Bricks, lies and measuring tape: How to open a bar, part three

Andy Mil

05 May 2016

In the previous two parts of this series on how to open a bar, Andy Mil ran you through finding a venue, as well as all the planning and financials. Read on for the third and final instalment

Building and builders

Builders are a funny bunch – you get good ones, bad ones, cheap ones, pricey ones. Whether you decide to go with one construction company that can handle all the points of the builders’ plan or you source and manage them individually, make sure you get as many quotes as possible and remember, most of the time you get what you pay for. Knowing where to cut corners is the most important part of any refurbishment. Cutting the wrong corners usually results in a crappy venue.

Once a construction/building company has been found, they’ll need to issue what is called a scope of works. This needs to be an itemised breakdown of every single detail – every plug, cable and hinge. You name it, it should be on there. Always discuss with the builders what they are purchasing and what you are purchasing. A very common mishap is when a client will purchase, say, tiles and not account for wastage or cut ways and the works will be held up. Tradesmen are paid by the day – so if you delay them, expect to pay for it.

A scope of works also needs to have completion dates attached. Completion dates are very important for one reason – if a building company starts to slow down and is missing the completion dates of each of the areas depicted on the scope of works, you can start to negotiate the price using a late–completion penalty. It’s worth discussing in advance – on email or in writing – what the late–completion penalty will be. The norm is to use the lost revenue from failing to open, at a fixed rate. But don’t be a dick about it. You need to keep your builders sweet, because if they wanted to, they could utterly ruin you. Seriously.
The scope of works also acts as a cost– and payment–tracker, meaning you only pay for stuff that has been completed. It is normal for a builder/construction company to ask for a retention amount (normally around 15% of the overall works).

Before you hand over any cash, carry out background checks on the people/companies on Companies House to ensure they’ve never been issued with a CCJ in the past.

I’m going to digress a minute to really hammer this point home. CCJs are paid for by the person who submits them, so they’re not thrown about lightly. If a company has a record of one, even if it got thrown out of court, it’s a good sign that they pissed someone off. We had a cowboy builder remove our shop front at Brick Lane and then just hightail it. The follow–on effect was a good five to six weeks’ delay in launching, which, when we had six members of staff on salary and were paying rent, was almost fatal. So run your checks.

Be vigilant: plan a site meeting once a week or more. Mondays and Fridays are good times, so you can check what works will be taking place that week, then see what has been actually completed by the end of the week. Make sure the builders you use are certified and have insurance. Request copies of their insurance certificates and confirm these are real with their insurer. Make a note of when their insurance will no longer apply and when yours will need to kick in.

When it comes to building, never assume, and if you’re not happy with any of the work, tell them straight away. Don’t be afraid to be direct.

When any building works finish, there will be a ‘snag list’. Basically, you never know where cracks will appear until people start walking on it. It’s common practice for the final invoice payment you make to your builders to be paid one to two months after the works have been completed to allow for any snagging. Because realistically, once you’ve paid you builders the full amount, trust me – they will not be coming back to deal with any snagging.

The last and most important thing to remember when dealing with builds is that every last thing has a cost attached. So spell it right out – in a letter or email – that any variations from the scope of works or builders’ plan must be confirmed in writing (so you have a record) and contain an added cost. That way, when it comes to paying your bill and the builder, you don’t find a load of little surprises lurking around the bottom of it.

Venue operations
Venue operation are mostly things that will come under fixed or variable overheads in your P&L. Here are some things people often don’t adequately consider:

-Sanitary bins and sanitary waste: Sanitary bins are charged per bin and the rate depends on how many times a year you’d like them to be collected.

-Fire extinguishers: Chubb is the most common producer and offers a rental programme that is very cost–effective, as it includes the servicing.

-PDQ Machines: Shop around, and consider the following: what model terminals are they, what’s the charge to you, and is it per transaction or a flat percentage? And what’s the rental cost on the machines?

-Utilities: You can shop around for the best rates on electrics; water is pretty fixed.

Go and buy a Leatherman – a real one. And a strong tape measure. I use both of these things on a daily basis, probably more than my bar blade.

-PPL and PRS: These give you the right to play recorded music in a public space. It’s easy to confuse them, but you’ll almost always need both.

-Insurance: Do you need contents, building or both? Make sure you read the details very carefully as some insurers sneak things in – for us, we recently discovered that our alarm system needs to be monitored by a specific (and expensive) company, or we won’t be covered.

-Business rates: Basically, council tax for commercial properties. This is normally 44p in ever £1 of the rateable value.

-Waste collection: Again, shop around – but bear in mind that it might come down to what are simply the best collection times.

This is the third and final part of Andy Mil's series on how to open a bar. Click through for part one and part two

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