Bars for sale are typically one of our most searched and fastest moving inventory. What makes this category of listings so appealing and who is doing the buying? More importantly, what are the five important tips you need to acquire a business opportunity that includes the allure of alcohol? Here’s some insight into who is taking the plunge along with five things you must know before putting your toes into the buying pool for pubs or bars. First, who is buying?
Bartender Seeking a Location
Harry Gordon Johnson said of the bartending profession, “The greatest accomplishment of a bartender lies in his ability to exactly suit his customer.” Many of those coming to our site seeking bars for sale are passionate about the business and have a loyal following because of their ability to suit his or her customer. They are in the business today but seeking a place they can call their own. They want the autonomy of running not just a bar but their bar. Experienced, often with many years on the job, they have always taken a paycheck (and lots of tips) home but want to experience ownership for themselves. Often they are very accomplished and have won awards for either their skills in serving a cocktail or the performance art associated with serving a drink. Doesn’t sound like you? Read on.
Grown up College Guy
The second category of buyers for the bars for sale in our inventory are often still on the younger side (mid-thirties or so) and have fond memories of the many nights spent at the favorite watering hole in college. They may still be avid visitors to the local pub and figure this could be the ideal path for them. They have often gone the corporate route but find cubicle work or working from home just doesn’t have the people based stimulation they need. They are social animals who love connecting with others. Blocked off by a cubicle or limited to chatting with co-workers through a Zoom screen isn’t cutting it. Their passion lies in talking with others and the social skills of being behind the counter and serving a friend makes the lifestyle of owning this type of business ideal.
Sam Malone – and Cheers
The third buyer looking at bars for sale compares them with the iconic sitcom Cheers and its bartender-owner Sam Malone played by Ted Danson. Who can forget the place where “everyone knows your name?” These buyers are seeking small pubs that are less established and feel more like the neighborhood watering hole rather than a corporate or franchise type location. This buyer is often a baby boomer recently retired who is seeking a second start at a career or somewhere to hang out now that the 9 to 5 lifestyle has ended. Rather than sitting in a pub and drinking away his retirement, he will purchase one so he is earning the profits.
If one of these descriptions sounds familiar, you might be a candidate for one of our bars for sale. Do they require a unique approach to buying? Absolutely. Here are five important tips as you narrow down your search.
Tip 1: Financial Review will not be your friend.
Bars for sale are the last holdout for the unreported income side of the restaurant business. That is because they are the least franchised business model. Visiting the local bar just isn’t the same if there are 25 more of them in the same town. They also have the highest level of cash still changing hands and fewer credit card transactions.
Since they are rarely franchise operations, you are purchasing from an independent operator. He or she will not have the greatest focus on financial statements. He is more concerned with making sure the liquor order is right and his customer’s favorite beer is on tap rather than confirming that the profit and loss statement is done five days after the period ends.
Tip 2: Be Prepared for Inherent Risk
There is a reason corporate refugee seeking strong financials are not buyers for this market. Bars for sale have the least “provable” income stream. They have limited amounts of food – typically referred to as “bar food” and that means almost anything fried. No particular culinary skill is needed - just lots and lots of fryers.
They also serve alcohol which leads to all kinds of risky behavior and have to be heavily insured against everything associated with that. For that reason, those seeking a pub for sale may need to accept some risk to buy into this model.
Tip 3: You Must Sell Yourself to the Owner – even as a Buyer
As a business broker specializing in restaurant and bar sales for two decades, transactions on bars for sale are where I have witnessed the most emotion surrounding deals. Owners form unique attachments to their locations and clientele. They are seemingly more concerned with who wants to buy than how much they are paying.
This can benefit buyers seeking bars for sale because often that leads to innovative pricing strategies or selling strategies with owner financing possible on the transaction. Sellers will request things like a free bar tap for life in lieu of immediate income. It is important for buyers to bond with the sellers in the meetings and critical that they have visited ahead of time as a customer. You will lose all authority if you request a seller meeting and have not seen the place in action at night.
Tip 4: The Light of Day is not Friendly
That brings up a new point. While a visit at night is important, those seeking bars for sale should remember these locations are not especially attractive in the light of day. When the lights are dim and the drinks are pouring, there is a magic associated with the neighborhood pub you can feel in the air. The drinks are flowing, the conversations are friendly, and the game is playing on the TV’s overhead. In the cold reality of day, sunlight reveals the scuffs, stains, and traffic patterns of a busy night before. Those seeking picture perfect locations should steer clear of bars for sale. That odor of spilled beer is the smell of money to those in the know.
Tip 5: It’s Worth It
Overall, bars for sale are popular because of that magic associated with the lifting of a beer or toast with a stranger you just met that night and now call a friend. It’s a phenomenon that dates back the beginning of time. As social animals, we relish and enjoy these experiences. It is the reason bars for sale will always remain an important part of our inventory.
Robin Gagnon, Certified Restaurant Broker®, MBA, CBI, CFE is the co-founder of We Sell Restaurants and industry expert in restaurant sales and valuation. Named by Nation’s Restaurant News as one of the “Most Influential Suppliers and Vendors” to the restaurant industry, her articles and expertise appear nationwide in QSR Magazine, Franchising World, Forbes, Yahoo Finance, and BizBuySell. She is the co-author of Appetite for Acquisition, an award-winning book on buying restaurants.