So you want to open a bar eh? Well let me tell you something, it isn’t nearly as much fun as you might think it is. Margins are small, you deal with drunk assholes, stuff is constantly breaking, and you’re constantly scared of lawsuits. You spend way more time shuffling paperwork than you do drinking beer. This isn’t a glamorous path that you’re considering my friend. But if you’re truly convinced that you want to open a bar I could probably provide you with a few broad tips.
Alright, if you’re wanting to get money from anyone you’ll have to present a business plan. Even if you don’t need to raise money, a business plan is critical to fully understanding your business model. The business plan should be your starting point before going anywhere with anything. Thinking about starting a business is easy, sitting down and hammering out the details isn’t. The business plan should be all encompassing and you can never have too much detail. Here I’ll cover what I think is the most important aspects.
Your projections are going to suck. Just deal with it, it’s almost a universal fact for a new business. If you’re starting a franchise, opening a second store, or have some kind of track record you can probably come up with some good numbers. But if you’re reading this I’m assuming you’re considering opening your first bar. If that’s the case then I can state almost unequivocally that you’re going to be wrong. You know all those expenses that you worked so hard to come up with? Well double it. That number look absurd? Well it is and its still probably too small of a prediction. Bars cost a shit load of money so be prepared to pony up! Have a big safety reserve ;)
Do not do a sole proprietorship. Do consult legal counsel. Do get good insurance. Don’t cut corners! Legal fee’s suck and every business owner hates them. The thing about legal fees is it’s basically in the back of your mind where you never think about it until something crazy happens and your world begins to fall apart. I seriously can’t stress this enough. Lawyers are the most important necessary evil that you’ll ever find.
A bar provides a product and a service. Your products are food and booze. Your service is a friendly environment. You are in the business of making people enjoy themselves. This means you know your employees, your customers, and you business associates. You are here to literally try and make everyone happy. Make your employees happy so they smile and joke with your customers. Make your customers happy so they keep coming back and spend more money. Keep your associates happy so you can leverage their relationship in the future. You’ll need every edge you can get and you never know when their skills or influence will come in handy!
Bars and restaurants are known for having small margins. Your food, beer, and liquor costs can quickly skyrocket if you’re not paying attention. You literally have to watch every single cent that your business spends because all of those little bitty pennies add up really fast! If you’re selling your food just a little too cheap, portioning it wrong, or wasting too much to spoilage then you are going to go broke real quick and in a hurry. Also, if you have a kitchen, your labor costs will creep really fast too. You have to be a hard ass and draw the line so that you’re not getting bleed dry one penny at a time. Controlling costs is a marathon and will never end. It’s all consuming and it will drive you crazy. This is by far my least favorite part of the business.
This is the one thing I didn’t pay nearly enough attention to! Marketing is imperative to success and is so often over looked. I still to this day don’t think I do a good enough job at this. You have to be relentlessly putting yourself out there and trying to introduce your business to new people while establishing loyalty with your established customers. You need a good social media marketing plan. You will probably need to run some ads on the radio. A billboard isn’t a bad idea. Mailing out flyers is always a good option. Geotargeting and mobile ads are useful in high density or tourist areas. Walking around and talking to people is always good. Walking into local businesses and handing out flyers. Go to hotels, hand out flyers, and work out a deal with the front desk concierge. Seriously, the marketing side of your business plan is never detailed enough and you will always be slacking in one area or the other. There’s always room for improvement in marketing!
Before opening make sure your staff knows what the hell they are doing! Do several soft openings and make sure everyone is trained. Invite friends and family out for your first soft opening night because you and your staff are going to suck. Make sure the entire world knows about your big grand opening and don’t mess it up! My grand opening was a disaster and it wrecked my reputation with my neighbors. Rebuilding that relationship was a nightmare and my life would have been so much easier if I just waited and trained for an extra week. You only have one chance to make a first impression so this part is imperative.
Don’t open a bar! Well that is unless you REALLY want to open one. But be prepared to make less money than you expect, be prepared to lose money actually, be prepared to analyze everything when you go out to other bars, be prepared to work terrible hours, and just be prepared for your entire life to change. It’s not all bad and it can be a whole lot of fun at times actually. But you just have to be ready for allot of work with no real promise of making money. If you go for it I wish you the best of luck! But everytime I meet someone that wants to open a bar my first words of advice are always, “Don’t do it!”
Originally published at ScottKalwei.