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Starting a bar/restaurant--Specific information wanted

Posted by: FredFlintstone - [user profile]
Date posted: Mon 21st Mar, 2005
Category: Business
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I'm looking into opening a bar/restaurant here in Prague and am looking for some specific information.

I've lived in here for a while and know my way around the scene pretty well (what's hot, what's not, what works and what doesn't, locations, customer demographics, cultural differences, etc.), but I was wondering if anyone has any experience with opening/running a bar/restaurant here.

I'm veersed in getting an s.r.o. and what it takes to open a restaurant in general (planning, organization, location, 90% failure rate, costs, business plan, marketing, etc.), but I'm wondering what special considerations to take into account vis-a-vis opening and operating a bar specifically here in Prague. I don't mean the fact the city is already overloaded with bars, half of which sit empty. What I'm interested in is practical hurdles and obstacles specific to Czech law, regulations, business practices, etc.

One thing, for example, that strikes me is the low cost beer and wine. I'm used to a beer mark-up of around 500%. What's the typical mark-up here? Do you have to rely on selling cocktails for your profit? Also, how do you control the cash if you don't have a register and receipts? I'm also looking for resources regarding vendors, equipment sales, sales of bars/restaurants, foreclosures, etc. That kind of thing.

Any info would be helpful. Thanks, I appreciate it.

Fred

COMMENTS:
Jim - [anon] Mon Mar 21st 20:59 2005 / #1
Hi Fred Flintstone!

Sounds like a good business idea. Are you thinking of catering for locals or tourists/expats?

A link which might help (regarding any legal questions you may have):

http://prague.tv/venues/daniel-malis
[ anonymous ] - [anon] Mon Mar 21st 21:42 2005 / #2
You might be able to find a suitable property for a bar from these people.They are currently helping a friend of mine locate something suitable and he says they have been superbly helpful as a real estate agency - he has agreed to pay them a commission for helping him find the right place. www.rentals-reality.cz and look under commercial space for rent -everything is in english too!
[ anonymous ] - [anon] Mon Mar 21st 21:43 2005 / #3
Sadly this town swallows bars whole.
[ anonymous ] - [anon] Mon Mar 21st 22:25 2005 / #4
Sadly this town swallows bars whole.

????? what the **** is this supposed to mean?
FredFlintstone - [profile] Tue Mar 22nd 09:35 2005 / #5
Thanks, Jim and #2, I'll check out those links.

Jim, to answer your question: The demographic I'm aiming for is basically trendy Czech yuppies and yuppy wanna-bes (18-35) with expendible cash, those in media, marketing, finance, advertising, etc., or else recent students with their first jobs in said industries, as well as students, Czech or foreign, lucky enough to have some money to burn (e.g. those at UNYP, the Anglo-American College, many at Vysoky Skola Ekonomicka). As for expats, they'll follow in good order, I'm sure. They always do :-)

However, #3 is right, this city is tough on new bars (as are most cities, it's the nature of the beast), but I've checked out the market pretty extensively and have a concept that is so far not represented in Prague that I think would do well if positioned properly.

Thanks,
Fred
Micah Micah - [profile] Tue Mar 22nd 09:40 2005 / #6
No worries, Fred! Just find one that works and copy it! What you want to do is to avoid any possibility of seeming to be "different" or "unique". Pay a few hopsatky to lurk around a suck down watery mojitos. It's a no-brainer.
barbar - [anon] Tue Mar 22nd 11:11 2005 / #7
Hi Fred,

Here's a couple of things I remember from bar management:

1) You're going to need a health and safety inspection permit (kolaudace). The space you rent (purchase) may already have this if it's set up as a bar/restaurant - but if you're installing your own toilets, kitchen, bar etc. you'll have to sort this out with the kolaudaÄ?n?­ ???™ad. Some very fussy ladies will come round and peek into all the corners. If you want to be legal you'll have to have everything sparkling and in good order.

2) Czech out your neighbors and the locale. If you want to have music, you don't want to end up in a protracted legal feud (radost/roxy). Soundproofing may be required, but even this won't help if there's an irritable and powerful granny living above right above the bar.

3) Mark-up usually runs 4 to 1 overall. Depends how select the place is tho. Beer, wine, coffee, sodas etc go low end 3 to 1, and then the balance is set up 5 to 1 (spirits etc). Get a good accountant on board. You'll use a wholesaler for alcohol (RplusR is well reputable) and deal direct with breweries for beer (see below), likewise coffee. These all deliver.

4) I don't see how you're going to run the place without a register, unless you're on-site 24/7 doing everything yourself. Be warned, without a strict control system your employees will steal. Maybe just nickel and dime stuff in the beginning or a couple of beers for friends, but slowly and surely the business will start bleeding. Bar staff are not bad people, but I remember a great case: lovely guy, everybody trusted him - he told me how he stole out of *boredom* and just for *fun*.

5) Good news: If you come up with a good business plan, location etc. breweries and liquor companies will frequently *sponsor* your bar - I know bars that had the whole set up provided free by Staro, and you can also get crates of free introductory alcohols from places like United Distillers. Speak to the reps.

That's all off the top of my head at the moment. Hope this helps some and good luck.

b
barbar - [anon] Tue Mar 22nd 11:13 2005 / #8
Sorry, I really didn't want to write Czech instead of check for no.2. I hate that shit.
RacerX RacerX - [profile] Tue Mar 22nd 11:14 2005 / #9
Scott over at Tulip cafe wants to make a move and is looking for a buyer. It seems to fit with your demographic and he has everything already set up. His email is scott @ tulipcafe.cz. He's a great guy and I'm sure will give you a lot of backround on the market too.
[ anonymous ] - [anon] Tue Mar 22nd 12:44 2005 / #10
Fred,

Here is that link for you. Have a look at some of their properties suitable as restaurants / bars.
http://www.rentals-reality.cz/index.php?type=1&cat=5 &lng=en
FredFlintstone - [profile] Tue Mar 22nd 13:58 2005 / #11
Barbar:

Thanks for all the great information! Do you think I could email you as I get further along and maybe we could chat? BTW, what are you doing now that you're out of bar management?

Racer X:

Thanks for the tip, I'll contact him. I used to go to Tulip a lot when I lived in the neighborhood.

Also: Does anyone have any info on securing a small business loan here? Can I get one as an EU citizen? Is it difficult? Just looking into all options.

Thanks.

F.
[ anonymous ] - [anon] Tue Mar 22nd 14:21 2005 / #12
Fred,
There are a lot of interesting details about running a bar in this town. Barbar made some great points. The liquor and beer distributors may try to get you to sign exclusivity contracts which is strictly illegal. If you want the brewer to spring for remodeling and design costs be smart about who you choose and make sure that they are going to give you a good deal, it is a two way street after all something that a lot of sales reps seem to forget.

Also you must remember that the clientele in this town are extremely fickle, mostly because they have well over 5,000 bars and restaurants to choose from. Many good bars have gone out the bad way because of managerial incompetence, theft or just plain old bad luck.

Also you will need a jednatel, a Czech citizen to act as the legal face for your entity.

In addition to the sticklers who issue the permits for health and safety you are legally required to measure all hard alcohol pours. This may sound like a joke but it is not and people have paid because of it.

Then you get into the legal or illegal employees issue. Legal employees cost you because you will end up paying an exorbinant amout of tax on them. Illegals are much cheaper until you get caught.

Trust is always a problem as well. The idea is to get a good GM that has experience and provable references. Everyone always cries about the servers and the bartenders stealing but more often than not I have seen the case of the GM and/or the other managers stealing and then using the servers and/or bartenders as scapegoats.

If you have never run a bar before then you are going to need as much help as you can get. If you have run a bar before you will still need help because this town is ruthless. Even the guys who seem like they are doing good business are struggling to keep their heads above water. The marketing angle is usually a waste of time and money, live music is always a good draw as are reasonably priced drinks and a groovy atmosphere. But it is forever unpredictable.

There are endless other details that I cannot recall at the moment but you will surely experience them all.
barbar - [anon] Tue Mar 22nd 16:53 2005 / #13
Hi Fred, you're welcome to what info I have. I worked in the industry a long time ago tho, when it was more of a gray area in terms of legislation, so it'd probably be more useful for you to keep this dicussion going on PTV - I've moved on to something more hassle free and lucrative, and there's a lot of good advice here. anon12 makes good points about the gray area stuff - I guess apart from the big guys most stuff in bar world is going to be grayish. Here's an old article you should look at: http://www.praguepost.cz/busi020701b.html and here's a Czech forum for people doing business in bars and restaurants http://www.gastronews.cz/poradna_seznam_temat.asp?id=7 Sooner or later you're gonna need a Czech on your team somewhere. Overall I agree with a lot of other posters here - the best route is probably to pick up a defunct but legal bar as a complete package. Invest into an attorney to look at the legal details and then purchase in one go. If you're fast you might pick up some of the old clientele too, and then you can set up with a running business. Other brief thoughts: toilets - make you toilets the most hygienic in Prague. They're the hidden heart of your business. inventory - devise a clear and simple stocktaking system and employ it, visibly, every night if possible. coffee etc - coffee can make as much money as beer. make your coffee fresh and well presented. like you'd want your coffee. grass etc. - it's a tough call but I'd say you got to have a no weed regime from day one. tokers are nice people but they don't drink (enough). Even Fractal worked that one out. One last thing - you might want to delay any cash outlay until next year. If that lamentable and pathetic smoking ban does go through, you and a lot of other bar people are going to be looking elsewhere.
todd todd - [profile] Tue Mar 22nd 17:16 2005 / #14
barbar, well said. I agree, do inventory nightly, work with your staff not up in the office, use a good register system, pay well, introduce a good bonus system which rewards staff based on profits, implement a good scheduling system, honor holidays, run a computer behind the bar with 200 gigs of music which you program every day, offer good specials, offer great bar food, good coffee, good bloody marys, find a space with outdoor seating, and of course advertise on Prague TV :)))

good luck
barbar - [anon] Tue Mar 22nd 17:25 2005 / #15
nice one todd ;)

oh yeah, and don't nail more than one of the waitresses at a time - creates a BAD atmosphere :-)
[ anonymous ] - [anon] Tue Mar 22nd 23:08 2005 / #16
Check out http://www.praguepropertyfinders.com/listings/detail.php?id= 183595
FredFlintstone - [profile] Wed Mar 23rd 08:10 2005 / #17
#12, Barbar, Todd:

Thanks for all the great info and advice.

BTW, does anyone know anything about the status of either Scandals (corner of Dlouha and V Kolkovne) or Escape (next to Alcohol Bar). Scandals has been closed a long time now and the space is still empty. A friend of mine mentioned it being mired in debt. Does anyone have more info? Owners? Contact?

Likewise with Escape. It's been closed a while now--anyone have any info?

Both would be great spaces.

Thanks,
F.
[ anonymous ] - [anon] Wed Mar 23rd 17:36 2005 / #18
Scandals will soon be the next Kogo restaurant and bar..Just being refurbished. Escape closed since flood damage.

TGM
todd todd - [profile] Wed Mar 23rd 18:06 2005 / #19
Escape was about to be purchased till the landlords tried some shady stuff, so I hear.
Pavel Kucera - [anon] Wed Mar 23rd 18:47 2005 / #20
Fred, talk to some successes - Max Munson at Jama's who is still going strong after 10+ years. Also swing by U Maleho Glennu and try to track down Glenn Spitaker or the lass that runs Red Hot & Blues - all battle hardened veterans. The point with Scott MacMillan and Tulip is a good one. Talk to him even if you're not thinking about taking that on. Re. suppliers (beer & liquor) whilst exclusivity contracts are illegal, they all do it. Its key (like with all products) to differentiate yourself in a way that is attractive to clients yet is fiscally smart. You will find many product suppliers are happy to deal direct and sidestep wholesalers (Tvin, Jip, Par) etc. who really don't do most importers and distributors justice. Showcasing different products than the same old bloody vodkas, fernets, gins, whiskeys, tequilas etc. could also be a smart move. Mind you, you have to have them, just don't limit yourself. Also, think good quality Czech wines. Jamas again is a good example - Max has Kovacs, Tanzberg etc. and I believe is getting a good response. Personally, cocktail bar in Prague 5 with an eclectic spirit & liquer selection with very affable wait staff (incl. a foreigner or two with personality, like good 'ole Philco) might be the way to go. If you want help with eclectic products and want to talk to people who're been supplying bars etc., send me an email. Pavel.
American in UK - [anon] Sat May 28th 15:43 2005 / #21
Great infomation posted here....
But what if one wants to open a Sports Bar in Prague?

Tom
kr??ska - [profile] Tue Oct 25th 23:23 2005 / #22
Beer IS marked up in some bars. Unless 50 kc for tap doesn't seem marked up.. and it sells very well. It's all about assuming the sale. If you believe your beer is worth it, so will the tourists. They might grumble as they pull their money out, but they still pull it out.
Hitesh - [anon] Wed Jul 5th 19:55 2006 / #23
Hi,

If anyone who is serious enough with capital and knowledge to start a bar/club in prague and have local knowledge then please contact me on hiteshlakhani@hotmail.com. We will be visiting prague soon to meet prospective partners and start a club.
evbk - [profile] Tue Jul 18th 14:55 2006 / #24
Hi Fred, did you open the bar yet? Curious, because I'm planning on relocating here and one of my ideas was to open a place as well. I bartend/co-own a place in NY and have all the same questions you do/did.
Triactol - [profile] Mon Nov 7th 08:36 2011 / #25
Do the PE firms readily finance a startup? what are the other sources of getting a startup food business financed? If i go ahead with a make shift trolley to be stationed in front of a office, does that need some sort of license. Triactol
Martini - [profile] Sun Jan 22nd 17:17 2012 / #26
Hello, are you still loking for business properties? I can help you.

Martin
email: martini.petrasek@gmail.com
ber - [profile] Tue Jan 15th 07:25 2013 / #27
5`Hey everybody, I just took over my first restaurant with my husband here in Prague.You've all spoken about getting a Czech on your team...well...I guess that's also me. I'm native Czech, but raised in Canada, and my experience in the industry is thorough, but very different here than in Toronto. You have all given very good advise...(i have never seen so much theft : (by bartenders, waitresses, managers, or CUSTOMERS in my life) but getting a new s.r.o. with limited funds even as a Czech citizen is no easy task. I have been a bartender my entire life, but ironically enough I'm having a hard time proving it here.If you want to start an s.r.o. in the Czech Rep. you MUST (A) give proof of a higher education in the FIELD you wish to pursue, or show proof that you have a min. of 6 years praxe/experience. Almost every job i've had here has been unofficial a.k.a.=no contract and so on.... Getting official paperwork from Canada??? 10 years ago??? yeah right:) No bank will lend money for a new s.r.o., or for new entrepreneurs so if you don't have a rich family, or someone who really, REALLY believes in you, you should perhaps reconsider... AND PLEASE BE CAREFULL!!!!! WE ALWREADY GOT ROBBED!!!! He pretended to be a police officer, and i (the idiot that i am) saw his badge and it didn't occur to me to question...Needless to say, he took off with our entire till the day after x-mas....MERRY *&%$#! Christmas! after all these years in the business, i fell for such a simple trick....(in Canada we don't even lock our front doors)...I'm trusting by nature... Does ANYBODY really believe that a good heart, an honest intention, and a wittle bit of wuv can make my business work??? we have super prices for food you would normally pay in fingers and toes, and i THINK i'm friendly (and obviously witty)enough.....so what's the secret? why do some make it, and some who are even better don't?????
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