Should I get this Pool Hall?

ignomirello

ignomirello

Tony IGGY
Silver Member
Should I do this?

How much would you pay for a Pool Hall that has no chance of getting an alcohol license?

Owner sells very little food.

Seller wants $13 Sq Ft for lease rental. Lets say $65k/yr

Expenses are about 4.5 times Square footage without Payroll. Approx 23K/yr

Income is 27 x square footage *lets say 135K/yr

$135k-65k-23k = 47K
47k LEFT TO PAY EMPLOYEES & MYSELF
@$10+/HR = $21k/yr

Pros: leveraged out. Very little money in. Income can be driven up with food.

Cons: Won’t sell building. No off street Parking. (Might be a problem filling up room). Many updates needed. Baths/Software. Roof is over 25 yrs old. No chance of getting liquor license at this location.

Question is will the business make me Money or will I just be marrying a job?
 
How many dollars per day does it cost to open doors 365 days a year?

lets start there and break it down.
 
Stop

Without sufficient parking nothing else matters.I have seen 4 very successful Poolrooms in my area.They all ran their busn. Somewhat different from each other but the one thing they all had in common was plenty of parking.On the other hand I have seen some nice rooms with limited parking and no matter what they did could not survive.One room was a show palace with new 9 ft. Diamonds on the ground level and 7 footers on the upper level, great food full liquor license.They tried everything from leagues, tournaments, even free time.They just could not get enough people in there at one time.Next time your at a tournament , count the cars.Most players drive solo, and that does not include the non players.I am always encouraging when someone says they are thinking about buying or opening a room , but you need plenty of parking.Old strip shopping centers that look like ghost towns have cheap rent and unlimited parking,make good locations.Whatever you decide I wish you the best of luck and find it encouraging that you are thinking about owning a room.
 
For me that's bad money. You will be running a business. Mopping, cleaning, sweeping, payroll, taxes and a million other things. 47k Should be what you alone make.

This shouldn't be a question that you are asking. Unless you can live off of minimum wage. The answer is an obvious NO.
 
Thanks Franko

franko said:
Without sufficient parking nothing else matters.I have seen 4 very successful Poolrooms in my area.They all ran their busn. Somewhat different from each other but the one thing they all had in common was plenty of parking.On the other hand I have seen some nice rooms with limited parking and no matter what they did could not survive.One room was a show palace with new 9 ft. Diamonds on the ground level and 7 footers on the upper level, great food full liquor license.They tried everything from leagues, tournaments, even free time.They just could not get enough people in there at one time.Next time your at a tournament , count the cars.Most players drive solo, and that does not include the non players.I am always encouraging when someone says they are thinking about buying or opening a room , but you need plenty of parking.Old strip shopping centers that look like ghost towns have cheap rent and unlimited parking,make good locations.Whatever you decide I wish you the best of luck and find it encouraging that you are thinking about owning a room.
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Thank you very much for the info Franko :-)
 
Sky high rent with no food and no alcohol equates to zero chance at making any money. I don't see any way of overcoming the rent nut, let alone all the other expenses in running a business.
 
ignomirello said:
Should I do this?

How much would you pay for a Pool Hall that has no chance of getting an alcohol license?

Owner sells very little food.

Seller wants $13 Sq Ft for lease rental. Lets say $65k/yr

Expenses are about 4.5 times Square footage without Payroll. Approx 23K/yr

Income is 27 x square footage *lets say 135K/yr

$135k-65k-23k = 47K
47k LEFT TO PAY EMPLOYEES & MYSELF
@$10+/HR = $21k/yr

Pros: leveraged out. Very little money in. Income can be driven up with food.

Cons: Won’t sell building. No off street Parking. (Might be a problem filling up room). Many updates needed. Baths/Software. Roof is over 25 yrs old. No chance of getting liquor license at this location.

Question is will the business make me Money or will I just be marrying a job?
Click to expand...

No,No and No !!!!!!!

Try to find a place with good parking and a chance to buy the building.


bill
 
I wouldn't without alcohol. And parking is an issue, but I don't really know anything about it.
 
I see your in NJ......



.......Have you checked to see if there are any "fees" involved from the Tony Soprano types?????

Do you pay carting fees for garbage? Can you choose who your carter is?
 
As a Business owner with a partial liquor license and plenty of parking... its not easy. Parking is so key, I rarely visit friends who have parking space issues. The ease in which people can come to your place and play is important. What kind of area is it in? Idk man, seems like a lot of cash that might be better used in other places. It sounds like you might be buying someone's problem.
I know the dream of owning your own pool hall is... intoxicating. Depending on how close you are to doing this. If you have the cash to go and take this on whenever, I would see a business analyst/financial planner. Go outside the pool world. As it turns out the billiard community is good at putting balls in pockets, but not so good at money in the pockets. Good luck.
 
alcohol is a big deal, unless you are in a place where you have a ton of pool players and nowhere else for them to go. There just doesnt seem to be enough upside here to make it worth while, especially for the return. You need to make more then that to make it worthwhile, being your own boss aint all roses and rainbows.
 
ignomirello said:
Should I do this?

How much would you pay for a Pool Hall that has no chance of getting an alcohol license?

Owner sells very little food.

Seller wants $13 Sq Ft for lease rental. Lets say $65k/yr

Expenses are about 4.5 times Square footage without Payroll. Approx 23K/yr

Income is 27 x square footage *lets say 135K/yr

$135k-65k-23k = 47K
47k LEFT TO PAY EMPLOYEES & MYSELF
@$10+/HR = $21k/yr

Pros: leveraged out. Very little money in. Income can be driven up with food.

Cons: Won’t sell building. No off street Parking. (Might be a problem filling up room). Many updates needed. Baths/Software. Roof is over 25 yrs old. No chance of getting liquor license at this location.

Question is will the business make me Money or will I just be marrying a job?
Click to expand...

Unless you are confident there is potential to significantly raise income levels (and you don't sound like you are) this is a waste of time and potentially a disaster.

When you buy a business, first you should consider what you are risking versus what future return you may get. It's easy to "sign on the dotted line" and find yourself in a world of debt. Watch the show "Restaurant Impossible" sometime. It's amazing how a $100,000 restaurant can turn into $1,000,000 worth of debt.

Let's say you sign a 5 year lease @ 65K and find after a year that you are losing money (even with no salary). Let's say you are losing $2000 a month. You are really losing your lost wages or living expenses plus $2,000 a month. If you could work and make $4,000 - you are really losing $6,000 a month in combined outlay and income losses.

Two years into it you will be down 24 months X $2,000, or 48K plus living expenses and still have 3 years left on your lease, or $195 K. Realistically, you are risking about $300,000 purchasing this pool room if your lease is 5 years - that's without any outlay for improvements or equipment. If you have the cash, you might be able to buy out of your lease by threatening to file bankruptcy, but still there will be issues.

If things really spiral, you may find yourself borrowing on your house, from your family and friends, maxing out your credit cards, etc.

I am not against buying a business by any means. I bought my own business 30 years ago and took a lot more risk than this. But I knew my business well and I was pretty young and brash and too stupid to have the correct amount of fear. Frankly, I got lucky. It worked out but there were some really scary moments. We had enough financial backing and credit to get through the bad times, but sometimes your credit sources go south when business goes south. Also, although there was a lot of risk there was a lot of upside potential to make money. I've been involved with several business purchases actually. It's definitely not something I would do lightly.

If I were going to risk 300K on buying a business, it would not be a pool room. Not in the USA. I love pool but I just can't see the return on it. I can't make the dollars and cents line up. I would probably buy something in an industry where there is a growing demand and room for expansion.
 
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u would have to have machine gambling, and sports book to make it and run a card game after hours if u wanted to make more than ten bucks an hour.. otherwise bad business equaks a bad investment.
 
I come from a restaurant owners background so take my opinion FWIW on that.

If you're estimating $47k per year to work with payroll and yourself you're most likely not seeing something somewhere or getting cooked book records on sales. It's never as it seems. That 47k might only be 37k after a year. If you're lucky.

You'd be leaving with $20k a year in your pocket maybe.


I'd walk away. Maybe run....
 
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