Insuring a bar

[jafeather]

I am seriously considering purchasing a local bar. I have a pretty deep history of managing restaurants and bars, but none on a "ownership" level. IOW, I have extensive history with the numbers I was able to manage at my level, but very little with the numbers that would be out of my control.

Most of the "new" information (rent/mortgage, utilities, etc.) I have been able to find from either public records or what limited information the current owner has.

Unfortunately, the current owner keeps horrible (none, really) books. He also cuts corners in ways I would never do. One of those ways is insurance. He has it....but not what he should....or really even close.

This has been the only aspect of this business that I've been unable to put a realistic estimate on. I just can't find a place where people are saying what they pay for insurance on their bars.

Soooooo....those of you that sell insurance or that own bars....what do you pay and/or where online can I find what people are paying without requesting an official quote?

[Jimbo]

I owned two bars over an 8 and a half year span. Feel free to Pm me with any questions. I can tell you to by all means incorporate and purchase a multi million dollar personal liability unbrella policy. My partner and I had a 5 million dollar umbrella and it's cost was only a few hundred dollars per year.

Your workers Comp rates are fixed by the State and should be easy to research. Ten minutes on the phone with an insurance broker will answer all your questions.

As far as the current owner not keeping good records, welcome to the world of a cash business. We looked at over 50 different bars before finding one with reliable records and bought that one. If the guy has been in business for 5 years or longer he is making money, if a year or less and wants to sell he is either losing his ass or on his deathbed.

Jimbo

[Bicycles_Biatch]

sorry to hijack... but I was wondering what the start up costs of a bar are... in your estimate.

Anyone know what the fees and time-frame for a liquor license in CA is.

[Jimbo]

BB, am pretty sure that would vary wildly state by state. For instance some states issue a fixed and limited number of liquor licenses and the license itself can cost hundreds of thousands of dollars just to purchasing an existing license before any other costs come into play.

All I know about Ca is that everything is too high out there. In Ok all the licenses required in total were less than 2 grand per year when I was in business.

Jimbo

[gordongecko]

Did you in invest in any type of inventory control system? (the auto pouring systems, etc)? As a new bar owner - what would you say your biggest headache was? Is there more insurance needed if you have live music?

[Jimbo]

[ QUOTE ]
Did you in invest in any type of inventory control system? (the auto pouring systems, etc)? As a new bar owner - what would you say your biggest headache was? Is there more insurance needed if you have live music?

[/ QUOTE ]

Both my bars (clubs) were live music clubs, the only additional insurance you need is to never book a country and western band. In 8.5 years I booked a C&W band only one time, had 11 fights, confiscated three knives, a blackjack, one set of brass knuckles and a .32 cal relvover. [img]/images/graemlins/smile.gif[/img]

Yes I was the first neighborhood type bar owner in town that purchased a measured pour system. It paid for itself in 90 days. FWIW I was also the first owner of a CD jukebox in the state, customers loved it, IIRC it cost around $4300 in the early 80's but made so much more than the 45's type of jukebox it was one of my better decisions.

Two other things I did that the customers loved was to install a candy bar machine and I bought an old Coke machine (bottle type) that customers used for self service. I had the machine set 3 degrees cooler than my walk-in and the regulars loved that ice cold beer.

Jimbo

[Poker_is_Hard]

My Long Term dream is to own a bar. However, I really have no idea what kind of start up costs that requires. I basically know I don't have enough now, and therefore would worry about it later down the line.

However, I would be curious if someone could give me a ball park figure I would need to shoot for. What kind of capital would you need to 1. Start a bar from scratch, or 2. buy and existing bar.

Say an existing bar was selling for 1.5 - 2 million. What kind of capital would you need to secure a business loan?

[Jimbo]

[ QUOTE ]
Say an existing bar was selling for 1.5 - 2 million. What kind of capital would you need to secure a business loan?

[/ QUOTE ]

1.5 to 2 million unless you are talking about a major franchise chain bar/restaurant it is very hard to get financing for a bar even with stellar personal credit. What the heck kind of bar do you want to buy for two million bucks????

Jimbo

[Poker_is_Hard]

I'm looking to buy a bar in Chicago. I know of at least one bar that I was told was going for ~1.5 million, and it wasn't even in a "Hot" spot. However, it was an above average size.

My goal is not to become rich or even support myself from the bar. I plan to own apartment buildings as my main source of income, and would have the bar on the side as far as income is considered. However, I'm sure my "side" bar will take up 110% of my time.

[Poker_is_Hard]

bump.