How much would you pay for a pool room?

ignomirello

ignomirello

Tony IGGY
Silver Member
How much would you pay for a pool room?

# 1 lets say it earns 17K Year net expenses are 135k 4,800 sq ft

# 2 Earns 120K net a year (Don't know full expenses) 10,000 sq ft

# 1) 30 mins away

# 2) 5 mins away

Neither room has a bar. & sells very little food :confused:
 
a business in general is typically valued at 3 years net profit. for pool rooms it is probably much less than that because the industry is generally not doing well as a whole.

you also have to factor in the dismantled value of the business.
 
ignomirello said:
How much would you pay for a pool room?

# 1 lets say it earns 17K Year net expenses are 135k 4,800 sq ft

# 2 Earns 120K net a year (Don't know full expenses) 10,000 sq ft

# 1) 30 mins away

# 2) 5 mins away

Neither room has a bar. & sells very little food :confused:
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You need to know more information than that. Are you actually looking into purchasing a pool hall? Here's just a few things I'd be obsessing over:

1. Complete financials, including any current debts, cash accounts, value of all assets and properties, etc.
2. Are the patrons loyal to the current owner? And likely to stay after a sale?
3. Does the owner work the hall himself? Does he/she take a salary? Is that deducted from the net profit?
4. Are the claims for net profit backed up by solid book keeping?
5. Is the business growing or shrinking?
6. What are you going to do to grow the business?
7. What are the conditions and terms of all leases? When does the current lease expire?

The list goes on and on, but hopefully that puts you on the right track...
 
3 years past net?

jdxprs said:
a business in general is typically valued at 3 years net profit. for pool rooms it is probably much less than that because the industry is generally not doing well as a whole.

you also have to factor in the dismantled value of the business.
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just a note the last 2 years have a big drop in net income 2009 was 3x more than year 2010 & year 2011 probably will be about 20% lower than 2010. rent is approx 10x sqft in both cases.

in case #1 What would you pay to marry & make approx 1k a month?
 
in case #1 What would you pay to marry & make approx 1k a month?
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Not much. Have to realize that owning a business is a 24/7 job. You need to make 3 to 4 times that to even think about it being worth your time.

You have to be able to live pretty minimally for at least one year if not more, sinking just about everything back into your business.

Within that time period, it will give you a pretty good idea of where your new business is headed.
 
ignomirello said:
How much would you pay for a pool room?

# 1 lets say it earns 17K Year net expenses are 135k 4,800 sq ft

# 2 Earns 120K net a year (Don't know full expenses) 10,000 sq ft

# 1) 30 mins away

# 2) 5 mins away

Neither room has a bar. & sells very little food :confused:
Click to expand...

I think rule of thumb is 2 years net + fixtures. Problem is, it is hard to put a price on good will. Customers can be here today and gone tomorrow for any one of a number of reasons. Not to mention everything else such as lease. It is not like you are buying a manufacturing business with contracts and predictable income. Also you mention no bar, is that an option? If not that would be a deal breaker for me from the start.
 
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ignomirello said:
just a note the last 2 years have a big drop in net income 2009 was 3x more than year 2010 & year 2011 probably will be about 20% lower than 2010. rent is approx 10x sqft in both cases.

in case #1 What would you pay to marry & make approx 1k a month?
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i assume you are renting the real estate. what about equipment? paid for?

is there a liq liscence included?
 
The alcohol and kitchen would be a deal breaker for me too.

A person has to be able to offer more than chips and peanuts.
If someone is hungry, they may leave to get something down the street and not come back. That for a start, you have to give people a reason to stick around.

With the sq footage that is available, you should be able to put in a small kitchen. Grill, deep fryer, stove and fridge at the very least.

Its kind of like, the back end supports the front end and the front end supports the back end at times. You need all options these days.
 
ignomirello said:
How much would you pay for a pool room?

# 1 lets say it earns 17K Year net expenses are 135k 4,800 sq ft

# 2 Earns 120K net a year (Don't know full expenses) 10,000 sq ft

# 1) 30 mins away

# 2) 5 mins away

Neither room has a bar. & sells very little food :confused:
Click to expand...

Forget about #1. That is a break even business that is on the brink of closing. The only value it has is the value of its equipment. If you can get it cheap and believe you can turn it around, go for it. But you MUST be able to assume a good lease, with favorable terms for you as a new owner trying to salvage a dying business.

#2 sounds a little sketchy too, but that is a decent income. With no bar or food where does it come from? I'd be wondering about that myself. Even with a good lease I wouldn't get into a larger room like this without a bar and food operation. TOO RISKY!

The advice you got here already is good advice. Do your due diligence and find out ALL the financial particulars. Visit on various nights to see how business REALLY is, not just what someone tells you.
 
Well

You all can find out, Shooters here in Wichita is for sale. 10 Valley bar tables, full bar and kitchen, and pro shop. Largest league Pool room in town.
 
I'd walk away and forget both. Just look thru the recent threads on this Forum. How many liquidation sales due to pool room closures do you see? It's just a bad time to take a flyer on a risky business venture. But I wish you good luck on whatever you decide to do in the future.
 
At least in the food biz, you should pay about 2x net, sometimes more sometimes less depending on the economy and the particulars.

If you want to add a kitchen/bar make sure you can get a food license from the town before you make any deals.

Don't fall for the trap of the current owner telling you all the great income you can make from food, leagues he never bothered with, advertising he never did and on and on. You don't pay for potential, only for what is on the books.

Purchasing a declining business isn't usually the best idea unless there is an identifiable, correctable reason.
 
jay helfert said:
....
#2 sounds a little sketchy too, but that is a decent income. With no bar or food where does it come from? I'd be wondering about that myself. ... Do your due diligence and find out ALL the financial particulars. Visit on various nights to see how business REALLY is, not just what someone tells you.
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One reason to determine the gross/net on your own is that they might be laundering money. Say they are selling herbs on the side and want to get that money into a bank account. They put $500 extra into the till each night along with the $100 they actually took in. They pay taxes on the "income" and then they can spend it without people asking questions. The best part is that they show you the awesome books and sell you the business for 10x what it's worth.

I hear that restaurants are a good business to work this scam with, but a pool hall has no visible inventory (just table time) so it should work even better.
 
Adding to what Bob said:

A one or two week trial period in which you are there from open to close, recording the sales yourself is also a must. Occasionally someone might want to see a deposit to show you are a real buyer before giving you that access, but mostly people will let you do that during the negotiation process. I've done that with every business I've been involved with. If they won't let you do it without good reason then walk.
 
Having owned a room, the things that come to mind for me are, enough space for diversity. To maintain a long term business, you have to keep the clientele's interest. That means different things to do besides just playing pool.

In other words, space for expanding food service. Space for seating to eat. A TV or two. At the very least, beer and wine. Darts. Room for a small Pro shop. A place to display items for sale. Enough room for a private office and bathroom. (very important) Enough room for comfortable area around the tables for play, seating and shooting.

I'd never even consider a room smaller than 6 or 7 thousand square feet at the bare minimum, and I'd be looking at 10k and above.

In these bad economic times, I'd be looking for very low rent with good options. Landlord to be responsible for repairs to the roof, plumbing and HVAC.

Back when I was looking, I used my own formula that was basically no more than 100 dollars a month rent per pool table.

That means, if I had 20 tables, no more than 2k a month rent (plus utilities of course). In today's dollars, that would be more, but without recalculating, I wouldn't expect it to be more than 200 a month per table if your primary business expectations are for a pool room rather than a nightclub, otherwise you will be working for your landlord.

Unless you step in a pile of shit, you're not gonna get rich doing this, you're gonna be exhausted, and your love of the game will most likely fade away only to be replaced with a hate of people and loud music. :banghead:
 
I'm guessing you're in NJ/NY so a big factor that I haven't seen brought up is the lease. How many years are left on the lease?
 
I know nothing about running a pool room. However, i will tell you this i think its best if you diversify. Making $$$ just off the table rental time will probably not be enough. You probably will have to have events and make room for them. Meaning you have to probably attract more than just pool players. You have to have a bar/kitchen in there. In my limited time around pool halls and pool in general ive noticed at least around here you get a bunch of old fogies, who just sit around and hang out. Never really actually spending much money for the most part. However if you can get your pool room two have a dual identity possibly as a pool room/sports bar you will probably increase profits. These are just some of my observations.
 
A Different Take

I didn't look at the numbers that closely but I have a little different take on this.

If you actually run into a room that is netting even 20K a year and they don't even have a bar or a kitchen than I'm thinking there is a lot of potential for growth there. Just putting in a small kitchen that offers a few decent options could turn that into a money maker. Probably not something that is going to make anybody rich, but it could grow into something.

I would want to look at the number a bit myself but I would be skeptical of any of the numbers that were shown to me. I really don't think it would be that hard to calculate the numbers. I would be mainly concerned with how many people where coming in and out of the place.

If it's a dream of yours then don't be scared off. We need people that are willing to take a risk every once in a while to keep this game alive.

Good luck.
 
Scott Lee said:
not a dime...you'd have to pay ME to take it! :grin: You can make a grand a month doing far less work (and with a LOT less headaches) than owning a pool room.

Scott Lee
www.poolknowledge.com
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not a dime...you'd have to pay ME to take it! :grin: You can make a grand a month doing far less work (and with a LOT less headaches) than owning a pool room.
:withstupid::yes:
 
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