Calgarypuck Forums - The Unofficial Calgary Flames Fan Community
Old 05-24-2017, 09:44 PM   #1
FlamesAddiction
Franchise Player
 
FlamesAddiction's Avatar
 
Join Date: Oct 2001
Location: Vancouver
Exp:
Default Need Advice - Going Into Business For Myself

Hey all,

So after thinking about it for a long time, I have come to the conclusion that I hate my job and I hate my career. Everyday I go to work, I fantasize about quitting. Fortunately, I have been able to save up some money in the mean time. My background is in Earth Sciences (as is my wife's, although she has some restaurant management experience).

An acquaintance of mine is quite wealthy and owns 3 pubs (I think his net-worth is around $4.2 million). Two of the pubs have the same branding and he wants to sell the third to free up some cash to put into one of his other pubs (which is larger than all three combined) and to expand his franchises. Right now, the pub he is selling is a money maker, but it has some issues because he has been hands off for a while. His bar manager runs it and he says the guy is an idiot.

It nets about how much I make right now at my job, but I think there is room for growth. I am thinking of quitting my career and buying it. In no way do I expect it to be easy and I am sure that it will be a parade of putting out "fires" non-stop, but part of me really wants to have complete creative control over something like this. I have been reading books about it and plan on using the same format and bookkeeper.

Am I insane to do something like this? Can any offer me sincere words of encouragement or advice? I am scared, but I really want to do it. But I am also a crazy person...lol.
__________________
"A pessimist thinks things can't get any worse. An optimist knows they can."

Last edited by FlamesAddiction; 05-24-2017 at 09:47 PM.
FlamesAddiction is online now   Reply With Quote
Old 05-24-2017, 09:47 PM   #2
DuffMan
Franchise Player
 
DuffMan's Avatar
 
Join Date: Apr 2004
Location: 127.0.0.1
Exp:
Default

Owning a bar would be awesome
__________________
Pass the bacon.
DuffMan is offline   Reply With Quote
The Following 2 Users Say Thank You to DuffMan For This Useful Post:
Old 05-24-2017, 09:56 PM   #3
Slava
Franchise Player
 
Join Date: Dec 2006
Location: Calgary, Alberta
Exp:
Default

Hard to say not knowing your situation, but working for yourself is the best. Worst case scenario you lose money and go get another job?
Slava is offline   Reply With Quote
Old 05-24-2017, 10:02 PM   #4
Sluggo
Scoring Winger
 
Sluggo's Avatar
 
Join Date: Nov 2009
Exp:
Default

^ duffmans post should really be in green text^ investing or owning a bar is one of the worst financial decisions you could make unless you are excessively lucky or have awesome skills/perseverance and cooking skills. If you have been around the bars as much as I have been it goes through booms and busts food is good and patronage is low, everything is good... patronage picks up and the cook cant keep up or takes short cuts food quality goes down sometimes you get raw wings, cook more than likely quits and the customers go elsewhere. Things calm down as a new cook learns his trade and builds customers until he gets the skill to get overwhelmed.

Last edited by Sluggo; 05-24-2017 at 10:05 PM.
Sluggo is offline   Reply With Quote
The Following 4 Users Say Thank You to Sluggo For This Useful Post:
Old 05-24-2017, 10:08 PM   #5
Hockeyguy15
Franchise Player
 
Join Date: Dec 2009
Exp:
Default

I say go for it. If it doesn't work out there's always insurance money.

Hockeyguy15 is offline   Reply With Quote
Old 05-24-2017, 10:12 PM   #6
Kjesse
Retired
 
Join Date: Oct 2003
Exp:
Default

Here are the biggest red flags:

-You comment how wealthy he is. That has no bearing on the value of the pub. And you don't know his debt load. He might look wealthy but you don't really know until you see how extended he is.

-You have bought in to the idea that because he wants to put the money elsewhere, you have an opportunity to buy the asset he wants to get rid of. That says: he either needs money or wants to get rid of a declining asset.

-Pubs come and go. You will not get wealthy buying someone else's declining asset.

-I could say so much more but I'll stop here for now.
Kjesse is offline   Reply With Quote
Old 05-24-2017, 10:19 PM   #7
DuffMan
Franchise Player
 
DuffMan's Avatar
 
Join Date: Apr 2004
Location: 127.0.0.1
Exp:
Default

Years ago, I hung out in a bar that 2 guys owned, started out as a pizza joint, but after a bit, they had bands, and was a late night bar for awhile. Left when the sun was up a couple of times.
Anyways, one night the one guy would get drunk and the other would bartend, then they'd alternate every night.
Thought it was a great idea.
__________________
Pass the bacon.
DuffMan is offline   Reply With Quote
Old 05-24-2017, 10:20 PM   #8
daaznfob
Backup Goalie
 
Join Date: Apr 2004
Exp:
Default

Do you have experience in food and beverage? Other than eating and drinking I mean.

Sent from my Nexus 6P using Tapatalk
daaznfob is offline   Reply With Quote
Old 05-24-2017, 10:29 PM   #9
Jeff Lebowski
#1 Goaltender
 
Join Date: Nov 2015
Exp:
Default

If the alternative is sticking with something you hate...

This might give perspective. The wisdom of elders

http://www.nytimes.com/2011/11/29/op...eports-ii.html
Jeff Lebowski is offline   Reply With Quote
Old 05-24-2017, 10:36 PM   #10
Amethyst
First Line Centre
 
Join Date: Jul 2015
Location: Calgary
Exp:
Default

I would not buy a business based on those reasons. I would buy a business if I had an idea of what kind of business I wanted, how it would work, and had done research into the market. It sounds like you are making your decision based on hating your current job, envying a friend's lifestyle, and the fact that it would be "cool" to own a bar.

Friends I know who have started small businesses that became successful worked 24/7 for the first several years and made practically nothing. Any money coming in went right back into the business. Eventually they achieved success, but it takes a lot to get there and many don't succeed. They all had also worked in the business (or something closely related) prior to starting their own. Those who did not achieve success usually were inexperienced in that field or didn't have a solid plan in place before they started.

I also agree with the comment that I doubt your friend is willing to sell to you as a favour. He's willing to sell to you because it's in his best interests. Maybe he needs the cash and you can get a great deal out of his desperation. Or maybe the business is going downhill and he wants to get rid of it.

Of course, there are some people who take a crazy leap and come out successful in the end, but it's likely a risky move.
Amethyst is offline   Reply With Quote
Old 05-24-2017, 10:38 PM   #11
FlamesAddiction
Franchise Player
 
FlamesAddiction's Avatar
 
Join Date: Oct 2001
Location: Vancouver
Exp:
Default

I have a bit of experience in that I worked in the restaurant industry when going through university. This place is the 70%-30% for alcohol sales. The people going there aren't looking for Parisienne food. Most of the experience would come from my wife who was a manager and learned how to keep track of stock, schedule people and be a mega-bitch if she had to. (She told me to write that by the way).

Also, this place has been in business since 1986. The seller took it over in 2009 and improved it.
__________________
"A pessimist thinks things can't get any worse. An optimist knows they can."
FlamesAddiction is online now   Reply With Quote
Old 05-24-2017, 11:20 PM   #12
Northendzone
Franchise Player
 
Northendzone's Avatar
 
Join Date: Aug 2009
Exp:
Default

Has some with expertise reviewed the books and valued the business?

If the place has Ben in business that long that should be a good sign.

Can your marriage handle you working nights evenings?
__________________
If I do not come back avenge my death
Northendzone is offline   Reply With Quote
Old 05-24-2017, 11:33 PM   #13
powderjunkie
Franchise Player
 
Join Date: Dec 2011
Exp:
Default

Go all in Frank Reynolds style IASIP.


I've heard it said that there are 3 common ways wealthy people often get into trouble:

1. private air travel
2. boats
3. buying a restaurant

Obviously there are plenty of others...but those first two are not good financial company to be in.


It's great that you are thinking about making a change. Nowhere in your post did you really seem to address whether the actual work was something that you would want to do. It's good to analyze it in a dispassionate way, but you should really ask yourself if the passion will be there.
powderjunkie is offline   Reply With Quote
The Following User Says Thank You to powderjunkie For This Useful Post:
Old 05-25-2017, 01:39 AM   #14
trew
Crash and Bang Winger
 
trew's Avatar
 
Join Date: Aug 2004
Exp:
Default

If you were happy at your job, but had time to invest into a business, would you buy this business? (or is this just the best escape option right now?).

In terms of mitigating risk/fear/stress:

Would your friend consider some type of a option to purchase arrangement? (say with a six month time frame to manage it first). You could help your friend with the idiot bar manager situation, in the short term, while you figure out whether this is a good career change for you and your wife.

Lastly, have you looked into the lease situation of the business? Seems like one of the best ways to kill a bar/restaurant is to jack the rent or force it to move.
trew is offline   Reply With Quote
Old 05-25-2017, 03:00 AM   #15
Rutuu
First Line Centre
 
Join Date: Jul 2002
Exp:
Default

Quote:
Originally Posted by FlamesAddiction View Post
Hey all,

So after thinking about it for a long time, I have come to the conclusion that I hate my job and I hate my career. Everyday I go to work, I fantasize about quitting. Fortunately, I have been able to save up some money in the mean time. My background is in Earth Sciences (as is my wife's, although she has some restaurant management experience).

An acquaintance of mine is quite wealthy and owns 3 pubs (I think his net-worth is around $4.2 million). Two of the pubs have the same branding and he wants to sell the third to free up some cash to put into one of his other pubs (which is larger than all three combined) and to expand his franchises. Right now, the pub he is selling is a money maker, but it has some issues because he has been hands off for a while. His bar manager runs it and he says the guy is an idiot.

It nets about how much I make right now at my job, but I think there is room for growth. I am thinking of quitting my career and buying it. In no way do I expect it to be easy and I am sure that it will be a parade of putting out "fires" non-stop, but part of me really wants to have complete creative control over something like this. I have been reading books about it and plan on using the same format and bookkeeper.

Am I insane to do something like this? Can any offer me sincere words of encouragement or advice? I am scared, but I really want to do it. But I am also a crazy person...lol.
Love that it's an established business with upside.

Out of curiosity, how are you planning to finance the purchase?

I deal with a lot of micro, small, medium and large corporates. The good ones have a lot in common no matter what the size. Managing debt is key, but even more important is managing your cashflow.
Rutuu is offline   Reply With Quote
Old 05-25-2017, 04:01 AM   #16
OMG!WTF!
Franchise Player
 
Join Date: Oct 2014
Exp:
Default

I don't like that it's an established business. That just means you're paying more for something that could prove to be of little value later on. Customers will bail just because there's a new owner or something changed. Equipment can fail and is typically not reliable after time. And the decor will need to be updated at some point.

The people I know who make money at this pay very little for the business, negotiate a favorable lease, usually with some free rent up front and lease hold improvements included. Then they put their capital into new stuff and attracting customers and most of all, lower prices. You don't want to be behind the eight ball with a big cash out lay and then have no money to add your own value.

Then they sell it to people wanting a turn key operation. I also think in general you need an exit strategy. These businesses are the typical grass is always greener metaphor. Parts of it will make you want your old hassle free job back. These things aren't easy to sell.
OMG!WTF! is offline   Reply With Quote
Old 05-25-2017, 05:16 AM   #17
dissentowner
Franchise Player
 
dissentowner's Avatar
 
Join Date: Jul 2005
Location: SW Ontario
Exp:
Default

I used to own a bar, it is where my username comes from as the bar name was Dissent.
First off let me tell you that owning a bar is a ridiculous amount of work and stress unless you are going to pay somebody else to run it and you don't want to do that because it is extra money out of your pocket and you're going to need every penny! I don't know what the licensing is like in Alberta but if you were to do it in Ontario you will need a liquor licence as well as a business licence and a damn good lawyer on retainer. You will have a million things to juggle just as a bar, as a pub that serves food you can double that. You have staff to look after and the type of people that work at a bar/pub is usually a student who might be more down with partying or hooking up than doing their job. You have to keep track of all your inventory so you don't run short and you absolutely have to remember long weekends and holidays or you are going to run out of product fast. You have to walk that fine line of spending on your staff, your products, your entertainment, etc.. and what you have left to put back into the business. I had my bar for three years and in the first two years I drew absolutely no salary for myself because I couldn't do it and stay afloat. Now maybe you can and maybe that pub really is a money maker, my bar was an alternative bar so I had a much more focused clientele. Regardless, I can tell you owning a bar is a 24/7 stress machine and there is always something to be done. Somehow people get it in their minds that a bar owner just hangs out at his bar and socializes, unless you are a money tycoon that can afford to pay extra people to run your establishment that is not how it works.
dissentowner is offline   Reply With Quote
The Following User Says Thank You to dissentowner For This Useful Post:
Old 05-25-2017, 05:19 AM   #18
Snuffleupagus
Franchise Player
 
Snuffleupagus's Avatar
 
Join Date: Sep 2016
Exp:
Default

Quote:
Originally Posted by DuffMan View Post
Owning a bar would be awesome
Depends if you like babysitting, it's not all roses.

As for FA's advice needed, be very careful, if it's a neighborhood pub do some scouting, has one or more new pubs opened in the last 2 years close by? go to a close gas station or grocery store and just ask some random people where's a good pub around here? also, this "acquaintance" of yours needs to go on a no-trust list until everything checks out and make sure you have a lawyer triple check the lease, business name and any hidden outstanding dept.

To be completely honest though I don't like smell of this gentleman's reason for selling and I have a hard time believing he's "hands off", successful bar owners are never hands off.

I also have yet to see a pub be more successful after being sold, good pubs are personal with regular clients and it doesn't take much to have them move on. you're better off building and opening a new pub, If you have the $$$ to buy a pub you certainly have $$$ to open one from scratch. It sounds like a lot of work but for half the price of buying it's worth it.
Snuffleupagus is offline   Reply With Quote
Old 05-25-2017, 05:21 AM   #19
driveway
A Fiddler Crab
 
driveway's Avatar
 
Join Date: Jan 2007
Location: Taipei, Taiwan
Exp:
Default

Used to manage restaurants and bars in Calgary.

DO NOT DO THIS.

It is a terrible idea, will not make you money, and will most likely destroy your marriage.

It sucks that you hate your career, but getting into the bar/restaurant industry is a god awful idea.
driveway is offline   Reply With Quote
The Following 8 Users Say Thank You to driveway For This Useful Post:
Old 05-25-2017, 05:45 AM   #20
Snuffleupagus
Franchise Player
 
Snuffleupagus's Avatar
 
Join Date: Sep 2016
Exp:
Default

Quote:
Originally Posted by driveway View Post
Used to manage restaurants and bars in Calgary.

DO NOT DO THIS.

It is a terrible idea, will not make you money, and will most likely destroy your marriage.

It sucks that you hate your career, but getting into the bar/restaurant industry is a god awful idea.
I won't comment on the marriage but the bolded is not true, if you have a decent place with the right system you can put a couple hundred grand in your jeans tax free every year off the books. There is great money in selling booze and food. A properly run pub with a good lease should profit 32-36% of sales, a good system shows a profit of 20% on the books and the rest is for the stress.

P.S. I don't answer PM's from CP members working for revenue canada
Snuffleupagus is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -6. The time now is 11:51 PM.

Calgary Flames
2023-24




Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2024, Jelsoft Enterprises Ltd.
Copyright Calgarypuck 2021