Post: #1

Hey, all I was wondering if anyone had any experience with Americans that have started venues in Ukraine. I speak Russian fluently and just signed up for a 50 week course in Ukrainian starting October in Kiev.

I've owned two bars in South FL both of which I recently sold to a investment group.

I'm 32 y/o and now looking to do something adventurous. I've been googling a lot but seem to just find unseasoned business people talking about the stresses of starting in Ukraine as they were not previous business owners in the West, I could not imagine starting a business in a foreign country without at least some past experience in another where their language skills don't fit.

I also am tired of the heat and have no interest in living in the states anymore. I personally have never been a fan of Poland although I know it's a better spot economically.

To be very honest I'm really just looking to start something that will just supplement my living expenses there and also create socialization channels which is pretty much why I started my bars in South FL to begin with. I just got lucky down the line.

More fun to socialize in a place you own and have food and drinks at cost, at least in my opinion.

Post: #2

Were your two other bars profitable besides the sale to the investment group?

Profit margins are razor thin for bars in EE. Nothing like the United States.

I worked in management and also did consulting for venues in the US and Mexico. I mostly help unprofitable bars become profitable. After planning and running the numbers for an EE bar I wanted to start I dropped the project because of the extremely thin margins. In the US you can sell a cocktail for $10 and a shot for $6. Many bars in EE sell $1-2 shots and $3-4 cocktails but the cost of liquor is roughly the same as US. Sure rent is cheaper but employee wages can be higher since EE staff don't make enough (if any) from gratuity.

Run the numbers yourself (you were an owner so you should know) and you'll see that EE bars don't run on the same model as their US counterparts.

Post: #3

(07-08-2017 06:19 PM)PainPositive Wrote:  Were your two other bars profitable besides the sale to the investment group?

Profit margins are razor thin for bars in EE. Nothing like the United States.

I worked in management and also did consulting for venues in the US and Mexico. I mostly help unprofitable bars become profitable. After planning and running the numbers for an EE bar I wanted to start I dropped the project because of the extremely thin margins. In the US you can sell a cocktail for $10 and a shot for $6. Many bars in EE sell $1-2 shots and $3-4 cocktails but the cost of liquor is roughly the same as US. Sure rent is cheaper but employee wages can be higher since EE staff don't make enough (if any) from gratuity.

Run the numbers yourself (you were an owner so you should know) and you'll see that EE bars don't run on the same model as their US counterparts.

Pain Positive is....John Taffer:

Post: #4

Fair enough. Putting aside the money issue, however, does being a bar owner in EE come with the social status/pussy potential it normally would in the states?

Post: #5

If you do decide to go this route, and take this from someone with zero experience in this endeavor...take note of all the successful Westernized bars in the major cities like Kiev.

Almost every venue I can think of that was always full met the following criteria:

- Novelty items for Ukraine, such as guacamole
- Higher prices; they're Westernized enough that the Western dudes with cash come (simply because it's somewhat familiar to home) and bring the Ukrainian girls, then the girls get hooked and eventually start bringing their friends
- Or, fancier and novel cocktails you wouldn't often see in most typical EE bars.

Basically, what I'm saying is - if you want to own a dive bar, as someone else said - good luck. Only serving booze will not be much profit. But if you're able to tack on some of the novel stuff that gets people in the door, or makes them save money up and come for an experience, I'd see that having a far higher chance of success.

Examples (Kiev): Milk Bar, The Burger, The Bar, Dogs & Tails

As far as social status, depends how involved you are and want to set it up. I ended up in back VIP room of The Bar in Kiev once, and I'll tell you - it was a whole different world than you saw in the public area. I have no doubt the owner was swimming in it if he wanted it.

Post: #6

I don't have on the ground knowledge, but my impression was that owning a bar in Ukraine would probably attract the attention of the local wise guys. Something to consider.

Post: #7

What about the mafia and having to pay into their racket?

Edit: Rawgod beat me to it.

Post: #8

You will need a Ukrainian business partner or it will be a major headache, otherwise it's doable.

Post: #9

(07-09-2017 04:09 AM)BangBoy123 Wrote:  You will need a Ukrainian business partner or it will be a major headache, otherwise it's doable.

And bank accounts. And biz licenses. And permits.

All done with Ukraine's bureaucracy.

Post: #10

Why not Moscow?
Rent will be more expensive sure, but you can ask western prices and have clients all days of the week if you target the right people. And Russian people are willing to pay a big premium for upscale bars that offer some social status.

In Kiev local people don't often go to bars (or even go out for that matter), and foreigners are mainly there in the three summer months so I don't think it's a good investment.

Post: #11

OP if you want to know if owning a bar will get you pussy in EE the short answer is yes. You will get lots of easy pussy. You'll make friends and fuck a lot of hot women if you have a decent spot that's not a dive.

Post: #12

(07-09-2017 04:09 AM)BangBoy123 Wrote:  You will need a Ukrainian business partner or and it will be a major headache.

Corrected.

Also, it will only be a major headache if the local mafia don't break OP badly enough that OP can't feel headaches anymore. Because he's dead.

This is a very bad idea. It's hard to wrap one's head around the differences in the business climates of other countries and the U.S., unless one's family has actually left said countries for that very same reason or had some other kind of first hand interaction with that kind of environment.

Post: #13

I've worked for bars that had heavy cartel presence in Mexico. Before I was GM I was head of security and we made arrangements that pleased everyone. Everyone did their thing and there were no problems. The Serbian mob works the same way.

Every shady organization I've come into contact with just wants to get paid. "Breaking someone" is bad for business.

Unless you have some insight or personal experience with how this works in Kiev I'd say you're assuming a lot about how these things work. Maybe too many gangster movies.

Please correct me if I'm wrong because I'd be interested to hear how the other expat owned bars operate there.

Post: #14

(07-09-2017 07:41 PM)PainPositive Wrote:  I've worked for bars that had heavy cartel presence in Mexico. Before I was GM I was head of security and we made arrangements that pleased everyone. Everyone did their thing and there were no problems. The Serbian mob works the same way.

Every shady organization I've come into contact with just wants to get paid. "Breaking someone" is bad for business.

Unless you have some insight or personal experience with how this works in Kiev I'd say you're assuming a lot about how these things work. Maybe too many gangster movies.

Please correct me if I'm wrong because I'd be interested to hear how the other expat owned bars operate there.

I'll gladly correct you, it might save some naive guy from bodily harm. The assumptions you're making are wrong. Everyone does not just "do their thing and there are no problems," everything is enforced with violence. "Breaking someone is bad for business" is a thought that's the product of a logical mind, which not all criminals have.

Some of your assumptions are the ones that lead naive young men to enter organized crime themselves to begin with.

Here's one assumption made by naive young guys that join these criminal groups:

"I'm one of the bad guys now, I'm a member of the group, no one will mess with me now, and I'm going to get paid."

Here's the reality:

"There are many factions of evil. You've now joined one. By no longer being a civilian, and expressly joining one faction, you've now made yourself an explicit enemy of every other faction, as well as the state itself and the factions of the state that are bought off by other criminal factions. Your lifespan, and most likely that of your family as well, will be shorter as a result."

If there's one organization controlling things, it can pan out as you described, for as long as that lasts (that's the key), but as soon as there's a leadership crisis, it's every man for himself, and when that happens, people get killed all over the place. If the organization is in a state of instability for too long, to where it splinters irrevocably into various factions, then that's where you get racketeering gone wild, with people bled so much (sometimes not just metaphorically) that entire sections of a city, including the bars therein, become shuttered up and abandoned.

By opening a business in an environment where the rule of law is not very strong, what you're doing, in addition to taking the usual business risks, is betting that organized crime will remain stable, and benign, for the entire life of your business. This is not a bet I would make, because I don't want to attach my fortunes to the fortunes of organized crime, I want to simply run numbers and marketing campaigns and make people's lives better by offering a quality product or service, not wonder if someone high up in organized crime having a heart attack is going to lead to visits to my place of business or my home by violent thugs intent on extortion.

That's how that works. Again, if you think every member of organized crime is emotionally and mentally stable enough to not kill the goose that laid the golden egg, you are wrong. While some may be intelligent enough parasites to not kill the host, many are not.

Your bar experience was under some tranquility, that's great, but that's not guaranteed to last forever, so don't think that's always the state of affairs. In sum, in addition to having to make profit to keep the business intact, you also have to make enough profit to satisfy your new boss, the psychopath at the head of your local organized crime syndicate. By doing this, you basically take the chance of becoming someone's bitch, instead of your own man, and also, of losing your limbs or of having your family hurt or killed.

Most people reading this are not "Billy Badass," despite what they might think, and even if they are, there's nothing badass about getting your testicles or other appendages cut off.

F*** that. If you're going to start a business like a bar while living in Ukraine or a place like it, unless you speak the native language and have lifelong local connections there with considerable weight, there's definitely an added, completely unnecessary, level of mental, physical, and financial risk.

Post: #15

(07-09-2017 07:41 PM)PainPositive Wrote:  I've worked for bars that had heavy cartel presence in Mexico. Before I was GM I was head of security and we made arrangements that pleased everyone. Everyone did their thing and there were no problems. The Serbian mob works the same way.

Every shady organization I've come into contact with just wants to get paid. "Breaking someone" is bad for business.

Unless you have some insight or personal experience with how this works in Kiev I'd say you're assuming a lot about how these things work. Maybe too many gangster movies.

Please correct me if I'm wrong because I'd be interested to hear how the other expat owned bars operate there.

How was your relationship with them?

I knew some folks who owned a strip club in Guanajuato. They had a bunch of big titted girls from Colombia, Venezuela, some from Ukraine, Russia, Czech Rep, and other places. When the Maruchan Army (Zetas) moved in, they just wanted their weekly payment (Cuota). With time they started congregating there more, then demanding free drinks.....then wanting to fuck the sluts, move their drugs around, etc. At the end, they took over the place, turned it into a strip club/whorehouse, forced the owners to sign over it legally, and shot one of the owners as a warning to not tell the authorities. The girls were moved around to other strip clubs. Biz went downhill from there and not many people went there since the prices were high and sometimes the guys would do stupid shit while drugged/drunk.

But then again, after the OG Zetas died (#1-31) the Maruchans became undisciplined and known for not giving a fuck about many things.

Edit: Not trying to create and argument. Just want to see how was your experience, you managed it, and it turned out. Biz management in risky places is one of my fave things to learn about.

Post: #16

(07-09-2017 09:20 PM)Cattle Rustler Wrote:  

(07-09-2017 07:41 PM)PainPositive Wrote:  I've worked for bars that had heavy cartel presence in Mexico. Before I was GM I was head of security and we made arrangements that pleased everyone. Everyone did their thing and there were no problems. The Serbian mob works the same way.

Every shady organization I've come into contact with just wants to get paid. "Breaking someone" is bad for business.

Unless you have some insight or personal experience with how this works in Kiev I'd say you're assuming a lot about how these things work. Maybe too many gangster movies.

Please correct me if I'm wrong because I'd be interested to hear how the other expat owned bars operate there.

How was your relationship with them?

I knew some folks who owned a strip club in Guanajuato. They had a bunch of big titted girls from Colombia, Venezuela, some from Ukraine, Russia, Czech Rep, and other places. When the Maruchan Army (Zetas) moved in, they just wanted their weekly payment (Cuota). With time they started congregating there more, then demanding free drinks.....then wanting to fuck the sluts, move their drugs around, etc. At the end, they took over the place, turned it into a bar/whorehouse, forced the owners to sign over it legally, and shot one of the owners as a warning to not tell the authorities. The girls were moved around to other strip clubs.

^^ This.

Repped.

Post: #17

(07-08-2017 06:19 PM)PainPositive Wrote:  Were your two other bars profitable besides the sale to the investment group?

Profit margins are razor thin for bars in EE. Nothing like the United States.

I worked in management and also did consulting for venues in the US and Mexico. I mostly help unprofitable bars become profitable. After planning and running the numbers for an EE bar I wanted to start I dropped the project because of the extremely thin margins. In the US you can sell a cocktail for $10 and a shot for $6. Many bars in EE sell $1-2 shots and $3-4 cocktails but the cost of liquor is roughly the same as US. Sure rent is cheaper but employee wages can be higher since EE staff don't make enough (if any) from gratuity.

Run the numbers yourself (you were an owner so you should know) and you'll see that EE bars don't run on the same model as their US counterparts.

My two places were profitable, actually strategically profitable within their first year because because of a lot of factors.

I'm not quite sure why razor thin margins turn people off of curtain businesses, I mean if you're a low volume establishment then yeah that would be a major problem. 20% margins is fairly easy to do no matter were you're at. Anything over that which I'd see a lot of people do usually prices you out the market and causes you to have insane fluctuations in your monthly gross. Most common mistake I see in the food and beverage business.

Also by the way I ran $1.50 shots and $3 dollar cocktails $2 domestic $3 import in South FL in a high rent high traffic location of Miami to be exact. Even during a Hurricane we were packed unless the county forced us to close. Our entire menu which consisted of only two items, hotdog and fries or burger and fries $3.50 for either combo served until close.

I never changed those prices (those were always prices, not specials) in fact I used to market it that way. I never had a bad month in business except the first 3 - 6 months once word got around we cleaned up every single day.

I can't count how many people told me daily I could charge even $3 - $10 more and get away with it. But they didn't realize most of my traffic were people that just blew $500 dollars in a night on Ocean Blvd.

Correct me if I'm wrong but I feel like those are doable Kiev prices? and with a 18% tax rate and lower cost labor, rent and food ingredients I'd assume even if I was not as busy as I was in Miami it would be doable.? Not saying I know for sure, just guessing

Post: #18

(07-09-2017 01:32 AM)Cattle Rustler Wrote:  What about the mafia and having to pay into their racket?

Edit: Rawgod beat me to it.

There is something called black money, this is not exclusive to Ukraine, I've known US business owners operating in shady areas of cities in the US set up for this as well.

Sometimes this can create an advantage if you know how to negotiate.

I don't want to come across as naive but from my own personal experience I've always found criminals more reasonable than the govt. I can only imagine a govt run by criminals to be some sorta advantage when you need something taken care of. Can't count how many times I wish I could have just bribed my way out of some stupid violation in the US.

Post: #19

(07-09-2017 12:51 AM)This Is Trouble Wrote:  If you do decide to go this route, and take this from someone with zero experience in this endeavor...take note of all the successful Westernized bars in the major cities like Kiev.

Almost every venue I can think of that was always full met the following criteria:

- Novelty items for Ukraine, such as guacamole
- Higher prices; they're Westernized enough that the Western dudes with cash come (simply because it's somewhat familiar to home) and bring the Ukrainian girls, then the girls get hooked and eventually start bringing their friends
- Or, fancier and novel cocktails you wouldn't often see in most typical EE bars.

Basically, what I'm saying is - if you want to own a dive bar, as someone else said - good luck. Only serving booze will not be much profit. But if you're able to tack on some of the novel stuff that gets people in the door, or makes them save money up and come for an experience, I'd see that having a far higher chance of success.

Examples (Kiev): Milk Bar, The Burger, The Bar, Dogs & Tails

As far as social status, depends how involved you are and want to set it up. I ended up in back VIP room of The Bar in Kiev once, and I'll tell you - it was a whole different world than you saw in the public area. I have no doubt the owner was swimming in it if he wanted it.

Thanks for your insight, I've been to The Burger before, I can tell you that place required some serious start up capital but it was good.

I personally would not want to get into the trendy / high end type bar / restaurant, it requires a talented chef and a talented kitchen crew along with highly talented bartenders all of which if they miss a few days or they move spots can take you under fast. I saw a lot of hipsters, trustfund babies and very rich guys trying to break into the food and beverage scene in Miami die quick deaths this way.

Higher end trendy places have usually 3-5 year life spans in general, then they have to reinvent to keep trendy. I'm more of a Mr. Trusty type of business man, think (NYC 99 cent Pizza)

My business model in South FL was kinda a blend of both worlds. I made my places look trendy but kept a very simple menu of only 2 items. And drinks were what you asked for. Prices were bottom of the barrel (always) trendy places around me closing consistently many of them served amazing food and cocktails and I'd always refer them business. If you wanted a $15 burger, a $10 dollar cocktail or a $5 beer I was not your place.

I never claimed to be the best hotdogs, burgers or drinks in town, but I was always the cheapest and that kept me very busy and profitable in fact the service people from all the high end and trendy spots pretty much lived in my joints after hours.

I worked in the high end and trendy places before I went into business for myself both front, back and management and they all struggled their first couple of years, the ones that made it had short life spans and were consistently having to out market the next or cycle chefs. You need nerves of Steel, deep pockets or be a celebrity chef to withstand that market on the long haul.

I can teach anyone to cook hotdogs, burgers and fries at volume (kinda hard to screw up). And if they quit leave or don't show up I can find someone else in a matter of a few hours. Also what happens if my badass specialty bartender quits? I'm screwed that's what.

I like your Guacamole observation, cheap and easy I could give a pensioner an extra $25 a week to mash avocados for me part time. Maybe I should up my menu to Hotdogs, Burgers, Fries and a Guac app. Throw in a Karaoke set up to boot to attract drunk Ukrainians and Foreigners. Karaoke never failed me.

Post: #20

"Prices were always bottom of the barrel..."

Exactly, and as some other people pointed out, that bottom-of-the-barrel point in Ukraine is...well, really really bottom. That seems like a tough game to play, trying to skate a razor thin profit margin on vodka shots if you get what I mean.

Frankly, there is no decent Mexican in Kiev. One restaurant but from what my girl told me it shut down. There might be a great market for basic quesadillas, tacos and nachos that you could tack on with guac/burgers/fries and could set you apart from the other joints. I've got a post on some of my favorite restaurants in Kiev (https://ukraineliving.com/12-best-restau...in-kiev/), might be helpful to poke around their TripAdvisor page and see what's working. All those places were always all jammed full.

Post: #21

(07-10-2017 01:10 AM)This Is Trouble Wrote:  "Prices were always bottom of the barrel..."

Exactly, and as some other people pointed out, that bottom-of-the-barrel point in Ukraine is...well, really really bottom. That seems like a tough game to play, trying to skate a razor thin profit margin on vodka shots if you get what I mean.

Frankly, there is no decent Mexican in Kiev. One restaurant but from what my girl told me it shut down. There might be a great market for basic quesadillas, tacos and nachos that you could tack on with guac/burgers/fries and could set you apart from the other joints. I've got a post on some of my favorite restaurants in Kiev (https://ukraineliving.com/12-best-restau...in-kiev/), might be helpful to poke around their TripAdvisor page and see what's working. All those places were always all jammed full.

From what I saw there my prices in Miami are close to bottom of the barrel in Ukraine and I was in super high rent area's, also cheap prices does not mean bad quality, if done right it's just keeping things simplistic versus complicated and making it easy for people to choose. On another note maybe the fact I'm American could help as I'm doing American food, kinda like how it works in America, authentic usually sells better everywhere. Also I don't see that having been able to do $1.50 shots and $3 dollar cocktails $2 domestic $3 import and two items, hotdog and fries or burger and fries $3.50 for either combo served until close and turn a profit in a high rent area like Miami where my cost, rent, labor, federal taxes is much higher than Ukraine how I'd fail to turn a profit offering what are seemingly normal prices in Ukraine. I might be completely wrong though. Also those prices I was offering in Miami South Beach/Downtown I was getting 35% - 25% margins on food alone and 50% - 40% margins on drinks on average.

I don't know a thing about Taco's if I could convince one of my Mexican friends to join in a venture in Ukraine I'd do Tacos in a heartbeat. Kinda like fish Taco's in Miami, people use to tell me why am I not doing that as they sell so well? They actually don't because good places lose mountains of money on their loss in fish due to being unable to accurately forecast daily sales. I would say there are 50 places in a one mile radius you can go get a Fish Taco same with Burgers. I know how to make good burgers and hotdogs, that's about it. Also Beef keeps longer than Chicken which is the reason I never offered a chicken sandwich which is another item you need for Tacos. In which I'll play my own devils advocate and say land is cheap outside of Kiev maybe I could raise my own chickens, I would have done a chicken sandwich if I had that option in Miami close to my businesses.

If you want a good chain representation of the business model I use see In and Out Burger or White Castle but with alcohol sales. Small menu, cheap, hell I was cheaper than McDonalds and still rolling in a decent profit.

Your point is taken but I'd be wary of creating a menu of more than a couple of items, Tacos require lots of ingredients (veggies and fresh herbs) and many variations i.e. more perishable items like in fact tons of items that have a shelf life of only a couple days to still taste fresh which means more loss requiring you to have to not only deal in volume but take on a lot of losses if you fail to meet the volume.

My original post was not really asking to help me build out a menu although I appreciate your insight. I'm more looking for better info on starting a business in Ukraine and if there are people on the forum that know of other expats doing it there and doing well.

Post: #22

Just an observation here, I have no practical experience owning and working in restaurants.

However, I've always been intrigued by the business aspects of opening an expat place in Asia. I decided a long time ago that if I ever did so, I'd create a food menu consisting of Western food that could be created out of cheap, local ingredients. For example, tomato sauce can be created cheaply with the most affordable of ingredients. The major expense would be labour.

Hamburgers, as well, are created from scratch with ingredients that are locally available and cheap anywhere in the world. Same goes for French fries (although if I was running a place, I'd opt for mash potatoes as a healthy alternative that requires no expensive fryers or special attention. Just make a big batch and heat up as necessary. Mash potatoes are one thing where heating on demand doesn't noticeably impact the taste and quality).

For drinks, I'd stick with bottled beer (since it requires very limit labour to store and prepare) and drink pitchers of various punches, like Sangria. Once again, simple and cheap to prep, as the server would simply have to pour from a pitcher into a glass (with fresh pitchers being made when their was a lull in service demand) and carry it to a table.

Obviously, for the high end crowd who wants something special, having cocktails made individually on demand is a big selling point, but it also requires hiring experienced staff or having a strong training program and also slows down the speed of service.

If I were to open a place, it would be to offer a taste of Western cooking, designed to be speedy and affordable. A place where people would be comfortable visiting regularly, with healthy enough and affordable enough food that they could justify it.

Post: #23

(07-10-2017 03:43 AM)Suits Wrote:  Just an observation here, I have no practical experience owning and working in restaurants.

However, I've always been intrigued by the business aspects of opening an expat place in Asia. I decided a long time ago that if I ever did so, I'd create a food menu consisting of Western food that could be created out of cheap, local ingredients. For example, tomato sauce can be created cheaply with the most affordable of ingredients. The major expense would be labour.

Hamburgers, as well, are created from scratch with ingredients that are locally available and cheap anywhere in the world. Same goes for French fries (although if I was running a place, I'd opt for mash potatoes as a healthy alternative that requires no expensive fryers or special attention. Just make a big batch and heat up as necessary. Mash potatoes are one thing where heating on demand doesn't noticeably impact the taste and quality).

For drinks, I'd stick with bottled beer (since it requires very limit labour to store and prepare) and drink pitchers of various punches, like Sangria. Once again, simple and cheap to prep, as the server would simply have to pour from a pitcher into a glass (with fresh pitchers being made when their was a lull in service demand) and carry it to a table.

Obviously, for the high end crowd who wants something special, having cocktails made individually on demand is a big selling point, but it also requires hiring experienced staff or having a strong training program and also slows down the speed of service.

If I were to open a place, it would be to offer a taste of Western cooking, designed to be speedy and affordable. A place where people would be comfortable visiting regularly, with healthy enough and affordable enough food that they could justify it.

Pretty spot on observation having never been in the business.

I met a American guy in Bangkok a few years ago that was/is (not sure if he's still there) on average doing 10k - 15k a month USD (net) doing $1 Pizza slices. He was running a brick and mortar joint near the beach and in a high traffic area. Hung out with him a few days and watched his operation one day and it was no joke. He was able to do so much volume other local businesses were buying from him and marking up his prices.

Post: #24

(07-10-2017 04:06 AM)FFL Wrote:  

(07-10-2017 03:43 AM)Suits Wrote:  Just an observation here, I have no practical experience owning and working in restaurants....

Pretty spot on observation having never been in the business.

I get the feeling, based on your posts in this thread that we'd work really well together if fate put us into business together.

There's lots of approaches to running a food and beverage business, but your strategy really resonated with me.

Cooking classes are one of the many business activities that I'm involved with and I see my lack of professional experience as a huge benefit, because the first thing I do when creating a new lesson plan is simplify all the recipes I find online until they are something I'd feel comfortable doing.

If I, as a casual amateur cook feel comfortable with the complexity of a recipe, then it's likely students taking the courses I design will as well.

My thought is that if I were to go into the restaurant business, any success would be due to a desire to make things simple, and not a flair for the dramatic, an ego in desperate need of fulfillment, raw talent or specialized skills/training.

Some of those things my be valuable in the fine dining scene, but that would never be my scene.

Post: #25

Do people really care about healthy food in asia?