Posted on 03/02/2010 4:33:18 PM PST by Yaelle
In this economy, even Rush Limbaugh said to turn your luck around by creating your own destiny, doing what you'd love to do. What if you would love to buy a pub, and such an opportunity is before you?
Have any of you done this? What were some of the pitfalls? What are the big decisions that factor into whether or not to take the plunge?
The opportunity that presents itself in this instance is of small capacity, maybe 50 persons, light and airy, with a kitchen for pub food as well. Location could be listed as "Could NOT be any better." Water view, tourist and local favorite area, plenty of foot traffic.
The long work day, or no free evenings, weekends, and holidays, does not frighten us.
And certainly everything you said about marketing the restaurant through the beer releases, keeping in touch with customers, etc.
I own a small business and one of the most important lessons that I’ve learned is that you can never control your revenue, but you can always control your costs. Know your margins, keep metrics on them and do your best to maintain them.
All I can offer is this: if you are good, very good in the restaurant business, figure a gross margin of 50%. Then again, if you are good, very good, figure 30-35% operating expenses.
That leaves 20% if you are an optimist in pro forma financial calculations. Figure in the taxes, and you are lucky to clear 5%. If your annual revenue from operations is $10 million, you can be rewarded for your efforts (somewhat).
I hope this helps.
5.56mm
Don’t drink your inventory!
Appreciate all the great feedback/warnings/encouragement! A lot of things to think about. Just doing homework right now, and the more time we take, the more informed our decision will be. Would be nice to be in a position to call our own shots, even with the nasty gov’t interference and roadblocks that we would undoubtedly encounter. Running a pub will require long hours, patience and diligence. Definitely wondering what the community will be like five years from now. It’s fun to be optimistic, but it’s more pragmatic to be cautious. Here’s to a lot of both. Thanks for all the schooling.
You can get online assistance but, more importantly you can hook up with a mentor to meet with. Use the zip code search function on their home page to find the nearest office.
The company I work for has a thriving suggestion program that gives money and prizes each month to employees with the best money-saving ideas. The ideas are evaluated and assessed on their cost-savings (the company measures everything, based on Deming's principles) and we can quantify the savings over a year's time. The employees use the suggestion program and we get decent bonuses each year, based on the millions of dollars that we save by cutting waste out of our manufacturing process. I don't know anything about restaurants but most everyone has mentioned the razor-thin margin you'll be up against in trying to make a profit.
They are still open, and considering the economy up here, combined with the fact we are in Michigan....thats a victory
Definitely some breakfast stuff. I agree. Good coffee too.
I’ve always thought the stats were more like that. Obviously not 90% fail the first year. And pubs — with the emphasis on beer and wine — probably have an easier time than actual restaurants.
Thanks for that link.
I will continue to be the homeschooling mom, but personally, I actually DID love working in hotel kitchens for very little pay once, many moons ago! I was very lucky enough to have prepared food for President Reagan in my day.
Not even sure that is allowed -- but there is no space for that. We would have to call that one "the beach."
LOL!
This is important. I am dying to know. Part timers still get unemployment, social security, taxes...
You ask great questions. How to use the location to the fullest and make up for the people who say “I liked it better before.”
Brilliant answer. Thanks. A lot to plan.
looking at entrepreneur.com now - thanks
OPINION:
I researched your subject this afternoon Yaelle, but then I got busy and accidently cleared out the history so I’ll sum up here what I read.
1. You are responsible for drunks if they leave the bar drunk (in many states).
So if they hurt themselves or get in a car accident you may be sued.
2. Some of the old-established pubs are having financial woes due to micro-breweries as competitors.
AN IDEA for point no. 2: One of the pubs was able to increase their clientelle by promoting various micro-brewed local product at the pub. The pub also established its own micro-brewery.
Determine your “u.s.p.” Yaelle. Your unique selling principle, then don’t deviate from your marketing strategy.
Match your mediums of advertising with your age/sex customer profile.
Do as much “guerilla” marketing as you can. In house promotions, community events, stage a music festival, a motorcycle night, etc.
Get yourself a website, you can take reservations for special events e.g. Valentine’s, et al.
To the extent I can and you want, I would love to help.
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