More and more people are drinking wine in
So how can you take advantage of this? Perhaps you could start exporting and/or importing wine and join the long queue of competition that has lifted
What is it?
“The definition of a wine bar is quite blurred”, says Michael Davis of Virtualpubs.com, a site that helps people buy and sell licensed properties in the
Wine bars also vary from pubs in others ways. There is generally a larger selection of wines but beer is now also sold in many outlets. The clientele is often younger, from 21- to 35-years-old. There is also a fashionable element to some wine bars: many people frequenting them to be seen in the right place and with the right people. So you will have to decide what image you wish to portray.
*Photo courtesy of Thomas Hawk
With no strict qualifications needed to enter the wine trade
Communication is a skill you simply cannot learn. So before jumping the gun, this is where your first taste of working with the public and serving them wine, beers and spirits should begin, according to
If you don’t have the experience, now is the time to go and get some. A period spent working in a wine bar will help to focus your own plans for the business, as well as giving you an idea of what music people like to listen to. You’ll also find out what wines and drinks people prefer and – more importantly – get an insight into the type of clientele you will be dealing with. Davis points out that knowing your market is vital: “You will need a knowledge of what’s happening on the street and what people in that area want, as well as learning how the younger set like to relax in a wine bar.”
Another thing to consider: many wine bars now operate a catering element, where a high-quality food operation is added to high-quality drinks. To utilise this additional source of revenue you will need to either have some catering experience yourself or hire outside help, which, with a high turnover in catering positions, may be a costly alternative – so think hard about catering.
Where to start
Your starting point in a business should always be 'do I really want to do it?' If you do and are driven by the idea, then gaining some kind of experience should be the starting point. Stephen Gould, director of recruitment and training at the Punch Pub company, one of the largest independent operators of leased and tenanted pubs in the country, says that buying a premises and starting from scratch may be putting a lot of risk in too early. He says: “A good way to gain experience is to become a manager of a wine bar in a leased or tenanted operation. You can then input your own ideas and judge the market before taking the plunge.”
Once that experience is in place you will have to balance the business side of things, which means preparing a business plan. This will involve setting out how much money you need to fund your project, where you intend to locate, and what you plan to do that is different from the other licensed premises in your area.
Gould adds: “This is quite a refined sector so take your ‘big idea’ and test it against the following criteria:
* the right location
* an understanding of the marketplace and the demographics of your area
* competitor analysis - who’s doing what well and how many licensed properties there are surrounding your business
* how that level of service can be improved on
* the local economy, employment and whether people around you have enough disposable cash to spend in your wine bar.
Once you have decided on the location, the size of the premises is important. Do you want to serve a hundred people or a thousand? Who will be your main customers and how will you make them interact?
“If you only have two people in your bar who are at separate ends of the room, for example, you need to find a link between them both in order to get them talking and bring more people into the bar. This is the secret to business – making your customers interact and feel part of the whole atmosphere,” comments
But to gain this atmosphere you will need to sell the right products. How large a selection of wines and other alcoholic and non-alcoholic drinks do you wish to sell? If your knowledge of wine is limited, then stick to what you know best. If you are more of a connoisseur and decide the market is craving vintage wines, let your imagination run riot and use your strengths as much as you can. Make sure to control your stock levels and monitor how many wines are open at the same time.
Before you start out it is also essential that you get the right supplier(s) and the best procurement deal for equipment, food and drink. You won’t have enough time when things get going. This is particularly important if you are planning to serve food on the premises. Fresh food will be more costly so scan the area for the best deal and above all, don’t take the first offer that’s put on the table.
As well as the above criteria, you’ll need to get the look and feel of your wine bar right first time. Will you choose to have wooden floors, low lighting, soft music and plain coloured walls or go for a more vibrant feel?
Gould comments: “The best people I’ve seen run licensed properties are the ones that have known how they want the wine bar to look like from the outset. They have noticed this is not just a retail proposition but that it is the whole package that counts. It is the quality of the bar, the toilets, pricing, standard of service, the fit-out which includes the décor and the lighting, a high standard of catering and friendly staff as well as a warm atmosphere that makes a sustainable business. If you fall down on good service then it will dilute the whole operation.”
Rules and regulations
To sell alcohol for consumption on your premises you must have a licence, which is awarded by the local magistrates. You must be over 18 years old, have no criminal record, prove that you are a ‘fit and proper’ person and understand your legal and social responsibilities.
Most licensing benches advise candidates to hold a BII (British Institute of Innkeeping) National Licensee’s certificate. Although this is not a guarantee of success, it will prepare you for the application. If you plan to develop the catering side, you will also need to contact the local environmental health department to ensure that you meet their standards.
If you are entering a tenancy or lease the landlord will often run an induction course for people. As well as covering the licence application, this will also introduce you to all the skills you need to run a business successfully, including legal skills; financial management; marketing; beer and cellar skills and food hygiene. There are also training courses for experienced licensees.
Although you will be a wine bar owner you are also an innkeeper, and it is perhaps worth considering becoming a member of the BII. This is the professional body of the licensed trade with 15,000 members benefiting from business advice, free helplines, credit card savings and subsidised training courses.
Some wine bars are bought outright (this is known as free trade), some are managed or franchised under a brand name while others are leased from private companies and brewers. Many are also run by private bar owners and simply rented by a private landlord. So, the capital you put in could range from £20,000 to £200,000 plus. However, in order to ascertain how much you need we have broken down the average startup costs or that you can expect to pay:
Purchase of the lease: £5,000 to £80,000 - If you are purchasing an existing business you will have to pay for the existing term of lease remaining. This figure is very much dependent on the value of the business and your negotiation. If you are buying the premises out right then expect this figure to double in larger cities or London
Fixtures and Fittings (F&F): £3,000 to £30,000 – Many suppliers will supply containers or branded display items such as coolers and dispensers free of charge with certain goods and stock. The purchase of F&F may have tax implications. Speak to your accountant for more information.
Valuer's fees: £800 to £1000
Agent's fees: Approx £500
In-going stock: £2500 to £7000
Dry Stock (food): £500 to £2000
Till rolls and cleaning materials: £100 to £200
Cost of stock take: £100 to £200
Glassware: £500 to £1200
Rent leases (if you rent): £500 to £6,000 – You will be asked for a month's rent in advance for new leases or an apportionment of the current month for assignments
Till floats and change drawer: £800 to £1200 – three tills at £250 plus £300 change
Insurance premiums (F&F, stock, public & employer's liability): £250 to £450 – average cost of annual premium
Buildings insurance: £250 to £1000 – Average cost of annual premium
Surveyor's fee: £300 to £800 – Cost of full structural survey
Solicitor's fees/licensing: £750 to £2000 – should cover all legal fees
General working capital: £3,000 to £10,000 – this will cover unforeseen costs such as rentals on equipment
Training: £750 to £1250
TOTAL: Prices will vary so we have given an estimate figure of between £20,000 and £150,000 but this will rise considerably if you buy the property outright
How much can I earn?
Making a profit in business is naturally your primary target but if you’re starting from scratch getting a return on your investment may take longer than you think, particularly if your outlay runs into hundreds of thousands of pounds. Davis suggests that you can make up to 60% gross profit from running your own wine bar but that after costs and wages, for example, are taken out then the turnover figure is more likely resemble between 8 to 10%.
So, before dimming the lights, putting on a selection of easy listening tracks and serving Pina Colada’s with paper umbrellas to Del Boy lookalikes, make sure you get your business plan down to a tee and give a venture such as this one a huge amount of thought – only then will you be able to toast to your own success.