If you are reading this, then it’s possible that you are thinking about buying a bar. If you purchase an attractive bar that you’ve had your eye on at the right price, then you’ve won big time. But if the transaction doesn’t go through as planned or there are nuances you hadn’t considered, then you could lose as well. A sports bar that is already in existence can have benefits over launching a new bar from scratch. A bar that is established has customers, a reputation, and sales with a group of sports fans you can build upon. As a buying a bar lawyer from Silverman Law Office, PLLC explains, before making a purchase, be sure to consider these tips for success.
#1 Create a Business Plan
The sports bar owner is probably going to create a presentation package to sell the bar. It is important for you to have a business plan for your own goals of the bar and its future. Your plan should include your ideas for the sports bar, which may or may not be the current theme. For example, the bar now may appeal primarily to long-term and older sports fanatics, while you want to establish a bar that is trendy and upscale. You may want to consider the pros and cons of either keeping the bar at its same style or integrating your own concept for aesthetics.
#2 Do Your Diligence
The owner who currently owns the bar will be presenting their property in the best light that they can, so they can get the price they are hoping for. Look over financial statements carefully, and see if they compare to standards for the bar industry. For instance, the cost of food should be between 25-30%, and the cost of beverages should be between 20-30%. If the costs are greatly different than that, identify why this could be happening. Assess accounts payable to see if there are any signs that the bar is not paying their bills due to financial struggles. The more information you find out about the bar regarding its finances and operations, the better position you are in to negotiate.
#3 Negotiate a Deal
Your goal is to purchase the bar for the least cost, and the owner wants to maximize their proceeds. You may want to find out why the owner wants to sell, which can help you during the negotiation stage. One approach you can do is agree to a higher price in exchange for the owner getting part of the remaining payment over a payment period, which requires them to lend you some money in order to buy them out. But before you finalize any deal, be sure to loop in your lawyer to confirm the contract and deal is in your best interests.