Buying a bar in Spain

So you want to have a small fortune ?

Start with a big one and open a bar

It does not come as an unbelievable surprise that millions of people choose to enjoy the delights of Spain and the Costa del Sol, with its friendly people and warm climate, and that some of those dream of owning a bar to cater for these expats.

Having observed 1000’s of bars changing hands over the years, with many previous owners having to beg the money for the airfare home, I decided to chat to many bar owners in Marbella, Fuengirola and Torremolinos, particularly those who enjoy a very successful business.

As a result I then decided to offer a free course in how to lose money as quickly as possible, so that the agony of those who choose to fail, should not be prolonged.

Although you are not in the first million people who have opened a bar somewhere in the world, most of who failed, you have to imagine that you are the very first, and that you therefore have to think, and dream, of how you should operate.

A bank director once told me that of all the people who become self employed 9 out of 10 fail. Of those who survived, 1 out of ten made a living, and of those 1 out of ten made a very good living., and of those 1 out of 10 became a real success. By thinking, guessing and having opinions, the chances that you will be copying the 9,999 are very good indeed, and the odds of your being the 1 out of 10,000 are as rare as the Los Boliches under 14 girls football team winning the Spanish League.

According to the experts, night trade is a different business, requiring entirely different skills, to cater for those who have been successfully working all day and want to go out to enjoy themselves. They pointed out that the major difference in daytime trade was the turnover achieved in the mornings.

There are evidently several markets of potential customers at which to aim your business in all the tree towns that were researched.

Firstly, a few thousand retired folk who like to take tea or coffee every morning and talk with friends or read.

Secondly, a few hundred workers who leave work to take a coffee and a sticky bun, and want to read the newspaper or chat with someone.

The third group of several hundred is composed of holiday-makers, the average age of which other than during school holidays, according to a survey, is 67

The fourth group, maybe 10 alcoholic retirees, who have a wicked headache from the night before.

And lastly, maybe ten working age Brits who are unemployed and who have no money.

My advice, for your aim of becoming bankrupt, would be to aim at the fifth group, The Ten. In this way, you won’t take enough to buy the extra toilet paper you will need when you see your bank statement. As there are so many bars, if the customers divide themselves equally, the result might be 15 each. As the successful bars get ten times their share, you should aim to be below the 15. If you already run a bar that offers the cheapest daytime price in town, you will already know how many that attracts, maybe 10.

The next consideration is GP. This does not refer to motorcycle racing, nor, if your are British, to your family doctor. It is the major number in the hotel and catering industry and refers to Gross Profit.

If an item cost ten cents and you sell it for 1 euro, that is a GP of 90%. Similarly, selling food for 10 euros that costs 2.50 is a GP of 75%, while selling a beer for 1 euro that costs 65 cents is 35%.  The norm for food in the hotel and catering industry is 75%. The difference in your GP, using the above figures on a monthly turnover for a bar of 5,000 euros, is, at the lowest 1,750 euros, and at the highest 4,500 euros.

So, having decided at which customers you are going to aim, and your GP, you now have to disregard the advice of the experts on the finances of buying a bar.

The basic rules would appear to be to divide your available funds into:-

6 months rent for your apartment, and beans on toast, say 6,000.

6 months rent for the bar, and the other bills, say 10,000.

6 months publicity, say 200 per week, 5,000.

Whatever is the cost of the stock, say 4,000.

That little lot takes care of the first 25,000 euros that you have.

10 euros for bleach and detergent for cleaning.

Whatever is left is available to buy a bar.

My advice would therefore be to blow almost all your money on buying a bar, and the rest on completely renovating it. During this renovation, don’t take any notice of the people on the other side of the street who are rolling around on the floor laughing, it’s only because you are the third new owner in the last twelve months who has done exactly the same.

The next major step in being a failure is to ignore all the things that those who have attended hotel and catering courses now know are vitally important.

Staff will wear the uniform provided. No underwear must be visible.

Having read that although only 1% of British males have tattoos, and that 93% of men in prison are proud of them, most people associate tattoos with criminals. No tattoos must be visible.

Men may wear one ring, and ladies may wear rings on one finger, and earrings.

You must watch the customers at all times, regardless of what you are doing.

You have 60 seconds to serve a new customer, and 60 seconds to clear the table when they have left.

One of the reasons that in Spain far fewer newspapers are sold than most other countries is that every bar supplies them for free. Staff are forbidden to read the newspapers when there is a customer in the bar, in other words, never.

Our customers are business people or retired folk who come to chat and therefore music is prohibited.

Family and friends are not permitted to come and chat to you during working hours.

You are not permitted to speak to another member of staff or a customer from a distance greater than one metre.

As our market is the first group of potential customers, there are two ways that we could conduct market research to discover the ambience that we should provide. Firstly we could pay to have a questionnaire completed by 5,000 retired people, or alternatively ask The Ten for their opinion, and then do exactly the opposite. As the average age of our market is possibly 40 years older than that of our staff, we do not require your opinion on any matter concerning the style of our business.

With the knowledge that in the retail trade the three most important points to bear in mind, are, location, location and location, and that in serving the public they are attitude, attitude and attitude, my advice in your deep desire to fail would be:-

If you take over a bar that has a uniform, get rid of it before you open.

If you don’t have any old scruffy clothes, go to a charity shop and get some, and don’t forget to rub them in the dirt before you turn up for work.

If ladies have any tops that don’t show their bra, give them away to a lady who knows how to behave. If you don’t know any, burn them.

You can solve the problem of skirts and trousers that don’t reveal your underwear, by borrowing some scissors, and cutting a great slice off the top. Both of these points will help if you wish to be considered among the bottom 1% of society

Try to get any male staff to wear just a vest so that they can lean over   customers with their great sweaty armpits.

Ensure that you do not employ any male who owns a shirt, trousers or shoes as he may upset your plans by wearing them for work.

Get some colourful tattoos. If you don’t fancy being seen with them when you are not at work, use washable transfers.

While most male staff will object, insist that they wear earrings and preferably a safety pin in their nose. Try to convince them to wear lots of rings, and gold chains around their neck and on their wrists.

You are far too busy to attend to customers, so it should be possible for them to come in, sit around for 20 minutes or so, and walk out without you even knowing that they were there. I have lost count of the number of times this has happened to me.

It matters not whether you decide to buy newspapers, but if you really want to include this in your campaign to fail, it is suggested that you follow the example of one bar I visited. On seeing the proprietor reading a newspaper I asked if the bar had one. The reply was, “No we don’t, this one is mine, if you want to read one go and buy your own”. One would assume that his bar is the same on most days as the day I happened to be there, absolutely empty.

If you are going to go for The Ten unemployed, make sure that the music is loud so that all other potential customers will not step inside. If possible, provide noisy music and at least three TV´s, all tuned in to different channels

Make sure that you are too busy chatting with your loved ones to notice that there are customers in the bar. If possible, get your young children to run around screaming. If you don’t have any of your own, borrow them from someone else.

Do not speak to another member of staff or a customer unless you are at the other end of the bar, or at least a long distance away.

As the largest market and the highest GP appears to be 67 years of age, ensure that you provide hard plastic chairs to keep them away.

If you are visited by The Ten you are obviously already taking all the right steps to the thousands of other potential customers.

During a lecture given by the head of personnel of a major hotel group, the expert described the recruiting process for a new hotel to be built at the crossroads of two major highways, where the potential staff would come from the only town within 50 miles, which had 80,000 inhabitants. In looking for reception staff, they were aware that although there would be quite a few who would qualify on the administrative skills required, there would be a maximum of 10 with the right attitude.

Rather than acquire the years of experience in recruiting, it is suggested that you employ your family and friends, who, far from being in the top ten, are quite possibly not in the first ten million.

Whatever you do, you must not copy the successful businesses, among which are:-

A bar employing 5 morning staff in uniform that takes over 700 euros per morning.

A bar employing 4 morning staff in uniform that takes over 600 euros in the mornings.

A tiny husband and wife bar that each morning takes over 250 euros.

The average GP appears to be 90% on beverages and 60% on food, and produces an average of 75%. This means a GP for the husband and wife bar of over 5,500 euros per month, and that is just morning trade.

A lady who worked in a bar that is the middle one of seven in a line. The other six finally closed and her boss decided to do the same. She persuaded him to let her rent the bar. She now has to use all seven terraces to cope with the trade. She also specialises in lunches and on Sundays alone she has an average of 260 customers at an average spend of 14 euros, thus taking more each Sunday than some bars take in a whole month. This at an extra cost of 10 euros per hour for 4 people for 4 hours. A reservation is an absolute necessity every Sunday.    

How did she achieve this amazing transformation? Easy really, she just switched off the music. Unfortunately she has temporarily lost the terrace of bar No.1 in the line, as it has a new owner. Not for long though, as the owner cannot live without pop music, and has hardly had a customer since he opened.

If you have already allowed your self to think, and have your own ideas, you have probably invented, and followed, your own failure course. Should this not be the case, then don’t despair. By following my advice, and unknowingly imitating the thousands of failures who have gone before, you should be able to speed up the process of failure. When you do a runner, and disappear into the sunset, you can be proud of the fact that the vast majority of the one million inhabitants of the province are still completely unaware that you had ever opened. At this point you will realise that you hadn’t actually bought anything at all, but merely paid someone a huge sum of money for the privilege of renting a bar.

If you are about to buy a bar you might like to give serious thought to the three alternatives before going ahead. Firstly, resolve not to have a single idea or opinion and copy the successful businesses in every respect, and rent a bar. Secondly, catch the next flight home, with your money still in the bank. Thirdly, divide whatever money you have between the bar owner and the agent, and catch the same flight home, as this will avoid the agony of losing it slowly.

Reader’s letters:-

I took over a cafe that had several hundred daytime customers and turned it into a pub. Having followed your advice on failing, I have managed to get rid of all those and now just get one or two of The Ten when they are not in another bar. However on two mornings in the last few months a complete stranger has wandered in and wanted to be served. What can I do to prevent this in the future? My advice? Get a jukebox.

I arrived on the coast just over a year ago with £132,000 and bought a bar. Without realising it, I followed your failure course to the letter. After a while I could not even pay the rent and lost the business. A short while later, as I could not pay the rent on the apartment, I was out on the street and now sleep in the car.