Thinking of Buying a Bar? Then Think Carefully!!
One of the saddest memories I have of my life in Spain comes from a chance meeting with a happy couple and their lovely teenage daughter in Malaga airport. Their flight had delivered them to the wrong terminal and they needed directions to meet an estate agent. They showed me a piece of paper saying where their meeting place was and I gave them directions. It also said who they were meeting. Are you buying a bar I asked. Oh yes they replied, so excited they couldn’t stand still. Then be very, very, careful I said. They didn’t really care or take on board my warning and bounced off to their meeting and to their destiny.
So why are bars so often such a bad deal?
We rarely offer bars and when we do they tend to be freehold and away from the costa. Being away from the costa may seem counter intuitive but in reality a good village or shopping center location often works best. Less competition and regular all year round trade. In other words viable, realistic businesses offering a real chance to earn a living in the sun.
+44 208 144 5525
Email: bill.tickle@tickle-international-property.com
One of the saddest memories I have of my life in Spain comes from a chance meeting with a happy couple and their lovely teenage daughter in Malaga airport. Their flight had delivered them to the wrong terminal and they needed directions to meet an estate agent. They showed me a piece of paper saying where their meeting place was and I gave them directions. It also said who they were meeting. Are you buying a bar I asked. Oh yes they replied, so excited they couldn’t stand still. Then be very, very, careful I said. They didn’t really care or take on board my warning and bounced off to their meeting and to their destiny.
To this day I feel guilt about not trying to put them off. The statistical reality is that their money would be gone, their lives ruined and the family shattered in months. The normal rule is that 70% of bar buyers are broke within 2 years but on the route this family were taking the odds were much worse and the timescale shorter.
Why didn’t I tell them? Well, as the agent in question always said “If I don’t sell them what they want (sic) someone else will”! Unfortunately in cases like this the people being helped invariably hate the helper and disbelieve what you say because you are sticking a great big pin in the bubble of their dreams.
So why are bars so often such a bad deal?
There is no trade; when the punter visits they get rent a crowd in or you show the place on a busy day (Fuengirola port is busy on market day and out of sight the rest of the week for example). It’s not unknown for bars to be opened for the showing and closed when the punter goes home.
Hidden costs; you are told the rent for the bar but they omit to mention the equally large terrace rent payable to the town hall.
Competition; the bar down the road has been in the same ownership for donkey’s years. They own the freehold so there is no rent to pay and have great deals with suppliers. He can sell beer for less than you can buy it for from the wholesaler!
Inexperience; anyone entering a very competitive business with no training or experience has to be crazy and certainly has no future but that doesn’t stop people doing it all the time.
We rarely offer bars and when we do they tend to be freehold and away from the costa. Being away from the costa may seem counter intuitive but in reality a good village or shopping center location often works best. Less competition and regular all year round trade. In other words viable, realistic businesses offering a real chance to earn a living in the sun.
Finally we always sell business premises on a bricks and mortar basis; there is no element of good will in the price. Why? Because so much business in Spain is for cash that accounts are rarely worth the paper they are written on. If someone has accounts, particularly accounts that show lots of profit, treat them with great suspicion. In other words run a mile! You can get anything printed on the Costa del Sol.
This may sound like I am trying to put you off but not a bit of it. There are good bars and restaurants and there are plenty of alternative businesses. You just need to remember not be part of the crowds that leave their brains at the airport!
To find out more about buying a business or to discuss your options, please get in touch!
+44 208 144 5525
+598 424 80 563
Skype; tickle.tip
Email: bill.tickle@tickle-international-property.com
Great information. Too many people come to Spain with dreams and not a lot else. Excellent.
ReplyDeleteI agree with that as well. Propert information is essential to anyone puchasing properties, not just in Spain but anywhere.
DeleteI got taught a bloody lesson when I found out my doicuments were not up to scratch. It pays to take your time and get the right people to represent you. A good article this Bill.
DeleteHear! Hear! You would be suprised how many people think it is so easy to just turn up, open the doors and people will flood in and there won't be a care in the world. Well written advice Bill.
ReplyDeleteWell said Bill.
DeleteI know a few people who wished they had been given the right advice before they put their money in the wrong business. I think programmes like "Place in the Sun" have a lot to answer for. Get the right info before you spend any money, thats the same advice I would give as well.
ReplyDeleteWe were lucky, we were well advised when we bought our place but I know quite a few people who just saw Euro signs in their eyes, a bright shiney bar and illusions of thousands of regular customers. It's so easy to just follow a dream and have all the hope in the world but that won't get cleints wre there are none. Get clued up and you won't get let down.
ReplyDelete