unfamiliar with this industry and what kind of profits you will draw in, but I want to say that it is very difficult to run a partnership with this many people without having a complete understanding of your respective responsilbilities. Before you start this make sure you all have an exact idea of what your role is within the business. When dealing with this many people it is a matter of time before you disagree and a lack of communication could lead to the demise of your business. Numbers are very important and before you act on any idea you may have, make sure you research the market. Yes, it greatly depends on the town but I would assume a business like this especially in a college town is highly saturated, so I would highly suggest thinking outside the box and offering something that other local bars are currently not offering (for ex. different events that will keep students occupied and having a good time or an incentive for coming to bar, for every three times you come you recieve a free pitcher of beer). I hope this advice helps and wish you the best of luck!

Dave

**trip** · 06-08-2010 09:00 AM

Thanks for the advice about the 4 person partnership. I will definately take note of that. As far as the offering, we believe it to be extremely unique, and after surveying 100s of students at the university, we found that it would fill a large student-named gap in nightlife. In short, I am fairly certain it would be a successful independent venture, should the right person pursue it, but for 4 people, I do not know if the profits would be enough to justify the means.

**Will** · 06-08-2010 09:19 AM

No one can possibly predict the revenues even really as an estimate. It depends how many are in on each night (is the bar scene popular every night of the week there?), and what they are there for, and how easily you can actually fill that 200-250 limit.

It depends how you position the bar:
- some bars are known as places to go and drink a lot at the start of the night
- some are known for people going to chill out and have a few casual drinks
- lots of other combinations as you would know

Then the other factor is if your drinks/food prices are going to be really cheap to get people in the door, or if you are going to have it as more of an up market place where you price drinks at more of a premium.

There are so many variables that if someone was to give you even an approximate on revenue, they are just guessing and that is bad information. Maybe try and find out what revenue the other venues in the area take on different nights, and go from there?

**SCJeff** · 06-08-2010 12:27 PM

well what are you going to offer at this bar? Are you planning on offering food? or Just serve drinks and have a nice atmosphere?

I worked at a medium sized bar in my town as a server, and I know we had a budget of around 6-7 thousand dollars for a week day, and then upwards of 9-10 on weekends. Those numbers are with food mind you. So if you take those numbers and subtract the rent for the building, cost of food/drinks, utilities, then pay for the employees. Servers generally make 2.13 and hour and but then make tips to make up for it. Dishwashers, bussers, cooks, line cooks, prep cooks, hosts/hostesses, these are all positions that you need to determine if you going to need, or you and your partners are going to take up part of the jobs and do them yourself. A lot of places don't have bussers and hosts, the servers will just seat the customers and clean up after them, thats an easy way of eliminating expenses right there. But you will need cooks and a dishwasher. And then after you subtract all that, you'll have your net sales for the day. I never asked but I would assume he was probably netting 2-3k profit an evening, depending on if you met budget or not. But again thats money that goes back into marketing and other expenses that may show up.

And another way to cut expenses is to do something called a "tip share" where at the end of the night the bar and the servers take out 3% of their tips, and it goes into a pool, and then based on the number of hours worked and the time you were there, that money gets divided up among the hosts and bussers. And then they will be making 2.13 and hr that way but will make minimum wage through the tip share system.

It takes a lot of money to even get a bar/restaurant up and functional. If you have any type of computer program putting in drinks and orders, that runs you 10k alone for a decent software setup, and thats low end. Drink machines aren't cheap, keg coolers are not cheap. It's very very expensive to get a bar up and running.

Then not to mention the man hours that you four will be putting in. The bar I worked at was a guy that did pretty much what yall want to do, open his own sports bar. He was there until 3 or 4 every night and then had to be up there again by 11 the next day.