When Oksana Romanyuk came across a basement in central Kyiv for rent, she thought “this is it - this is where I will open the bar.”
It was the right decision. Opening a bar turned out to be profitable for Romanyuk even amid economic turmoil (or, perhaps, because of economic turmoil). In one year, she open a bar called Pod Asfaltom Plyazh (Beach Under The Pavement), made some money on it, and sold it.
“It is a common fact that what people do during a crisis is drink alcohol and have sex,” Romanyuk said.
Place
Finding the right location is the starting point. Romanyuk rented the basement of a building on Yaroslaviv Val Street, and signed a contract that capped annual rent increases to 2 percent. She also inserted a clause stipulating the payment of compensation if the landlord broke the contract. The amount of compensation was to be at least be equal to the start-up capital of the bar.
“It’s better to buy, obviously. But all of my friends who run businesses – they rent,” she said.
The rent came to Hr 20,000 ($800, at the current exchange rate) per month. But Romanyuk and her husband also had to pay for repairs, including putting in new wiring and toilets. The place was in such bad shape that Romanyuk spent $20,000 on doing the place up, including the kitchen.
Business plan
Romanyuk and her husband developed their business strategy after seeking advice from friends. Initially, they wanted to serve only drinks and no food, but they changed their minds when most of their friends told them they wouldn’t come to a place that didn’t serve food.
“People like to eat, and they’re used to having appetizers,” Romanyuk said. They opted for vegetarian snacks such as hummus. The food was sold at a loss – the profits came from drinks sales. But the food on offer also wasn’t to many customers’ taste: “We lost around 60 percent (on the vegetarian food), as our nation is definitely a meat-loving one,” Romanyuk said.
Permits
To open a bar or restaurant one needs to register a company or a private enterprise and obtain permits from the Sanitary and Epidemiological Service and the Fire Inspection.
Romanyuk and her husband registered the bar in their names. One enterprise was launched to operate the kitchen, and another to sell alcohol.
A license to sell alcohol is valid for one year and costs Hr 8,000, although payments can be made quarterly. All alcoholic drinks must be bought from licensed providers.
The sanitary permit proved hard to get. Romanyuk said she and her husband had wanted to do everything above-board when opening the business, but the sanitary and fire inspection requirements were written in such a way that the premises simply could not meet all specifications. For example, the inspectors required three exits, but Romanyuk couldn’t break through any walls to make another door to the rented basement, as the walls were all load-bearing.
Profit
Initially, the bar’s revenues were only enough to cover staff salaries, and it took Romanyuk and her husband six months to return their start-up capital.
But after that, the bar netted $4,000 per month.
“If you have all of the permits, cool cocktails and a cool place, people will definitely come to you,” Romanyuk said. “There’s no magic to it.”
The good location helped. Pod Asfaltom Plyazh is near a hotel in the diplomatic district of the city center. The clientele turned out to be business people, often foreigners, 45-years-old and older. “They adored us” and were relaxed, Romanyuk said.
How to sell a bar
Romanyuk sold the bar without even having to advertise. But letting the business go was emotionally harder than she had thought it would be. She had come to consider the place to be her home, a place she and her husband had fixed up with their own hands.
If the bar is registered as a private enterprise, that enterprise has to be wound up and another one registered by the new owner under a different name. Re-registration is mandatory when selling a business in Ukraine.
Satisfaction, disappointment
When the bar became profitable, Romanyuk said it seemed as if she was earning money without working. However, no business runs completely smoothly. Her biggest disappointment came when clients started stealing decorative items in the bar, such as the ornamental Buddha statues she had brought in from Asia. To prevent theft, they even had to screw down air fresheners.
Retaining good staff was also a problem. When people quit, it was “like losing a family member,” Romanyuk said.
“The most important thing is to imagine your bar when everything has being stolen and broken. Imagine living through that,” Romanyuk said. “Now you’re ready to open a bar.”
