Cafe Exedra

[QUOTE=Rockin Bob]Just in case anybody was wondering.

[url]http://en.wikipedia.org/wiki/Exedra[/url][/QUOTE]Thanks for all the info Rockin. Much appreciated.

[QUOTE=Exon123]

But it still doesn't answer my question "WHY"

Why close it down before your ready for renovations, look at all the cash flow the've lost.[/QUOTE]I'm asking myself the same as you, Exon.

But you'll learn as time goes by that Argentina is a curious and non logic place when you talk about bussines.

No Caveman,

I'm quite aware of prosperess business that have been shut down for no apparent reason. Restaruant row in Recoleta a prime example. The owners of those building will never recover the lost revenue and the place is still a shambles.

But Exedra is another story. Thanks to Rocken Bob I now know a little of its history, what a famious place, "The Temple of Cats". What a story of a remarkable place all of us enjoyed.

Not knowing the financial structure, the overhead, rent, ect, ect the price of $1,300,000 seams cheap. They were charging an arm & a leg and the place was always full 24/7. Theres got to be a reason the old mans son sold, thats what I'm driving at --- WHY?

Exon

Mongers-

I hate to piss on everyone's Exedra love parade here, but the bottom line here is that Exedra was probably not nearly as profitable a business venture as one might think. First of all, just how much money do you think is being made off a group of 5 guys, drinking one 10 peso coffee each, sitting there for 3-4 hours? Not much! In addition, the article said they had 22 waiters, which probably means they had at least 6-10 kitchen / cleaning staff. So we are talking minimum 30 employees, which is ridiculous from an owners standpoint, that is minimum $100,000 AR per month of payroll expenses. In a bar business (where margins are much larger than cafe business) you need to have at least $2000 AR per week in sales per employee to break even. On top of all this, you have 21% IVA, 3% ingresos brutos, and impuestos ganancias (they definitely payed the first two, but maybe not the latter) Naturally, you then have the "extra" expenses which go along with the operation of a prostitution rendezvous point, which could range into the thousands of pesos monthly. All these hefty fixed costs plus the nature of the low turnover, low margin sales scheme in place combined with declining gross sales led the owner to dump the place for $1.3 million USD, and from a business standpoint, you cannot really blame him.

Suerte,

Dirk Diggler

Man, if I just inherited a restaurant that I could sell for 1.3 million bucks I'd have the For Sale sign up in a New York minute.

Today a quite interesting article about the history of this cafe was published in a local newspaper. If you can read Spanish or manage to go through it using an online translator, it could be an interesting activity (labor union leaders, famous writers, secret agents and escorts involved):

[url]http://www.criticadigital.com/impresa/index.php?secc=nota&nid=1450[/url]

All the best

[QUOTE=Dirk Diggler]Mongers-

I hate to piss on everyone's Exedra love parade here, but the bottom line here is that Exedra was probably not nearly as profitable a business venture as one might think. First of all, just how much money do you think is being made off a group of 5 guys, drinking one 10 peso coffee each, sitting there for 3-4 hours? Not much! In addition, the article said they had 22 waiters, which probably means they had at least 6-10 kitchen / cleaning staff. So we are talking minimum 30 employees, which is ridiculous from an owners standpoint, that is minimum $100,000 AR per month of payroll expenses. In a bar business (where margins are much larger than cafe business) you need to have at least $2000 AR per week in sales per employee to break even. On top of all this, you have 21% IVA, 3% ingresos brutos, and impuestos ganancias (they definitely payed the first two, but maybe not the latter) Naturally, you then have the "extra" expenses which go along with the operation of a prostitution rendezvous point, which could range into the thousands of pesos monthly. All these hefty fixed costs plus the nature of the low turnover, low margin sales scheme in place combined with declining gross sales led the owner to dump the place for $1.3 million USD, and from a business standpoint, you cannot really blame him.

Suerte,

Dirk Diggler[/QUOTE]Dirk,

Not withstanding the validity of your argument, but at 1,500 customers a day (per the article), at just $11 pesos each, then Exedra was a $500k peso per month business, against which a $100k payroll would appear reasonable.

Thanks,

Jackson

[QUOTE=Rockin Bob]Man, if I just inherited a restaurant that I could sell for 1.3 million bucks I'd have the For Sale sign up in a New York minute.[/QUOTE]Here's the difference.

Knowing the restaurant was worth a million bucks or so, I'd be much more interested in the cash flow, rather than the million in cash. This way "I'd have my cake and eat it too". I could always sell it if need be, but in the mean time I'd have a money machine and live "High off the Hog", plus a million bucks tucked away.

What most of the Mongers that post here don't realize is, "Money is not Important, Unless there's not enough of it". Thats when money becomes important, when you don't have enough of it. Until then its an insignificant tool we use to navigate threw life.

Sorry Dirk, I'm with Jackson below, Exedra made enough money to satisfy all my creature comforts, at least here in Buenos Aires. I mean any "Dumb MotherFucker" can spend money, that doesn't take any brains. If the numbers written below are true, your looking at 10 thousand dollars a month or so profit. How much can you spend before everyone starts looking at you as a "Stupid CockSucker". Moreover, what do you really need in Buenos Aires that would cost more that $10,000 dollars a month.

I'da kept the restaurant.

Exon

Your use of the word "Assuming" is the key to this deal.

We don't know the deal, we only know the price of the deal, a million, three, there are always deals with in deals.

Say for example, the owner that died owned Exedra out right and paid no rent. After 34 years thats a good possibility, frankly its more that likely he did given the stated price. If thats the case then a Million, Three is not out of the ball park. That being the case, $10,000 dollars a month is roughly a 10 precent return on invested capital. I can live with that all day everyday.

But were be-laboring the point. Its been my experience that Porteno's are not famious for over paying. If the new owner dropped down 1.3 million US he got more than a lease, don't you think. I mean would you drop that kind of money down just for the privledge of paying 10 to 20 thousand peso's a month in rent. Then close it down and not give a Fuck.

I'm saddend by the fact that it "IS" closed down and a real piece of Argentine history is gone forever and none of us can monger their again. It was the one place we could all monger on a relaxed basis and not get soked on drink prices. Plus I personally considered many of the employee's and girls that worked there friends.

Exon

[QUOTE=Guiller]Today a quite interesting article about the history of this cafe was published in a local newspaper. If you can read Spanish or manage to go through it using an online translator, it could be an interesting activity (labor union leaders, famous writers, secret agents and escorts involved):

[url]http://www.criticadigital.com/impresa/index.php?secc=nota&nid=1450[/url]

All the best[/QUOTE]Go back a few posts, Guiller! It's all translated, secret agent sidebar and all.

But thanks for the link, didn't know it was on-line.

[QUOTE=Sidney]100,000 pesos divided by 22 employes= about $1,500 USD per month, average per employe. Seems much too high for AR wages.[/QUOTE]Actually, accepting Dirk's number of 32 employees, which would include kitchen and cleaning staff, divided into 100k = $3,125 per employee per month. Subtracting out Argentina's 70% payroll burden yields an average salary of $1,840 per employee, which in today's inflationary environment appears reasonable. Hell, the encargado of my building gets paid $3,000 pesos a month.

Thanks,

Jackson