When it comes to buying a bar, there are a lot of things to consider. It’s not as simple as just picking out your favorite spot and handing over the cash. There are a lot of things you need to take into account before making such a big purchase. This article will outline some of the most critical factors you need to think about when purchasing or buying an existing bar.
Why Buy an Existing Bar
There are many reasons why buying an existing bar might make sense for you. For one, it’s much less work than starting a bar from scratch. You won’t have to worry about building the space, getting all the necessary permits and licenses, or hiring staff. All of that will already be taken care of by the previous owner.
Another big benefit is that an existing bar already has a built-in customer base. This is especially valuable if the bar is located in a popular spot with high foot traffic. It can take a long time (and a lot of money) to attract customers to a new business, which is a significant advantage of buying an existing bar.
Of course, there are also some risks to buying an existing bar. For example, you won’t have as much control over the direction of the business. And if the previous owner didn’t run the business well, you could be inheriting many problems. That’s why it’s important to do your due diligence before making an offer on a bar.
What to Consider in an Existing Bar
When you’re looking at potential bars to buy, there are a few key things you need to keep in mind.
The location of the bar is one of the most important factors to consider. You want to make sure it’s in a safe area with high foot traffic. Ideally, it would be close to other popular nightlife spots. This will make it easier to attract customers.
Before making an offer on a bar, you need to have a clear understanding of the operating costs. This includes things like rent, utilities, labor, and inventory. The last thing you want is to be surprised by hidden costs after you’ve already made the purchase.
Liquor License and Permits
You’ll also need to make sure that the bar has all the necessary licenses and permits. This includes a liquor license, of course. But it might also include things like a food permit if the bar serves food. If any of these licenses or permits are expired, it could be a major headache (and expense) to get them renewed.
Type of Bar
There are many different types of bars, from dive bars to upscale cocktail lounges. It’s important to choose the right type of bar for your target market. For example, if you’re aiming for a young, hip crowd, a dive bar might not be the best choice.
Reason for Sale
When you’re looking at listings for bars, pay attention to the reason the owner is selling. In some cases, it might be because they’re retiring or moving to a new city. But in other cases, it could be because the business is struggling. If the latter is true, you need to be extra careful about making an offer.
Steps to Buy an Existing Bar
The steps to purchase an existing bar are:
- Research the market
- Find a reputable broker
- Look at listings
- Consider location, operating costs, liquor license and permits, type of bar, and reason for sale
- Make an offer
- Negotiate the price
- Get a loan or obtain funding
- Close the deal
Buying an existing bar can be a great way to get into the hospitality industry with less risk than starting a business from scratch. But it’s important to do your due diligence and consider all the factors we’ve outlined before making an offer. With the right research, you can find the perfect bar for your needs.