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Financing a new business(tavern)

Discussion in 'Off Topic [BG]' started by SnoMan, Jan 26, 2006.


  1. SnoMan

    SnoMan Words Words Words Supporting Member

    Jan 27, 2001
    Charleston, WV
    :help:

    I'm checking with pretty much everyone that I know on this...so I wanted to check and see if any of you guys may have any useful information to share as well.


    I'm looking to start my own business. I would like to own and operate a small bar(tavern).


    I would like to work up to owning a music venue, but that's later on, I need to start small.


    My questions is this: Do any of you know anyway that I may find financial support for this without having personal equity or items to take out loans against.


    I'm determined to find a way, I've been debating this idea for a while now and have been looking at it in more detail for the past week or so.


    Anyone have any positive information to share?


    :help:
     
  2. You said "tavern". I'm going to Moe's.

    - Dave
     
  3. MJ5150

    MJ5150 Terrific Twister

    Apr 12, 2001
    Lacey, WA
    Well, you could always open a diner first, and attract local high school kids. When they grow up and get to be legal drinking age, you could then go for the night club idea. You'd have a built in client base. That really only works in cities like Beverly Hills though. :eek:

    On a serious note, what about a business partner? Once things get rolling, you could buy him out? It worked really well for Carey Hart!

    -Mike
     
  4. SnoMan

    SnoMan Words Words Words Supporting Member

    Jan 27, 2001
    Charleston, WV
    I've thought about the idea of a partner.


    I'm just not sure how I would go about finding a partner.


    A well advertised and ran bar is money. I can sell the idea if I can find the right person interested.


    That's something I'll be continueing to snoop out more in my area.
     
  5. MJ5150

    MJ5150 Terrific Twister

    Apr 12, 2001
    Lacey, WA
    Start off with some of the local taverns already open. Ask them if they are looking for a partner, or even to sell it to you.

    We all have people in our communities with money, and we know who they are. Make an effort to meet some of them on a professional level. Just be ready to have a solid business plan if you go this route. Any successful business owner will sniff you out in a heartbeat if you aren't organized.

    -Mike
     
  6. If it's a tavern, I'll help to finance it by buying a nice hardy lager or two from time to time.
     
  7. Thor

    Thor Moderator Staff Member Gold Supporting Member

    Consider a few points.

    50% of new businesses fail. Most because they are underfunded or undercapitalized.

    A bank loan officer or other lender typically will feel more
    comfortable with a loan to you if it is fully secured by your
    assets. This way the bank feels that you have a vested
    interest in the success of the business.

    Taverns, bars and restaurants typically have very high
    operating costs. Cost management is not something you
    want to learn with your own money. I would take a
    bartending job first, work up to manager, tell the owner
    you want to learn the business. After a few years of doing it
    you will have a much better idea of it.

    Then later, keep your ear out for an owner looking to retire.
    Buy the business and have the owner take a note back.
    It is to his advantage to take the payments over time,
    as an annuity, or supplement to his retirement income.
    At this point you will have enough experience to evaluate
    the cash flow and operating potential of the business at hand.

    That is probably the easisest and safest way to get into the
    bar, restaurant or tavern trade.

    Good luck Sno.
     
  8. guy n. cognito

    guy n. cognito Secret Agent Member Gold Supporting Member

    Dec 28, 2005
    Nashville, TN
    The statistic is that 80% of new businesses fail within the first 12 months. You are correct in that most are underfunded and under capitalized.

    Sno- do you have any experience running a bar? What about working in a bar? Quite honestly, you are SOL if you expect to open a bar with no experience and no assets. No bank will lend you money to open a bar without collateral. No smart private investor would back someone without strong credentials. What you need is a rich uncle. Personally, I would never back a partner that didn't have his own equity, no matter how small at risk. Someone with nothing at risk has nothing to lose.
     
  9. hey...it worked for archie bunker...
     
  10. SnoMan

    SnoMan Words Words Words Supporting Member

    Jan 27, 2001
    Charleston, WV
    Thanks for the input guys.


    Please don't bother with further attempts to scare with me with statistics.

    TB is not the only, first or main source of information I am using. I just wanted to see if anyone could give me some useful tips or suggestions. Thats why I asked for positive information. And I appreciate those that were given.


    I'm still working towards this. It's not going to happen tomorrow. I'm just preparing myself right now and becoming more knowledgable. I have already began on my presentation for future partners or interested parties.


    I'm not going to run and hide in a hole far away from the thought of pursuing my own business just because niether I nor my family are rich. I've found many ways of obtaining money for businesses already, some appear as though they would work/be useful for my business, others would not. I'm just going to have to put more research into them



    Thanks guys,
     
  11. Call it a taverna and get 50 million times more people ;)
     
  12. plexibass

    plexibass

    Jun 30, 2005
    if you do a partnership make it a LLP. that way if your partner skips town or kills someone or whatever you arent responsible. what about an SBA loan?
     
  13. SnoMan

    SnoMan Words Words Words Supporting Member

    Jan 27, 2001
    Charleston, WV
    I've done some reseach on on SBA loans.

    From what I have read, I would find it difficult to get a worthwhile loan at this time. I'm working to improve that...but I need to make some adjustments and form some types of collateral before I can put too much further thought into that route.




    gah....got busy here at work and lost my train of thought....:meh:
     
  14. MJ5150

    MJ5150 Terrific Twister

    Apr 12, 2001
    Lacey, WA
    Right on dude. I hope it works out for you. Make sure you save a space in your new tavern for open mic nights. :D

    -Mike
     
  15. SnoMan

    SnoMan Words Words Words Supporting Member

    Jan 27, 2001
    Charleston, WV
    Oh, I do hope to have a small stage.

    My original idea was a concert venue, small local scale, but hopefully with enough room to attract a few national acts. I've "downsized" my idea to lower initial costs and lower upkeep costs and drop my management duties until I feel that I am capable of keeping up with more.

    When I get the bar going, if it's successful I plan on looking into creating a music venue or two and possibly a sports bar.

    But the ideas for expansion are far far away and not deserving of more than a cause day-dream here and there at this point.

    :)
     
  16. Bruce Lindfield

    Bruce Lindfield Unprofessional TalkBass Contributor Gold Supporting Member


    Wouldn't you have to speak Greek and lose a lot of money on plates? ;)
     
  17. plexibass

    plexibass

    Jun 30, 2005
    just out of curiosity, a total ballpark figure here, what do you estimate the starup costs to be? good luck with it though. WHEN you get it open, be sure to have a talkbass.com night. id come from georgia to support it!!!! anything we can do to help you....hey wait a minute. maybe all the members can contribute some startup cash for you. just a thought.
     
  18. guy n. cognito

    guy n. cognito Secret Agent Member Gold Supporting Member

    Dec 28, 2005
    Nashville, TN
    Not trying to scare you, just prepare you for reality. Will you have sufficient capital to cover operating losses during your start-up period? What's your experience? What will you have at stake in this venture? What factors will make you a successful bar owner? Doesn't sound like you have an answer to those questions, but you'd better. Investors and lenders won't be impressed if you just try to wow them with moxy and determination. They also won't be impressed if you don't have good, thought out answers to tough questions like this.

    Go fish for compliments and encouragement if you want. In reality, you ought to be thanking those who are providing critical vision to your plan, as it will cause you to think critically yourself.
     
  19. SnoMan

    SnoMan Words Words Words Supporting Member

    Jan 27, 2001
    Charleston, WV
    The variable on the initial startup costs will be cost of the location.

    Depending on location, I could see initial costs ranging between $5k and $15k

    I'm basing this off the price for sale of charleston's largest rock club. With full PA and second level with bar I believe the asking price is 40k. And that's on the main strip downtown.


    They are utterly failing to promote the bar/bands appropriately. And they run few specials. Non on band nights....when you can walk half a block away and get into a bar that has no cover and drink specials.....what do you expect?

    That place could be made profitable with only some advertising and drink specials.
     
  20. guy n. cognito

    guy n. cognito Secret Agent Member Gold Supporting Member

    Dec 28, 2005
    Nashville, TN
    Let me point out one more thing:

    Of all of the upstart developers (read:busisnessmen) I've financed over the years, they all shared one, of many traits: They listen to criticism and learn from it.