Everyone will go to a bar or pub eventually. If you are a sports fan, it’s very likely you’ll go to a sports bar watch that football or baseball game as well.
Happy hours, friends meeting, birthday parties, romantic dates, all these special occasions usually happen in bars or pubs.
In order to service that demand, there are a lot of bars, pubs and sport bars. You actually can find one in every block, especially if you live in a big city. That usually means two very different things: first, you’ll always have customers and second, the competition is huge.
So when it comes to buying or starting a bar, pub or sports bar, you have to prepared for all the money you’ll probably have to spend — or invest, better saying. But if you already own a business like that and want to sell it for any particular reason, you may have a gold mine in hands.
Of course you actually don’t know that yet. “But how am I supposed to know”, you might be asking. It’s very simple: get to know exactly what your bar, pub or sports bar is really worth.
What is your Bar business worth?
If you don’t know how to value your business yet, don’t worry. The very first thing you have to do is compile all financial data you can find regarding the past three to five years.
The point of doing that is gathering all finance information potential buyers need to show their interest in closing the deal.
And as it is a very competitive business, you better know how the other bars, pubs or sports bar are working around you.
In order to discover exactly what your business is worth, make sure you have all the information below:
- What are the sales?
- What is the profit?
- What are the growth trends?
- What is driving new sales and is that sustainable?
- What channels do new customers come from and what is the breakdown of each channel?
- What is your market position?
- Is your Location favorable?
- How reliant is the business on the owner?
- What systems and processes are in place to run the business?
What makes a Bar, Pub or Sports Bar worth more?
A very pleasant and comfortable environment, with a nice decoration, as well as a good reputation are some very important differentials that can make your business worth even more.
Location is another one. If your bar is well located, and especially if there is not much competition around you, you’ll probably gain one or two more points with potential buyers.
Of course it’s not all. Take a look at the following metrics:
- Predictable key drivers of new sales
- Stable or growing traffic from diversified sources
- Established suppliers of inventory with backup suppliers in place
- Traffic stats
- High percentage of repeat visitors and repeat sales
- Clean legal history
- Brand with trademark, copyright or legal concerns
- Documented systems and processes
- Growth potential
What does the average Bar business sell for?
There has been more than 1.500 bars, pubs and sports bars sold in the past 10 years, which show how popular the business is.
And average sales price, set in $305k, shows how expensive and profitable it can also be. And if you take a look at the total transaction value, you’ll see that more than $470 million were negotiated in the past decade.
Average multiple of 5.63 also shows how profitable bars, pubs and sports bar can be, meaning that average asking price is more than five times bigger than total gross income.
What is the most frequent deal size?
The most frequent deal size is $150k, lower than average sales price. But why does it happen?
If you take a look at the chart, you’ll notice that most of the bars, pubs and sports bars that have been sold in the past years were negotiated for less than $250k.
The higher the deal size, more difficult it is to sell.
Is the Bar business market getting bigger?
As like most of markets in the United States, the bars, pubs and sports bars market has its ups and downs.
In 2015, total transaction value was up to $30,5 million. In 2014, it was more than $40 million. In 2013, a little bit lower: $39 million, and in 2012, $60 million.
For now, it’s not possible to predict if 2016 numbers will be better than last years, but that’s the expectation.
Are bigger businesses worth more?
In general, the bigger the business, the higher the multiple. That’s the case for bars, pubs and sport bars, but with few exceptions.
In 2015, $1-2 million deal size is higher than $2-10 million. In 2014, $500k-1 million deal size is also higher than $1-2 million.
What states have the most business deals?
Are you wondering where the most deals were made throughout the country, or if your state has a hot market to sell fast? As you can see if you are located in California or Florida, you may get a lot more offers than if you are in Oklahoma or Vermont. But the best state to sell your bar, pub or sports bar is Texas by far.
sometimes you can overcome the low number of deals with investors or competitors looking to enter a specific new area, and get lucky with an offer.
Why would you sell in the first place?
The reason to sell always varies from each person. Maybe you are looking for new challenges, businesses and opportunities, or you just want to enjoy your family and retire. Although it can seem tempting to get your hard worked cash, make sure that you are clear on the motives so you don’t regret afterwards.
How long will it take to sell your Bar business?
If you have read all the necessary steps to understand your valuation, and think you have focused on all the topics that make your company worth more, it is maybe time to start the process. Selling your business is a long-term process, and doesn’t happen overnight. Usually companies sell in 12 months, but you can also see deals getting closed in 6 to 9 months depending on the opportunity.
What is the process of selling your Bar business?
This step by step process will help you get less confused when you make sure you are ready and confident to let go of your business, and perform a nice and positive sell. Many entrepreneurs forget about a step, or just don’t have the right guidance to know all the stages necessary and get lost through the process. Don’t forget to go through all of these, and if you have any questions, comment at the end of the article or contact us for more help.
Who will buy your business?
If you are wondering about the buyers that can be interested in your Bars, Pubs or Sports Bars, don’t worry, there are many options and possibilities. From First Time entrepreneurs, to businessmen interested in new opportunities, the chances are that in the bars and pubs industry it may likely be a person who already had a store in the field.
There has been more than 1.500 bars, pubs and sports bars sold in the United States over the past ten years. Businesses like that are also very expensive and profitable, but we can’t say one year is better than the other.
If you want to start accelerating your buyout process, fill out our free valuation form and get your business valued today! Leave your comments on any doubts or feedback, we are glad to hear your thoughts!