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Old September 6th, 2008, 03:57 PM
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marklwood marklwood is offline
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Join Date: Oct 2005
Location: Joplin, MO
Posts: 960
Quick Economics Lesson

Just a quick economics lesson for you all.

A bar operates on a basic economics principal.

You have fixed costs like rent, utilities, minimum staffing, entertainment, and license fees, advertising, building repair and maintenance.
This gives you a break even cost for every day. (mine is $300)

Now you take your sales and remove the cost of the goods you sell, the taxes on those goods, and the waste. That gives you a minimum break even sales for the day. (mine is $450)

Now take your seating capacity and divide your sales by that. (Mine is 85)
That means if I am at capacity, I need each person to spend $5.29 just to break even.

After all this you can see what your profit will be on a daily basis. (mine is about 40% of sales over $450.

I am lucky enough to be a pretty low maintenance guy. I don't need new cars of fancy toys. I pride myself on finding the best deals on anything I buy. But you can see where some owners may have a different view. They may think they need that $500 a month car payment, that $30k Harley, or that $50k pontoon boat. Worrying about those kind of bills every day can put a lot of stress on people. This may cause them to lose any sense of community or fairness. Desperate people do desperate things. I had an uncle who was a very successful business man used to say, "business is business" while he was screwing people. I guess I never learned that lesson.
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