NOW is the time to Open a Billiard Room

[doitforthegame]

You better have cash to pay for all of your equipment, because no banks are making loans to open pool halls right now...

Mr Hoppe- I do equipment financing and leasing. We can do start-up business's, including pool rooms (restaurants, and any other commercial business). I do new and used equipment. So, they can be done. Not an SBA loan, but most can be done with NO money down. One caveat, you got to have reasonable credit.

Bob Campbell

 

[Tbeaux]

I agree, now is the time....Funny thing is, I had been looking at places to lease for about 3 months before I realized why "people" kept renting the good ones. When the real estate person asked me what I was planning on opening I would say, "a pool hall/ arcade." Oops...Can you tell me why?

They thought that I like so many of the other pool halls, would be a front for some mom and pop gambling shop.

Take my advise when talking to the real estate guy don't mention pool hall or arcade games..I missed two good locations because of that.

No actually you do need to say something. Read Mikepage post above. He did everthing right. Monica Webb and Helena had to jump through the hoops also. You have to reassure the local community leaders that the place is NOT going to become a biker hangout or where "Louie da Loanshark" hangs his hat. :wink:

 

[cuesmith]

I agree, now is the time....Funny thing is, I had been looking at places to lease for about 3 months before I realized why "people" kept renting the good ones. When the real estate person asked me what I was planning on opening I would say, "a pool hall/ arcade." Oops...Can you tell me why?

They thought that I like so many of the other pool halls, would be a front for some mom and pop gambling shop.

Take my advise when talking to the real estate guy don't mention pool hall or arcade games..I missed two good locations because of that.

First off, Jamison, you won't get any farther with the real estate guy if you don't tell him your plans. Believe me they want and need to know what kind of business you're

intending to open. Having owned 2 poolrooms and a couple of pool bars over the years, I've been through all of this myself. Yes, most of the really good real estate will turn

their backs on anyone wanting to open a poolroom. Frankly, from strictly business standpoint, I can't blame them. They do market research and it's no secret that poolrooms

are closing all over the country at an alarming rate. Opening a poolroom is like buying a job, only worse. You'll have long hours and poor pay. Everyone who comes in will

give you their ideas on how to make it better and most of them involve having free pool on certain days or times, free food & drinks and a host of other things that involve

you giving away some of your very limited profits. Anyone who believes the old addage "The customer is always right" hasn't ever tried to make a living in a poolroom. For

the most part, poolplayers are the cheapest group of consumers I've ever encountered. Sure there are some exceptions to that rule, but just watch your customers quit

coming in because you had to raise your table time a quarter an hour and you'll see what I mean!

There are bargains on equipment now for sure, but there's a good reason for that! The last proprietor using the equipment has lost his ass and is trying to salvage whatever

he can! The only way I can see of someone really making a go of it now is if he owned the property outright and had enough cash reserves to weather the storms. The nut in

running a poolroom is very strong. Pool tables take up a lot of space. There are so many other endeavors where someone could use that space for a much higher return on his

investment, that it's a pretty foolhardy gamble to open a poolroom in todays marketplace! I love the sport and don't like stating these facts, but they are facts, not

suppositions. I've owned poolrooms and actually had some success at it but that was before the Poker boom, the internet and before the nintendo craze! I don't think I'd

open a poolroom these days if someone gave me the equipment and free rent! It's just too tough of a business these days! I really hate to throw a wet blanket on anyones

dream of owning a poolroom, but I'm being realistic. 3 out of 4 small businesses that open fail and most of them have a much better shot than a poolroom. I know I'll get

flamed by this post, but if it saves just one person from losing his life savings, it'll be worth it! Been there, done that, and at a time when pool was booming. Now it's really

in the shitter!

 

[doitforthegame]

Anyone that is planning to open a pool room right now should really read Sherm's post carefully. He lays out very accurately in my opinion some of the obstacles that you can expect. Hate to tell you, but those are only a few of the obstacles. Really, it is a tough tough business. And anyone that thinks that opening "a pool room for pool players. No jukebox or tv. Just for the serious players." is a good idea....well, what would be the politically correct way of saying "check yourself into the insane asylum!"

Bob

 

[Spimp13]

First off, Jamison, you won't get any farther with the real estate guy if you don't tell him your plans. Believe me they want and need to know what kind of business you're

intending to open. Having owned 2 poolrooms and a couple of pool bars over the years, I've been through all of this myself. Yes, most of the really good real estate will turn

their backs on anyone wanting to open a poolroom. Frankly, from strictly business standpoint, I can't blame them. They do market research and it's no secret that poolrooms

are closing all over the country at an alarming rate. Opening a poolroom is like buying a job, only worse. You'll have long hours and poor pay. Everyone who comes in will

give you their ideas on how to make it better and most of them involve having free pool on certain days or times, free food & drinks and a host of other things that involve

you giving away some of your very limited profits. Anyone who believes the old addage "The customer is always right" hasn't ever tried to make a living in a poolroom. For

the most part, poolplayers are the cheapest group of consumers I've ever encountered. Sure there are some exceptions to that rule, but just watch your customers quit

coming in because you had to raise your table time a quarter an hour and you'll see what I mean!

There are bargains on equipment now for sure, but there's a good reason for that! The last proprietor using the equipment has lost his ass and is trying to salvage whatever

he can! The only way I can see of someone really making a go of it now is if he owned the property outright and had enough cash reserves to weather the storms. The nut in

running a poolroom is very strong. Pool tables take up a lot of space. There are so many other endeavors where someone could use that space for a much higher return on his

investment, that it's a pretty foolhardy gamble to open a poolroom in todays marketplace! I love the sport and don't like stating these facts, but they are facts, not

suppositions. I've owned poolrooms and actually had some success at it but that was before the Poker boom, the internet and before the nintendo craze! I don't think I'd

open a poolroom these days if someone gave me the equipment and free rent! It's just too tough of a business these days! I really hate to throw a wet blanket on anyones

dream of owning a poolroom, but I'm being realistic. 3 out of 4 small businesses that open fail and most of them have a much better shot than a poolroom. I know I'll get

flamed by this post, but if it saves just one person from losing his life savings, it'll be worth it! Been there, done that, and at a time when pool was booming. Now it's really

in the shitter!

Great post Sherm. When I was in college majoring in Business Management at Northwest Missouri State I took a business class which was one of the best classes I had in college. One of our projects consisted of a guy in Maryville, MO looking to start a new business and he wanted ideas. He had a location he was looking at. He wanted some ideas from the college students since it is a big college campus town. Our class split into three teams and each team came up with 2 ideas and made a real business plan for each one. I voted for a pool hall for one of our ideas (duh). When it was all said and done there is a ton of things to examine and think about when starting a new business that people may not be aware of. The people on here who started from scratch opening up a new pool hall, or even the ones who bought a pool hall know what I mean....especially in today's economy. I could go into detail more from our business plan of all the things involved but I don't want to turn people away from the idea...just be very smart how you go about it, and do your research while being as thorough as possible....oh and P.S. OVERESTIMATE THE COST TO START THE BUSINESS AS WELL AS TO RUN IT FROM MONTH TO MONTH FOR AT LEAST 1 YEAR IF NOT LONGER.

 

[upprc04]

delete delete

 

[Fatboy]

161 bars closed in the past 6 month is Vegas, that's all? I would expect that a lot would be closing because everyone is staying home and NOT GOING TO VEGAS.

Vegas only has about 600,000 residents and well over 2,000 (estimate) bars in it. That's only 300 people per bar. They should be closer to about 200 bars tops with an average of 3,000 people per bar.

Maybe, um, that's why they are closing left and right.

the population of Vegas was 600,000 over 20 years ago, I remember when it hit a million. then almost 2,000,000. I dont know what it is now 1.8???


I know several guys with businesses with poker machines in them, they were down 30% now its closer to 50% last time I asked. Vegas is dead-i'm getting the heck out of here.


I have the right biz model to open a very profitable pool room, proibably net $500K-$700K depending on a few factors. The reason I wont do it is thats not enought $$$ for my time first and foremost. And a close second is when you own a pool room you are a shop keeper-You have to be there, and it uses up all your time. Those two factors are not in my play book of life. Granted I havent made a penny in the past 27 months but when I do I will get my price I set for my time and have the freedom to do what I want. Last biz I had I worked 6-7 days a week in spots but all from a phone/computer. I dont like to be tied down to one spot-been there done that, never again.


But back to the topic-this is the absolute time to open a room. Buying a building is the only way to do it. And they are a bit looser with lending to owner operators of buildings. Five years ago it was the oppisite we owned 6 buildings here in Vegas and couldnt borrow a million(just a few % of the value of the portifoilo) against any of our buildings, cross collatorization nothing. Now its 180 the oppsite if your going to use 100% of the building the loans are easier to fund, if you want to use 50% its harder to get a loan.


Opening a room on a lease is a ticking time bomb for something bad to happen. I been down that road too,. Landlords suck, want to make a change in the configuration of the interior of the building like adding a small office you have to get their permission-its not like renting a house, the commercial world is a different enviroment. When you own all you need is a building permit to build out the small office-or just do it and hope you dont get caught-when you do it is a building code pain in the ass, and those are simple to fix


best

EP

 

[mnorwood]

I have to agree with the original post. I know a room owner that got his first 6 months free. Around the Houston area there are retail spaces that have been vacant for years. I have driven by old grocery stores that have been closed for many years. Commercial property is a buyers market. Property owners are hurting around here. The trick is getting people in to your room.

 

[Spyral7]

the population of Vegas was 600,000 over 20 years ago, I remember when it hit a million. then almost 2,000,000. I dont know what it is now 1.8???


I know several guys with businesses with poker machines in them, they were down 30% now its closer to 50% last time I asked. Vegas is dead-i'm getting the heck out of here.


I have the right biz model to open a very profitable pool room, proibably net $500K-$700K depending on a few factors. The reason I wont do it is thats not enought $$$ for my time first and foremost.

EP

Wow. I can say that would be more than worth my time. I work those hours as it is...6-7 days a weekend 10-12 hours, and my return isn't nearly that, but then, that's what you get for working for someone else. (this is in no way negative toward you fatboy, I can only hope my time be worth half that one day, and I simply mean half of what that hall could net,)

It is what it is, but if I had the money, I would be trying to do something to make my own business.

On the OP, i believe it is a good time to start a business as long as you are capable of buying the property, as that cuts the land owner out of the picture.

 

[cuesmith]

the population of Vegas was 600,000 over 20 years ago, I remember when it hit a million. then almost 2,000,000. I dont know what it is now 1.8???


I know several guys with businesses with poker machines in them, they were down 30% now its closer to 50% last time I asked. Vegas is dead-i'm getting the heck out of here.


I have the right biz model to open a very profitable pool room, proibably net $500K-$700K depending on a few factors. The reason I wont do it is thats not enought $$$ for my time first and foremost. And a close second is when you own a pool room you are a shop keeper-You have to be there, and it uses up all your time. Those two factors are not in my play book of life. Granted I havent made a penny in the past 27 months but when I do I will get my price I set for my time and have the freedom to do what I want. Last biz I had I worked 6-7 days a week in spots but all from a phone/computer. I dont like to be tied down to one spot-been there done that, never again.


But back to the topic-this is the absolute time to open a room. Buying a building is the only way to do it. And they are a bit looser with lending to owner operators of buildings. Five years ago it was the oppisite we owned 6 buildings here in Vegas and couldnt borrow a million(just a few % of the value of the portifoilo) against any of our buildings, cross collatorization nothing. Now its 180 the oppsite if your going to use 100% of the building the loans are easier to fund, if you want to use 50% its harder to get a loan.


Opening a room on a lease is a ticking time bomb for something bad to happen. I been down that road too,. Landlords suck, want to make a change in the configuration of the interior of the building like adding a small office you have to get their permission-its not like renting a house, the commercial world is a different enviroment. When you own all you need is a building permit to build out the small office-or just do it and hope you dont get caught-when you do it is a building code pain in the ass, and those are simple to fix


best

EP

Eric, I gotta ask. What kind of an investment do you think you'd have to come up with to make your "Biz Model" net $500-$700K ? Frankly I can't see it unless you bought the property and built a pretty lavish set-up. Maybe that is what you mean by it not being worth your time? I'm not saying it couldn't be done, but I think if you had the resources necessary to make that work, it would be a pretty bad business move. JMHO, and I'm interested in yours?

 

[hdgis1]

GRADUATED RENT, once you have found the amount of FREE rent you are looking for consider asking for graduated rent. Example, $2K for the next 6 months after the FREE rent, Then $2,500 for the next 12mos then $3,000 per month for the remainder of the lease.. The graduated rent will give you more money to get the things done in the location you want to do. Spend the savings on improvements as they will pay off in the long run.

Ooops, I ran out of time. Good luck in your hunt.

Remember, NOW IS THE TIME !

Isn't this exactly the concept that has gotten us smack in the middle of the housing crisis we are in now? Banking on how you think you might be doing in the future just isn't a good idea.

Chris

 

[geno]

the population of Vegas was 600,000 over 20 years ago, I remember when it hit a million. then almost 2,000,000. I dont know what it is now 1.8???
EP

Fatboy, you need to lay off the pain meds for your back. You are not only seeing double, you are seeing Quadruple.

The #'s I gave are for the city of Vegas only not the entire Metro area. Below are the stats for Vegas Only.

Clark County
Population in July 2009: 567,641. Population change since 2000: +18.6%

Read more: http://www.city-data.com/city/Las-Vegas-Nevada.html#ixzz0xZduIdiV
---------------------------------------------------------
From: City of Las Vegas
http://www.lasvegasnevada.gov/FactsStatistics/census_data.htm

City of Las Vegas: Serving You Online Rather Than In Line
The following U.S. Census Bureau ( 2006 - 2008 American Community Survey)information includes statistics for the city of Las Vegas only and does not include statistics for unincorporated Clark County .

Total population 564,484

--------------------------------------------------------------------

Las Vegas Fact

POPULATION

City of Las Vegas -- 478,434

Source: U.S. Census Bureau, Census 2000
http://www.lvol.com/lvoleg/hist/lvfact.html
-----------------------------------------------------------------------

 

[Tbeaux]

Isn't this exactly the concept that has gotten us smack in the middle of the housing crisis we are in now? Banking on how you think you might be doing in the future just isn't a good idea.

Chris

Umm no...not exactly. The housing crisis was caused by the politicians setting up easy to get "variable rate" home loans. Semi political groups like ACORN arranged the bank financing for the people wanting the loans. Poor couldn't pay when the rates went higher and a lot of wealthier people who had abused the system in order to purchase second and third properties also couldn't pay. The former politicos who had the plum jobs at the banks that held the loans cried to their old pals the politicians to bail them out and the american taxpayer got stuck with the bill. <I hate politicians

Addendum:Forgot to mention...the politicians who investigated this mess were infact those most responsible. Nothing has really been legislated or done to prevent this from happening again <MAN I REALLY FUGGIN HATE POLITICIANS!

 

[KoolKat9Lives]

Isn't this exactly the concept that has gotten us smack in the middle of the housing crisis we are in now? Banking on how you think you might be doing in the future just isn't a good idea.

Chris

So, if you were to open a new business, I guess you'd skip the part about projecting sales?

Hey, I think I understand the connection you're making between "teaser term" mortgages in the early term and this graduated rent scenario. However, there's no way to open a business without banking on what you project to be doing in the future.

If I crunch the #'s and my ProForma looks good, and I have ample wiggle room, and I am properly capitalized, then I'm negotiating for the best terms I can get - graduated rent included.

 

[jay helfert]

So, if you were to open a new business, I guess you'd skip the part about projecting sales?

Hey, I think I understand the connection you're making between "teaser term" mortgages in the early term and this graduated rent scenario. However, there's no way to open a business without banking on what you project to be doing in the future.

If I crunch the #'s and my ProForma looks good, and I have ample wiggle room, and I am properly capitalized, then I'm negotiating for the best terms I can get - graduated rent included.

I took economics and accounting in college and I missed the part about "wiggle room."
Please explain this esoteric accounting procedure to us, the unwashed masses.

 

[KoolKat9Lives]

I took economics and accounting in college and I missed the part about "wiggle room."
Please explain this esoteric accounting procedure to us, the unwashed masses.

Well, in the beginning, the wiggle room isn't just the bedroom. The kitchen, the living room.... Ooops, wait. Wrong room.

I'm simply stating before anyone makes the decision to open a new biz, they had better do their projections of sales, expenses, taxes, cash flow, distributions, etc. This spreadsheet is called a ProForma.

This following example is extremely simplistic, but... Let's say after startup, perhaps 2 years in, after tax profit and/or cash flow is projected at less than 15% of the Gross. In most small to medium biz's, that's not enough wiggle room. Walk away. Don't fudge the #'s and pump blue sky up your arse. You'll likely be one of the biz casualties.

Generating accurate projections on a non-existing entity is an art, a science and a crap shoot. Project very, very conservatively and don't pull the trigger unless you have more wiggle room than the Doll House. :grin-square: People fall in love with their #'s all the time.

 

[jay helfert]

Thanks Kat. My experience has been that a properly set-up poolroom that is doing a good business (I know this is a very general term) can do 40% or more net on their gross income. I've even seen 50% return on gross. Got some wiggle room there, don't you!

I will always recommend that at a minimum you be able to sell beer and wine. It's usually not an expensive license and shouldn't be hard to get in most areas. Beer has a nice profit margin and can really help your bottom line. Without it, you're almost dead in the water (no pun intended). My last place might do $500 a day in table time (average for the week) and another $500 a day in beer sales (also an average). This income alone paid all the bills, salaries and everything else. The total "nut" was about 500-600 a day to break even. That left a nice profit for the owner (me). Add in 50-50 split on video games, juke box, ATM, food and soft drink sales, billiard supplies etc. And you can begin to see where a successful small/medium poolroom (under 24 tables) can make the owner a decent living.

I wish I could say that it was up to Fatboy's projected income of 500-700K a year but it's not. I've never made that kind of money in a poolroom yet. What is small money to him looks pretty good to me. I've seen large upscale sports bars that brought in two to three times that income per year, split among several partners. Personally I've found it easier to run the smaller simpler operation, own it outright and make a nice middle class income. Less headaches with fewer partners and fewer employees. My last place had a total of seven employees, only four who worked over thirty hours a week. I worked night shifts myself (8 PM - 2 AM) with one employee helping me (two on weekends).

 

[LAlouie]

This economy is not a good time to act perfunctorily with your cash. Even if it were a good time to do something with your money, opening a pool room in and of itself is a bad move. Do your homework first.

 

[KoolKat9Lives]

Thanks Kat. My experience has been that a properly set-up poolroom that is doing a good business (I know this is a very general term) can do 40% or more net on their gross income. I've even seen 50% return on gross. Got some wiggle room there, don't you!

I will always recommend that at a minimum you be able to sell beer and wine. It's usually not an expensive license and shouldn't be hard to get in most areas. Beer has a nice profit margin and can really help your bottom line. Without it, you're almost dead in the water (no pun intended). My last place might do $500 a day in table time (average for the week) and another $500 a day in beer sales (also an average). This income alone paid all the bills, salaries and everything else. The total "nut" was about 500-600 a day to break even. That left a nice profit for the owner (me). Add in 50-50 split on video games, juke box, ATM, food and soft drink sales, billiard supplies etc. And you can begin to see where a successful small/medium poolroom (under 24 tables) can make the owner a decent living.

I wish I could say that it was up to Fatboy's projected income of 500-700K a year but it's not. I've never made that kind of money in a poolroom yet. What is small money to him looks pretty good to me. I've seen large upscale sports bars that brought in two to three times that income per year, split among several partners. Personally I've found it easier to run the smaller simpler operation, own it outright and make a nice middle class income. Less headaches with fewer partners and fewer employees. My last place had a total of seven employees, only four who worked over thirty hours a week. I worked night shifts myself (8 PM - 2 AM) with one employee helping me (two on weekends).

You're talking about taking over an existing biz vs opening a new room. Getting into new space vs a buy-out is a whole different and way more risky animal to analyze.

But - The biz model you outline for a buy-out - Well said! My god, if you can put 40-50% on the bottom line, you're in tall cotton baby! :grin: That's a huge % # for any biz.

Is the 50-50 split on the "vending/electronic's" the norm for the industry? I had vending co's place big soft drink machines in my lobbies and made a little $$ off them, but I didn't get 50% of the sales. They gave me a flat rate per unit sold - like 25-50 cents IIRC.

If you don't mind me asking - Why did you get out of the 3 rooms you owned? Good offers? Time for a change? Family reasons? And how did they fare after your departure?

 

[jay helfert]

You're talking about taking over an existing biz vs opening a new room. Getting into new space vs a buy-out is a whole different and way more risky animal to analyze.

But - The biz model you outline for a buy-out - Well said! My god, if you can put 40-50% on the bottom line, you're in tall cotton baby! :grin: That's a huge % # for any biz.

Is the 50-50 split on the "vending/electronic's" the norm for the industry? I had vending co's place big soft drink machines in my lobbies and made a little $$ off them, but I didn't get 50% of the sales. They gave me a flat rate per unit sold - like 25-50 cents IIRC.

If you don't mind me asking - Why did you get out of the 3 rooms you owned? Good offers? Time for a change? Family reasons? And how did they fare after your departure?

50-50 on video game machines and the juke box. On a soft drink machine or an ATM you get a set fee.

I sold my first room after a divorce. My second room was a buy-out by a partner when there was a lot of acrimony between the four partners. The last room I lost the lease on and they refused to renew. Only the second room (Yankee Doodles in Santa Monica) did good after I left. It's still there and making coin. The other two are long gone now.