Jolly Roger only $399K in Sosua

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MariaRubia

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Jun 25, 2019
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El Hijo de Manolo said:
There's no goodwill. It's a bar. They're not selling a name or a brand. They day they turn it over it is possible none of the existing customer base will return. Perhaps a few. The best you can do is equipment, inventory and perhaps demonstrate historical revenue that would be worth the risk for some folks that don't understand the business. Your personal relationship with the owners doesn't justify the inflated valuation.
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Normally you take 1 year or 1.5 years' profit and that's how you calculate the value of goodwill, at least I've seen it done here like that a few times. And then you'll add in the value of inventory and equipment. I don't know the bar, but US$ 400,000 seems very high for a rented bar in Sosua. I can't imagine they make more than about US$ 100,000 a year in profit and the equipment and inventory, second-hand value, wouldn't be more than about US$ 50,000.
 
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chico bill

chico bill

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MariaRubia said:
Normally you take 1 year or 1.5 years' profit and that's how you calculate the value of goodwill, at least I've seen it done here like that a few times. And then you'll add in the value of inventory and equipment. I don't know the bar, but US$ 400,000 seems very high for a rented bar in Sosua. I can't imagine they make more than about US$ 100,000 a year in profit and the equipment and inventory, second-hand value, wouldn't be more than about US$ 50,000.
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If they $100 K profit clear - I think I'd buy it.
My guess is it would be closer to $35K, if that ?
 
JD Jones

JD Jones

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MariaRubia said:
Let's just look at the math. You can buy a 24-pack case of Presidente pequeña today at RD$ 1950 at the moment, including ITBIS. So that's a true cost of RD$ 1,652 or RD$ 69 per bottle. If you are selling at 200, then firstly you have to take the propina legal and the ITBIS out, so you have RD$ 156. Take off your RD$ 69 per bottle and you have a margin of RD$ 87. You need US$ 1,400 to pay the rent, which is RD$ 77,000. So just to pay the rent, you need to sell 885 beers. And of course you then need to keep the beer cold, and you'll need AC, so your electricity bill will probably clock in at about RD$ 50,000 per month which is another 574 beers you need to sell. And we haven't talked about paying staff, but you'll need at least two and a cleaner, so let's say RD$ 50,000 for them, which is another 574 beers. So far we're up to 2,033 pequeñas a month. If you say the average punter will drink two of those (probably fair in Sosua as people go from bar to bar) then you need at least 1,000 punters a month, just to cover some basic costs and before you pay yourself anything.
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60-70 beers a day.10 beers an hour. Tough, but doable.
 
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Big

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El Hijo de Manolo said:
I enjoyed the fish and chips, onion rings and bacon cheeseburger on a few occasions. Decent bar food good prices.
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fish and chips, onion rings and a bacon cheeseburger, who said Soaua was not a cosmopolitan town on the cutting edge of culinary exploration.
 
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jd426

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chico bill said:
If they $100 K profit clear - I think I'd buy it.
My guess is it would be closer to $35K, if that ?
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For $100 K profit ? , why would anyone need to go to Sosua to do that ..
if you cant take $400K and make 100K a year in the Country you came from, you are doing something very very wrong. imo
Even an Ice Cream Store can do that, and ANYONE could operate it . even 3 teenage kids.
And I would do Ice Cream long before any Food and Beverage type place .
Jolly Roger sells LIQUOR...
Liquor + entertainment ...
Unless they got 400K in Goodwill from Johnny Fontaine Himself , to appear 5 times a Year .
with Michaels Signature , they got nuthin but a Giant Empty Bar .
 
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NALs

NALs

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MariaRubia said:
The issue is that it's really expensive to operate a business in DR. These days you have to pay the ITBIS and the propina legal. The electricity is crazy expensive. Salaries have gone up a lot in the last year and it's hard to find people who really want to work and have good skills. Food costs are also way up on last year. My costs are up maybe 50% on last year, but my customers expect to pay the same as before. And on top of that you get zero help from the government, all that happens is that you get an endless stream of government agencies expecting you to fill in more and more forms and pay more and more taxes.

It's the same all over the whole of the DR. I was walking around the Colonial Zone with a friend last week looking at how many boarded up restaurants there are. Sad that so many people have invested hard earned cash into these businesses just to lose them a few months later. This is honestly a very very difficult place to run a hospitality business and I completely understand why anyone would want to give up. I do myself quite a lot of the time these days to be honest.
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Many of those restaurants went belly up during or right after the Covid restrictions. Offering delivery is what kept afloat many other restaurants, otherwise they too would be shut by now.
 
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Tom0910

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windeguy said:
Why not wait until they go under and make a deal with the owner of the property?
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C'mon now. They have been in business a long time and are one of the few profitable businesses in Sosua and have been for a long time. They are selling to reduce their work load.
 
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windeguy

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Tom0910 said:
C'mon now. They have been in business a long time and are one of the few profitable businesses in Sosua and have been for a long time. They are selling to reduce their work load.
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None of that has anything to do with what is the best for the new person that would run a business there.
I have no idea why they are selling.
 
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SosuaSam

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MariaRubia said:
Doable on a Friday and Saturday, but on a Tuesday in low season?
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Maybe businesses need to raise prices to stay profitable, but then all the old farts on this board will complain how they won't pay 200 pesos for a beer ($4), since all they want is cheap, cheap, cheap...cheap booze, cheap food, cheap women, cheap accommodation. Maybe the cheapskates need to move on.
 
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Big

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SosuaSam said:
Maybe businesses need to raise prices to stay profitable, but then all the old farts on this board will complain how they won't pay 200 pesos for a beer ($4), since all they want is cheap, cheap, cheap...cheap booze, cheap food, cheap women, cheap accommodation. Maybe the cheapskates need to move on.
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Its very difficult to raise your prices when you have a pirate themed bar and cater to older men wearing bike week t-shirts Daytona beach 2005. I believe someone indicated this place had a "dart" night. Boy I bet that really packs in the high rollers. Now I am not in the restaurant business, however it seems to me on that stretch of road the business theme should be cute waitresses with short skirts and pleasant dispositions.
 
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