aspendelic

Failure Issues and Success Factors


Issues
- Financially. It's a mugs game.
- Most expat bars lose money
- Even fewer repay capital and lease holders full labour hours, at market rates
- There are too many bars in Tourist areas
- Demand for bar leases is higher than their business worth (you should actually be paid a premium to take up paying a lease!)
- Bar real estate owners churn leases and usually make min 10% of lease cost on each failure, hence are immune to oversupply.
- Many bars do not even recover marginal costs on each item sold, let alone provide full contribution to fixed costs.
- The majority of lease holders do not speak Spanish
- Hours worked are excessive.
- Many bars are not fully registered and compliant with the law
- Prices are too low and cannot be raised industry wise or demand will fall
- Price is elastic. Ie changes in price have a relatively large effect on the quantity of a good demanded.
- Time is not costed (you will be the only one not going to the beach)
- The business model is limited by people proximity and charging by drink or food, not time. Changing that has never been done. Yet.


Success Factors
- If you don't have the money to lose, then just get a bar job.

If you do have the money: -
- Design and fix the process (flow diagram)
- Write an electronic plan with milestones
- Monitor the plan every day
- Don't believe you are different! Everyone does.
- If you're not a people person or shy, forget it.
- If you have health issues, forget it.
- If you have drink or drugs issues, forget it.
- Work in a bar nearby at least two months
- Location!
- Don't waste time on silly names and refits
- Go either where you have a monopoly or are are central to a strip
- Competition can sometimes be good
- Learn Spanish first, it's the least difficult language (including English)
- Ensure you are Big enough and have a music license
- Don't buy empty bars
- Ignore figures you are given
- Copy success dont clone failure
- Be different but check changes work
- Keep trying new stuff
- Don't get lazy.
- Work co-operatively (marketing, supply deals, buying, facilities, entertainment, security, advice, staffing, opening hours, technology sharing, whatever)
- Undertake proper market research
- Be cheeky. Talk to everyone, neighbours, customers, anyone.
- Employ someone with multi languages
- Cater for Northern Europeans, Japanese and Americans
- Write off thought of capital return
- Be willing to accept capital depreciation
- Think about the supply chain options rather than retail
- Tourist bar market is finite sum (you alone can't invent tourists)
- You only make money by moving it from other equally desperate bar owners. Cruel world.
- Focus on lifestyle and weather benefits
- People attract people. Arrange for the bar to look busy.
- Be the first bar in the World that never makes a customer wait (customers hate to wait). The only job that bars should be good at ie Getting what you want and Paying, is their worst.
- Employ staff rather than working yourself. If you can't pay someone, you shouldn't be doing it.
- Never compete on price but always give the best value (ie give more not charge less)
- Game changer idea's fail even more often. Shame but that's customers, they follow not lead.
- Game changer idea's may be great but too early or too small (ie you can't have just one starbucks)


There is one major proviso. That is, you are running a life, not a business.

Sometimes you just have to do it. Stuff the cost.

All other Issues and Success factors gratefully received.

Aspendelic

jimenato

Pretty good.

Only one thing jumps out at me:

Some bars can be run quite well by just a hard-working couple. Employing people costs an awful lot of money.

steviedeluxe

I find this comment interesting
One reason I like the cafe-bars in places like Madrid is the way you get extremely fast service, assuming you know the etiquette (Hola! Muy buenos dias - Un cortado y un "con leche", ! Cuando puedas...) On the other hand it can take longer to get the bill paid.
I suppose that getting served takes longer now, especially in Brit pubs, because there are so many more options (and different ways of paying). The days when a place would only sell a couple of beers, gin, whisky and rum, are long gone in most places. Very hard to get served quickly in Wetherspoons as there are so many different things on offer - yet they remain popular because of low prices. The likes of Starbucks have higher prices, yet are still fashionable.

Domino

very well thought out, would you like to try,,,,,

• don't invite friends/relatives out to visit
• don't drink the profits
• don't play with the customers
• give up golf, chess or anyother games you used to play
• become a hermit and only come out at night
• play the music your customers like not what you like
• rapidly grow a thick skin and don't lose your temper
  

Dick Dasterdly

To the to do list I would add,....
Always make an effort to give punters a warm welcome the moment they walk through the door.

From the don't list I would remove, "never buy an empty bar".
By far the biggest success stories I saw in Tenerife came from previously empty bars,....both big and small.
I don't say it's a must do either,... but certainly don't rule it out.

jimenato

Just eyed the list again:

So true.

Lynn R

Some 'don'ts gleaned from observing one British couple who managed to go bust within a year running a bar where I live:-

- stick to your advertised opening hours, do not turn up half an hour after your posted opening time or close an hour early because there are no customers
- don't employ someone to work in the bar at nights because you're not willing to put the hours in yourself, and give them strict instructions to close at midnight on Fridays when the smallish 'expat' community in town comes in for a get together and a table of at least 12 people, many drinking spirits, has to be asked to leave as the bar staff have to close up
- when you are actually working during the day, don't sit on the 'wrong' side of the bar reading a newspaper or magazine, and all but tut and sigh if a customer comes in and disturbs you
- don't leave your 16 year old daughter in charge of the bar as she is wont to turn customers away because she 'isn't prepared to cook for 6 people' (and we're talking burgers and chips here, not cordon bleu).

bob_bob

Interesting, what is the OP doing, NVQ in business studies or something?

One thing that is vital to running a bar is personality, you need a personality that is popular with customers, certainly in smaller bars and being 'right' for the job cannot be taught, or 'factored' in.

lynnxa

agreed

& I suspect you could be right about the NVQ or whatever...............

Adventures2012

Why do you say most expat bars lose money? Are you talking about Spain in general or a specific city/area?

Lenox

Having drank my way through 45 years worth of expat bars in Spain (hic!), I have to agree with all of the above.
Personally - I don't like a TV (I can watch it at home) or a 'sports bar' (having had sand kicked in my face quite enough times, thank you).
To my mind, the worst thing a bar or restaurant can do is be closed when a customer arrives expecting it to be open (even when he's got the day wrong).
He won't come back.

jackytoo

Needs more than personality to run a successful bar in Spain especially on the costas where there are another 50 within walking distance and hardly any punters

Dick Dasterdly

Whilst I agree with 98% of what has been said, it is not entirely mission impossible and I have seen one or two major successes involving guys with previous experience who not only gave the public exactly what they wanted, but only needed to open for about 6 hours each evening, and in no time at all did littke more than supervise as the profits rolled in big-time.

Having said that I would stongly advise those with no previous experience at all to completely forget the idea.

HBG

Having considerable experience in the general field, as well as using them on a social basis, I would estimate the failure rate of Brit bars in Spain at something like 95 percent. Most of the reasons have already been discussed.

In my area, bouncing with expats, the only 'Brit bars' operating successfully are a large fish and chip operation and a large entertainment venue, the other hundreds have all failed and will continue to fail.

But it's a British dream, running a bar in the sun, and there's nothing wrong with it if you've got 50 grand to lose. It's often a fresh change in life, a broken marriage and a new and younger version to relight the fires. I've seen it so many times, it's unbelievable (and I must admit I sometimes feel envious, a young lady in a mini skirt and an older man with his tongue hanging out). Or even other way round.

Let's face it, you can't take it with you.

jojojojojo

But the sorrow, heart ache and sense of failure when that dream turns into a nightmare. spoil the whole thing! and you're left with nothing! its all gone. No dream is worth that, especially when its so easily avoidable. you have to get real cos dreams dont make good reality do they!

Jo xxx