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themuffinman
06-01-2010, 12:30 PM
am starting a business soon ( pool hall and bar )

the business is going to be billirads and bar and food together
,am worried about the final cost and the and if am gonna make it or no ,

my problem is , that i estimated the total cost it came out to about 120,000
thats pool tables (16 total )
and bar mid size bar
( small size ketchem
arcades ( company owned profit is 50/50 for the arcades )
the thing is people are telling me that it going to cost more then that because of the other small stuff , it will reach 300,000 , now am worried and i have this thing in my head that i cant do it ,

and one more thing is it good for to have that business , specialy now there is no smoking in my state ( michigan ) i think thats better to have none smoking so alot more people can enjoy ,

so please can any one tell me please if my numbers are right ,

and can someone tell me if that business can make it or no ,

far as i see it , if the place is medium bussy can make me around 25,000 a month , if am wrong tell me please

Business Attorney
06-01-2010, 02:19 PM
Hi, themuffinman. First, let me welcome you to the forum. You asked a lot of good questions but it takes someone with specific knowledge of your business plan to tell you whether the original $120,000 in start-up costs is reasonable.

You should have a line-by-line budget. Someone can look at a list of items and see whether an obvious item is missing or seems too low. An aggregate number is really meaningless to anyone but you, since we don't know what goes into it.

Even if everything you can think of is included in the budget, you should still have a cushion for contingencies. It is true that there is almost always going to be an unexpected expense or two. If you have done a good job on the budget, a cushion of 10% or so should be adequate. A cushion of 150% ($180,000 overruns on a $120,000) simply would mean your original budget was very poorly thought out.

Your budget should include a reasonable cash reserve (not part of the 10% contingency). In the early months of a new business, you will be building your customer base and will be ramping up your revenues to get to your eventual target numbers. While your revenues are growing, you still need to be able to pay the rent, salaries, utilities, etc...

Also, to get to the revenue numbers, don't forget to build advertising and promotion expenses into your start up budget. It does no good to open the doors if no one is there.

As for the question on non-smoking, as a non-smoker myself, it would help, rather than hurt, the chances of my visiting the billiard hall. When my daughter comes home from the Navy, she likes to get out and play a game of pool, something she picked up from her shipmates. If I had to spend a couple of hours in a smoky pool hall, as much as I like to spend time with my daughter, I'd pass on it. But I know that for some people, not allowing smoking would be a drawback if other places allowed smoking. In Illinois, where all smoking in public places like restaurants and bars is banned, everyone is on the same footing.

Harold Mansfield
06-01-2010, 02:35 PM
am starting a business soon ( pool hall and bar )

the business is going to be billirads and bar and food together
,am worried about the final cost and the and if am gonna make it or no ,

my problem is , that i estimated the total cost it came out to about 120,000
thats pool tables (16 total )
and bar mid size bar
( small size ketchem
arcades ( company owned profit is 50/50 for the arcades )
the thing is people are telling me that it going to cost more then that because of the other small stuff , it will reach 300,000 , now am worried and i have this thing in my head that i cant do it ,

and one more thing is it good for to have that business , specialy now there is no smoking in my state ( michigan ) i think thats better to have none smoking so alot more people can enjoy ,

so please can any one tell me please if my numbers are right ,

and can someone tell me if that business can make it or no ,

far as i see it , if the place is medium bussy can make me around 25,000 a month , if am wrong tell me please

I'm from Michigan, but most of my Bar, Nightclub and Restaurant Management experience (with the exception of 1) is here in Vegas.

I would say that your friends are telling you correctly. You have touched on some basic costs, but you haven't even begun to scratch the surface on what it will actually cost to open.

First, what about a liquor license (here it's around $10k, a big dent in your $120k budget), license to serve food, license for pool tables, and business license? How much are they? Plan on having a Dance Floor(even if it's just an area where people could be dancing), Bands, Jukebox, or Karaoke ? add a few more licenses.

I don't remember how it works in Michigan, but here..you have to have the location secured (which means lease signed) before you even apply for your licenses.
That means you will be paying rent while you are waiting for approval. Here in Vegas, that can take months for the liquor ( and since we have gaming even longer for that license)

Also, what about stocking the place for opening? Your initial liquor and food order are probably going to be your most expensive because you don't have any profits to use...and first liquor order is a monster. The last local bar that I helped open, the initial liquor order was over $50k. It can obviously be even more depending on how many premium brands you want to stock. If I remember correctly, you can't order anything by the bottle...it has to be a case at a time. Sometimes you can get a half case and you may get a few promotional bottles (don't remember how that works since the state controls the liquor) .

And it is illegal to buy outside bottles or purchase anything from anyone other than the state (in Michigan).

If your liquor license is anywhere close to the price of ours and you add the cost of your first liquor order, you are already almost done with half of your $120k budget and you haven't purchased anything yet.


Have you included the cost of furniture, kitchen appliances, plates and silverware, glassware and other bar supplies, Flat screen T.V.'s ?

Next you will need insurance. Bars need hefty insurance.

And what about operating expenses until you actually start making some money?

Who's going to work the joint (employees)?
Who's going to clean the place(cleaning crew)?
Electric bill.
Cable bill with Sports package.
Garbage
Security ( since bars are not open all night in Michigan like they are here)
Payroll
Gas..in a kitchen the gas is running all day and night, The gas bills can be hefty.

You will be paying these things for months before you make any kind of substantial revenue..most bars spend the first year paying off things that they didn't account for, that was done on credit or contingency.

I would say it could easily be more than what you are estimating, especially if this is your first bar.

I have opened at least 10 Bars in my lifetime and unforeseen expenses always happen when you are trying to open a new place that you don't account for in your budget...anything from plumbing work that needs to be done to pass Health Department Inspection, to Restroom Accessibility for the Handicapped that you don't get a grandfather clause for like the last owner.

The thing is,...you can't budget for them because most times they have something to do with passing some kind of inspection, and you don't get an inspection until you have secured the place.
Also some departments won't inspect for one license, until you have been approved for another. The whole thing is a big clusterfox and you have to really know how to get bureaucrats moving or they will cost you weeks.

It's a big undertaking, I wouldn't go into it on a limited budget.

As far as the smoking thing goes...if it's all the same for everyone, then you are on the same plane..but if it's like it is out here, you can still smoke in bars with certain stipulations. Bars that didn't make the construction changes needed to have both food and smoking..didn't make it. For some, it was more cost effective to do away with food, so that people could still smoke while gambling. Gaming is the bar revenue out here, not liquor or food sales.

themuffinman
06-01-2010, 07:20 PM
I'm from Michigan, but most of my Bar, Nightclub and Restaurant Management experience (with the exception of 1) is here in Vegas.

I would say that your friends are telling you correctly. You have touched on some basic costs, but you haven't even begun to scratch the surface on what it will actually cost to open.

First, what about a liquor license (here it's around $10k, a big dent in your $120k budget), license to serve food, license for pool tables, and business license? How much are they? Plan on having a Dance Floor(even if it's just an area where people could be dancing), Bands, Jukebox, or Karaoke ? add a few more licenses.

I don't remember how it works in Michigan, but here..you have to have the location secured (which means lease signed) before you even apply for your licenses.
That means you will be paying rent while you are waiting for approval. Here in Vegas, that can take months for the liquor ( and since we have gaming even longer for that license)

Also, what about stocking the place for opening? Your initial liquor and food order are probably going to be your most expensive because you don't have any profits to use...and first liquor order is a monster. The last local bar that I helped open, the initial liquor order was over $50k. It can obviously be even more depending on how many premium brands you want to stock. If I remember correctly, you can't order anything by the bottle...it has to be a case at a time. Sometimes you can get a half case and you may get a few promotional bottles (don't remember how that works since the state controls the liquor) .

And it is illegal to buy outside bottles or purchase anything from anyone other than the state (in Michigan).

If your liquor license is anywhere close to the price of ours and you add the cost of your first liquor order, you are already almost done with half of your $120k budget and you haven't purchased anything yet.


Have you included the cost of furniture, kitchen appliances, plates and silverware, glassware and other bar supplies, Flat screen T.V.'s ?

Next you will need insurance. Bars need hefty insurance.

And what about operating expenses until you actually start making some money?

Who's going to work the joint (employees)?
Who's going to clean the place(cleaning crew)?
Electric bill.
Cable bill with Sports package.
Garbage
Security ( since bars are not open all night in Michigan like they are here)
Payroll
Gas..in a kitchen the gas is running all day and night, The gas bills can be hefty.

You will be paying these things for months before you make any kind of substantial revenue..most bars spend the first year paying off things that they didn't account for, that was done on credit or contingency.

I would say it could easily be more than what you are estimating, especially if this is your first bar.

I have opened at least 10 Bars in my lifetime and unforeseen expenses always happen when you are trying to open a new place that you don't account for in your budget...anything from plumbing work that needs to be done to pass Health Department Inspection, to Restroom Accessibility for the Handicapped that you don't get a grandfather clause for like the last owner.

The thing is,...you can't budget for them because most times they have something to do with passing some kind of inspection, and you don't get an inspection until you have secured the place.
Also some departments won't inspect for one license, until you have been approved for another. The whole thing is a big clusterfox and you have to really know how to get bureaucrats moving or they will cost you weeks.

It's a big undertaking, I wouldn't go into it on a limited budget.

As far as the smoking thing goes...if it's all the same for everyone, then you are on the same plane..but if it's like it is out here, you can still smoke in bars with certain stipulations. Bars that didn't make the construction changes needed to have both food and smoking..didn't make it. For some, it was more cost effective to do away with food, so that people could still smoke while gambling. Gaming is the bar revenue out here, not liquor or food sales.




thank you for the replies people,,, but here is wat i have set


-liquer liciense = 12,871 , from the city of sterling heights
-pool tables with ( ball , racks , 4 cue sticks for each table , and lighting ) = 23,000
-bar finish buildup = 15,000
-kitchen = ? am stuck here cant find out yet - ( small kichten i prefer
-liquer and beer inventory = i have all that my uncle owns a liquer store
-arcades = free , the compay is providing with all the arcades for profit split
-workers i have 3 brothers to work with me , one is chef/ cook / me bartender
my other brother cashier / plus 4 more workers
-resturant furniture , $10,000 with everything , food will be served in little basket with paper under it , classic way to serve the wings and fry chicken and burgers ,

Flat screen TVS 32" for 240$ = 15 tvs total , and its one cable bill

the place is carpeted already and it has lighting allready inside of it , it used to be big dealership for cars ,

5,000 for food invertory (

the place is nice and semple not to fancy not to old , but good place to hang out ,

so can you telll me if am missing somthing ,

just put your place in my shoes and think , should i go for it or not ,


that wat my calculation is adding up to for the total cost with everything ,
thats with counting the big stuff and the small stuff
is 79,000 , make it 85,000 thousand ,

Harold Mansfield
06-01-2010, 07:58 PM
thank you for the replies people,,, but here is wat i have set


-liquer liciense = 12,871 , from the city of sterling heights
-pool tables with ( ball , racks , 4 cue sticks for each table , and lighting ) = 23,000
-bar finish buildup = 15,000
-kitchen = ? am stuck here cant find out yet - ( small kichten i prefer
-liquer and beer inventory = i have all that my uncle owns a liquer store
-arcades = free , the compay is providing with all the arcades for profit split
-workers i have 3 brothers to work with me , one is chef/ cook / me bartender
my other brother cashier / plus 4 more workers
-resturant furniture , $10,000 with everything , food will be served in little basket with paper under it , classic way to serve the wings and fry chicken and burgers ,

Flat screen TVS 32" for 240$ = 15 tvs total , and its one cable bill

the place is carpeted already and it has lighting allready inside of it , it used to be big dealership for cars ,

5,000 for food invertory (

the place is nice and semple not to fancy not to old , but good place to hang out ,

so can you telll me if am missing somthing ,

just put your place in my shoes and think , should i go for it or not ,


that wat my calculation is adding up to for the total cost with everything ,
thats with counting the big stuff and the small stuff
is 79,000 , make it 85,000 thousand ,

I still stand by what I and Business Attorney say, when it comes to opening a new Hospitality joint, you can't budget unforeseen circumstances and every bar, restaurant or nightclub that I have ever opened (ranging from single owners in for $500k to corporations in for $6mill) there are always unexpected costs and delays. I have never seen one open on budget. Most times it's the budget that escalates to get it open on time.

Honestly ( and I know what kind of area Sterling Heights is) I have never seen anyone open a place for $120k. Take over the lease of an existing bar, yes..open one from scratch. Never. And that's covering 4 states MI, OH, FL, and NV.

As far as the liquor goes, I know I haven't run a Bar in MI for over 15 years, but at that time, there was no way that you could legally supply your bar from any other outside source other than the State Liquor Control Commission( or what ever they call their liquor distribution entity)

It was highly illegal and could cost you a fine or your license and you can bet that the first few months that you are open, the Liquor Control Commission will spot check you to insure that you are abiding by the rules. They will send in people that look young to see if you card them. They will check up on you. Everyone tries to beat the system.

If I am not mistaken (it's been a while), the seals for stores are different from the seals for bars. So are the taxes.
Retail licenses are different from Tavern Licenses. Although a Tavern can get a retail license to sell package liquor TO GO.

If you are caught pouring and selling store bought ( or acquired) liquor and selling it, it's trouble.

Unless those laws have changed, I would be wary of trying to beat the system in that way. I am sure that they have seen it all before.

Another thing that I don't understand...why buy the pool tables? You can get the same 50/50 split on them from an amusement company as the jukebox or video games. Let someone else pay to have them recovered and supply you with fresh sticks, and balls...that stuff gets expensive. People love stealing 8-balls and Q-balls ( I don't know why)

So you are in $85k. How much is the lease?
what kind of deposit is required?
How long will you have to wait for licensing..IOW, how long is it possible that you will have to pay rent before you can open?
What about the kitchen? Is it already set up or do you have to add a kitchen and purchase a grill, fryers, prep tables..basically a whole kitchen.

Walk in cooler? Do you need 2 of them? (one for beer, the other for food)
What about a POS /Inventory system. You don't have to get Micros (It's pretty expensive), but you can't run a bar on a cash register. You will loose your ass.
What about plumbing? If this place wasn''t a bar before, what's it going to cost to run beer and soda lines from the back to the bar?

I am putting myself right in your place because I have been there countless times and there are so many things that bar owners never think about.

Have you ever worked in or run a bar before?

themuffinman
06-01-2010, 09:30 PM
i did work in a bar lol

Harold Mansfield
06-01-2010, 10:51 PM
Just trying to do what you asked. Put myself in your shoes and I don't think there is a nightmare opening scenario or cost over run that I haven't seen in 15 years behind the bar and in management.

Inevitably, it all usually comes down to something like this...After you have already gone 40% over budget, something needs to be installed or brought up to code and it's a rush job because you need to get the doors open ASAP so that you don't have to pay another months rent while waiting for your next inspection window or something of that nature.

You may be able to get a break on running the lines from the soda company that you go with. Sometimes they will install the lines for free, in order to secure a lifetime contract to sell their product (Coke, Pepsi..what ever).
Sometimes that deal goes for beer companies too....however, many will not undergo the expense for a first timer with a limited budget...it may be seen as a risk...you have to try and get a deal.
If it were you second bar, you could definitely get them for free, but your first...you may have to be happy with a discount. I'm just speculating here..

There are all kinds of things that you can do to cut costs, but the cost that are inevitable are substantial.

People under estimate how much little things add up like Bar juice, Fruit, Paper products, Bar supplies and tools, rubber bar mats (code), sturdy glassware that doesn't break (and enough of it), a dishwasher for behind the bar (and the installation of it), the shelf liner that goes underneath the glasses ( charge by the foot and it's expensive), security cameras ( you need them), and all kinds of little stuff that alone may be hundreds, but together adds 10's of thousands to the final tab.

A bar is a lot of work and a lot of expense. I just don't think $120k, in your market, is going to cut it..especially to open in a building that wasn't built for, piped for, or coded to be a bar/restaurant.

I can see the inspections alone driving up your cost....just having to put in things like floor drains behind the bar could cost you thousands.

I spent a lot of time in the business and at some point wanted my own place and believe me, if I thought $120k would cut it, I would have done it 10 years ago.

themuffinman
06-02-2010, 10:24 AM
you know somthing your right , i went around asking the city and people and installing everything from bar to ketchen , went way over 120,000 ,

my brother owns a resturant he came over and added all the cost , he said am looking for 250k easy to spend on this ,

so am gonna hold on to the thought when i have more money ,,

i just loved the idea of having my own chill sports bar to have ,
something to have for years atleast 20 years you know

well thank you so much man you help alot , i already recommanded you in the foruoms lol

thanks again , hopfully when i have more money and open the place , make sure to come over and hang out , free round of beers on the house , lol

Harold Mansfield
06-02-2010, 10:37 AM
Sounds like a good plan.
When you do get it all together, just remember that owning a bar is a business first. It's only fun if it's successful.

If you have it up next time I come to town, I suppose I could be forced into coming by for a round of comped beers.:)

phanio
06-02-2010, 01:58 PM
Hold on there cowboy - don't give up so fast. Maybe its not about how much it will cost but about what you can do given what you have.

If you felt ok to move ahead at the $120K costs - then do that - this might mean that you don't provide food right now (how much will that cut off the start-up costs) or that you have to scale down your bar or purchase used tables and funiture.

Yes, most people do under plan their financial needs as very well pointed out here. But, running a business also means learning how to manage a business. Thus, if your budget is $120K - then find ways to manage your business to come under those costs - like focusing on what is proirity and what is just desire. Get the priority out of the way and under budget - then start bringing in the other stuff - actually leveraging your business success to expand your business.

If and when you find that things are not going the way as planned or to budget - then manage for ways to fix them that do work with your budget.

If you give up now - you might never come back!

Harold Mansfield
06-02-2010, 02:13 PM
Hold on there cowboy - don't give up so fast. Maybe its not about how much it will cost but about what you can do given what you have.

If you felt ok to move ahead at the $120K costs - then do that - this might mean that you don't provide food right now (how much will that cut off the start-up costs) or that you have to scale down your bar or purchase used tables and funiture.

Yes, most people do under plan their financial needs as very well pointed out here. But, running a business also means learning how to manage a business. Thus, if your budget is $120K - then find ways to manage your business to come under those costs - like focusing on what is proirity and what is just desire. Get the priority out of the way and under budget - then start bringing in the other stuff - actually leveraging your business success to expand your business.

If and when you find that things are not going the way as planned or to budget - then manage for ways to fix them that do work with your budget.

If you give up now - you might never come back!

I agree with your train of thought. But for this particular instance, the big issue cost wise is that he wants to convert a building into a bar.

Buying used furniture and holding back on the kitchen is not the bulk of his financial issues.

If he were say...taking over an existing bar or restaurant, I would say that he could probably pull it off, but he is basically building a bar, which means all kinds of equipment, code and plumbing issues that are going to be expensive...basically construction costs.

I have to disagree, I don't see $120k cutting it no matter how much you trim and sacrifice.