Looking for Bars for Sale?

Bars for Sale!  Just like restaurants Bars are some of the most popular types of established businesses that people want - a good, well-run bar is usually a cash cow.  People will always need a place to socialize, have a drink and grab a bite to eat.  Bars are a fundamental business that everyone patronizes.

The bar industry is made up different types of establishments:  Neighborhood bars, Pool Halls, sports bars, night clubs, cocktail bars, beer taverns and so on.  

The SIC Code for Bars is 5813-01 and the NAIC Code is 722410.

Bars are well favored as cash businesses with high margins.  Relavtively low cost of labor due to tips help out tremendously and have a limited product line that doesn't spoil is an attractive factor as well.

Rules of Thumb for Pricing and Valuing Bars for Sale:
  1. 40 to 50 percent of annuals sales plus inventory.
  2. 2 to 3 times Cash Flow, or Seller's Discretionary Earnings plus Inventory

Other things to keep in mind when buying and selling a bar:

Rent - rent is a key factor when determining the value of a restaurant. 5-10% of annual sales is a commonly agreed upon guildeline for average rent.  If the rent is higher or lower than 5% it could affect the price of the business and higher than 10% will definitely affect the price of the business.

Cost of Goods - COG's can be a factor affecting the price of your business.  25 - 30% is the expected range on alcohol and about 28% - 35% on food.  

Payroll - Payroll and labor is an important factor of running this type of business.  In the neighborhood of 25% is common for a bar, which is lower to their restaurant counterparts.

Equipment - the condition of equipment is an important factor.  If the new owner is going to have to start replacing equipment soon after taking over this is going to obviously affect value.

Source:  Business Reference Guide - Business Brokerage Press



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