Should I get this Pool Hall?

What's the upside potential?

You've mentioned the hazards. You've mentioned the limited potential upside. Objectively, it's a bad investment for your time AND money. I think you realize that. Businesses that are doing poorly can only turn around after reorganizational implementation. It seems that those aren't available to you. Should you consider this without emotions, you'll arrive at the correct decision.

I read this thread several times and wasn't going to comment. So many things are so often distorted because the gray areas are complex. To me, this is thoroughly black and white. I felt compelled because instinctually I know you'd be buying someone else's headache.
 
I'm seeing a lot of "Hell No"s posted here. So I'll offer a different idea. Give a low ball offer. I know someone that owned two different types of restaurants, in two cities, and was losing money on both. He could not find a buyer and basically walked away from both. He might have sold some of the equipment but probably most of it was left behind. Your seller may be in a similar situation and just wants to get out and will accept any offer.

Also, its common when you are a new renter in a strip mall that the mall owner will pay for tens of thousands of dollars in renovations in exchange for you signing a lease. For example the building owner may pay $20k to fix up the space if you sign a multi-year lease. The owner wants businesses filling up their spaces, paying rent. In a strip mall setup every active business brings in customers that might discover other stores they want to shop at, so the strip mall owner is incentivised to fill the mall up so overall it's healthy.
 
jeffj2h said:
I'm seeing a lot of "Hell No"s posted here. So I'll offer a different idea. Give a low ball offer. I know someone that owned two different types of restaurants, in two cities, and was losing money on both. He could not find a buyer and basically walked away from both. He might have sold some of the equipment but probably most of it was left behind. Your seller may be in a similar situation and just wants to get out and will accept any offer.

Also, its common when you are a new renter in a strip mall that the mall owner will pay for tens of thousands of dollars in renovations in exchange for you signing a lease. For example the building owner may pay $20k to fix up the space if you sign a multi-year lease. The owner wants businesses filling up their spaces, paying rent. In a strip mall setup every active business brings in customers that might discover other stores they want to shop at, so the strip mall owner is incentivised to fill the mall up so overall it's healthy.
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This is very useful information many people don't know.

We were going to take a location in a relatively dead strip mall where they were willing to foot the bill for $60K in renovations....

Too bad the place was dead because the location was just terrible regardless of what was there..
 
ignomirello said:
$241.00 a day without payroll
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so round it up to $300(things break, wear out etc) that's a extra $60X350days/year call it $20K/year-rocovering tables, broken windows, insurance goes up etc. shit happens, a $20K/yr budget for that aint exaggerated.

next question, if you never work a day there, how much is payroll per week?


then the next post i'll have some real answers for you, i been a biz man my whole life, i'm good at this stuff. And we will see if this is a good deal or not. i'm looking at it with no bias one way or the other.

thanks

glad to help

Eric
 
I've had a little experience with pool halls, and I've seen a lot come & go.
1967, 15-years old I worked at Varsity 8-Ball, close to Denver University.
No food or liquor license, zero parking, just a Coke machine and a few pinball machines.
Table time was a penny a minute.
I'm all for giving this a try if you can negotiate a better deal.
My advice is to get a Coke machine and a few pinball machines>>:smile:
 
Look for 100 to 150 dollars a month rent per pool table. How many tables do you have? Not counting bar boxes, just 9 footers.
 
If Marijuana is legal in you state you can become the first Coffeeshop Poolhall :D
That'll attract a crowd. And stoners like to play pool.
 
thintowin said:
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.
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If you can have a separate room with cherry and poker machines and just get 20 regulars on these, you will make a good living, adding the other 20.000 or so. I know a poolroom that losses money on pool after labor, but clears around 4,000 on machines alone per-week.. The good thing about machines, is its not like you have to restock, even though they are like stealing!
 
As numerous other guys have said, no parking, no booze of ANY kind. Not worth it for 47 which will probably be less.

Youre going to need video machines which equates to younger kids which equates to trouble, pains in the ass generally.

You cant have gambling machines or back room action your first few years as you got to become known and know your own way around, so thats out, unless you dont mind a pinch.

Food is another question and i dont know what the mark up is on it but theres another guy on the payroll. Unless youre lucky enough to have a few take out joints in your area that will deliver, then you only need a few tables just for convenience sake, but that also takes up floor space.

I would say : No.

I am anxious to see what Fatboy has to say about it though, he has seen enough pool room operations and businesses to have a better view.
 
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?
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I could be wrong, but I think the parking issue is dependant on region. I'm from an area that parking is usually abundant. However some places I've traveled this is not the case, and it seems that the people there are pretty much used to it. If its in an area where everywhere else pretty much has parking than its certainly going to be an issue. If people are used to walking half a mile to go to a McDonald's then its not too bad. Again, I could be wrong though. Maybe people from bad parking places like San Fran could correct me.
 
TATE said:
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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Wow, not to often do you hear a buissness owner say he "got lucky." Usually they were just brilliant. Even when they fail, it's usually their brilliance that kept it going as long as it did.
I have a family friend who is very successful and he doesn't have a 6th grade reading level. Of course he says you only need to be able to count. Lol

Bravo Tate on putting success into perspective. Of course you could just be humble.
 
I don't think booze is always a need. Hard times is a huge room by most standards and I don't believe they've had alcohol for years. Maybe ever? I'm sure someone knows. Of course it might not make much money. I don't know. Seems like its been around awhile. I know they get parking issues. Especially with that church, and Sundays/big tourneys.
 
The only way to make something like this work is to form an in house league and actually get it to work. Or nightly single elimination tournaments that will draw heads, once they're out, they'll rent a table. Food would be a must.

Im guessing this will be in NJ. And I know certain places in NJ, liquor license can be BIG BIG BIG money. What about BYOB?
 
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?
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I only read some of the thread due to time limits. But here is something you may consider.

1. Do you know the market size as far as pool players who will frequent the room?
2. In your area, are you allowed to make it a "club"?

If you turn it into a club with a $100/yr membership, or whatever, will patrons be allowed to bring in their own alcohol?

If you can expand the food, run good tourneys, leagues, break pots, etc. It could work if people are allowed to BYOB.

Just a though. Hope it helps.
 
Tony:

I'm going to have to agree with everyone who responded "No!" to your question(s) of whether to "get" that pool hall. That situation sounds to me like the original owner just wants to "launder" it (through you) and try to make a profit from an already-losing venture. Or, on the flip side, maybe you're asking this question because you think you can do something with the place -- i.e. like a girlfriend who's going out with a guy because she thinks "she can change him"? (Sorry for the poor analogy, but it's actually true when you think about it, if the situation is that you have some sort of sentimental value attached to this pool hall.)

Parking is probably the ultimate determiner, the veritable "welcome sign" if you will. Generous parking "welcomes" customers into the business; limited or no parking basically means "move on, nothing to see here" or "restricted; club members only."

And, having no option to buy the property (to give you the ultimate power to do what you will) means this is a dead end.

In other words, "move on, nothing to see there." :)
-Sean
 
20 years ago you could survive without a liquor license. That was pre-internet, online poker, etc.

Today, there are a handful of rooms left in the country that can survive without liquor. Having in house APA leagues and liquor are absolute musts IMO.
 
In a money making stand point, I would never lease it for more than 2 years and I would have to get the lease down a little, do a little fixer up your self for the first year. If you have the means to run the room and make little or no profit, just the enjoyment of having a pool room business you could do it. Try to buy the space if you can. I would jump on it in a heart beat if I could have other means for income at first. Have weekly and monthly tourneys, have an in house pro to give lessons, have an exhibition now and then. If you could sell good burgers etc. you could have a good lunch crowd with special day time rates. I have a bunch of ideas and I would out do any other room in the area. So if it won't ruin you if it fails, I say give it a try.
 
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