Opening a Bar

[Jimbo]

[ QUOTE ]
I don't know about a bar, but my dad used to own a liquor store and his margin was 8%.

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20% on liquor, 25% on bottle beer, 30% on Draw beer. Had two bars for 8.5 years, one a neighborhood lounge, the other a preppie dance/live music club. I had a silent partner which made me the day to day operator. Best advice I can offer you is to let the operator make 100% of the personell decisions, if not they will run to Mommy/Daddy (you) and try to get a more favorable decision.

Also be sure to incorporate and still carry a large (Million $ at least) personal liability policy. Would also advise an insurance policy on each partner payable to the other partner in an amount large enough to pay his/her estate for their share of the business should one of you die, like in a barfight stabbing for instance. [img]/images/graemlins/smile.gif[/img]


YMMV

Jimbo

[Thremp]

spex,

I think the markup on booze is typically ~200% in a bar. Cases of beer 15-18 bucks and sells for >70 per case. Well drinks pretty stiff as well with top shelf having the least markup from the tentative figures I've looked at.

Jimbo,

Yeah, I'll probably try to insulate liability with an LLC. Also a large umbrella policy is a must have if I decide to do this. Thankfully, I won't be at the bar enough to get stabbed. I think your margins are more in line with what we're expecting.

eastbay,

When in school I like to refer to something I called the dork "majority", what I was really referring to was that most people aren't in your social crowd. This is a place that I won't frequent really ever. It seems that the girls I hang out with won't be there ever. Yet, I still see 2-3 places with them (Keep in mind this is in AL, and thus the ratio of trashy to normal to ghey is probably like 5:1:1 vs somewhere like Seattle where it'd be 2:1:87 or something of the sort). I should clarify that dance club is used loosely.

zacd,

By sketchy I mean like "I bang 7 different trashy girls at once". Whereas I on the other hand would probably be repulsed by several and annoyed. He "fits in" with the crowd that the bar will cater to much better than I would. Division of duties is an issue and will have to be clarified more fully so that we don't overstep each others boundaries. Most entertainment will be cheap local bands or DJs depending on the evening.

[Thremp]

All,

For clarification, let me explain my thoughts more fully and a couple things I've taken away so far.

1) I've yet to get clear books from my "partner", but at this point I think our monthly nut is somewhere around 3k. Needless to say this weighs fairly huge in my decision making (He is currently dating the rental spaces daughter which a huge clusterfuck that needs to be solved, but if we can cut initial investment and get atleast a 1 year lease locked in at retardedly low rate. Shipz)
2) To cover this... It would likely take almost nothing at all. We'd need to pack the place out once a month. Or just have a decent sized crowd a few times a month.
3) He is currently managing another bar that runs a large Thur night crowd, but opens at 1 on Fri/Sat due to his current agreement. This is another issue that I think needs to be worried about. How he splits his time and priorities etc.

Things I'm taking away:
1) I'm not actually "working" in the bar. I will likely be there rarely during business hours. We'll have video surveillance and an annoying inventory control system so we can match profit margins and hire someone to watch tapes if we need to make sure we aren't being skimmed. Not to mention for general liability reasons this seems to be A+.
2) Get a large umbrella policy to make sure nothing goes awry.
3) Be sure to lay out responsibilities before we move forward on anything.

spex,

I reread what you wrote. I am actually the investor. I will be doing none of the work and putting in all the money. The only real work I'll be doing is auditing type stuff to make sure I'm not getting dicked and collecting dollars.

[ahnuld]

very off-topic but for people who worked/owned bars what is the deal with watering down drinks? Common practice or mostly just urban legends?

[polkaface]

just from observation and have not worked in a bar that deals with this complaint. So I am not qualified to answer this, but I will give it a shot anyway.

a full cup of ice, with warm liquor, in a warm bar, in a warm hand leads to a quicker ice melt and more of a "watering down" effect.

Another issue could be a crappy gun system where the water comes out a little more first before the drink mix.

I think that if bars were known for watering down drinks that people would realize the drinks suck and not frequent that place anymore. As others have mentioned before repeat business is the key and watering down drinks would hurt that.

So I vote for urban legend and most watered down drinks are hopefully attributed to the above and not by dubious characters.

Just my .02

[john kane]

i've spent my last 4 years in a small student+local town with about 20 different pubs/bars. you see the ones which suceed and those which change. some were really popular one year but struggled the next year and ended out completely overhauling the interior.

my advice on most things on the finance forum is pretty worthless, but on bars i think it's pretty knowledgeable (from a consumer, obv not an owner, i have no idea).

- barstaff; employ the hottest bar staff you can find, female and male. i lived 2 years ago with a couple of girls who loved to party, they went where the hot guys were. employing good looking barstaff will help a lot. the reason i went to one bar way more than the rest was becuase a few of the female barstaff were stunning.

- if your going down a student/college route, get the college football team or whatever to always come once a week/sponsor them (typically on the least busiest night so it helps fill it up). this means the girls know where to find the 'hot' guys. thus you have both guys and girls going, both are happy.

- provide enough seating. people who want to go out for hours, those you want, do not want to stand for ages. provide enough seating and those people are happy.

- lots of bar staff. waiting for a drink is [censored] annoying. therefore have to build a long bar so the bar staff don't trip over each other.

- cocktails. people love to drink good strongish cocktails, plus you can charge a lot.

- drinks deals, nothing amazing, just 3 for $x. gets people more drunk so they spend more and have a better time (in general).

- ideally have all seating during day and say 4 nights a week, then on the other 3 nights, say thur-sun then clear 1/3 or so of the tables during a quiet time in the day for a dance floor with dj. this means those who want to dance stay at your place and don't leave.

- some booths. seating in booths can make people feel more comfortable so they will drink more.

just some thoughts

[Brad1970]

OP, sounds like some of the other posters have given some solid advice. I worked in bars (dance clubs) for a few years & I'll echo a couple of their points.

1. Location & demographic. People willing to spend $$$ won't come to a dive where they sweep up the eyeballs at closing time.

2. Licenses: Educate yourself on business & liquor license requirements.

3. Sound system: I didn't read all the responses thoughly but if you plan to open a dance club/large bar, then budget a lot of $$$ for this item. The club I used to work at had a system worth approx. $250k. That was in the mid 90's.

4. Shady business partners: NO, NO, NO, Firsthand experience, avoid these like a case of the clap. They are the last thing you want in a cash rich business like a bar. My old employer's 'silent' partner got the ATF & IRS agents to pay us a visit because he was a scumbag who didn't like to pay taxes. I saw the handwriting on the wall beforehand & got out.

5. Good employees: bad ones will always rob you blind.

[Thremp]

Brad,

It seems utterly retarded to put a 250k sound system in almost any bar. I don't think it would be justifiable in any sort of way.

All,

From what I'm looking at it I can get this thing together for <30k budgeting 3 months expenses. If we can keep monthly fixed costs under 3k, it'd be hard not to make ends meet.

We'll see what happens.

[Brad1970]

[ QUOTE ]
Brad,

It seems utterly retarded to put a 250k sound system in almost any bar. I don't think it would be justifiable in any sort of way.

All,

From what I'm looking at it I can get this thing together for <30k budgeting 3 months expenses. If we can keep monthly fixed costs under 3k, it'd be hard not to make ends meet.

We'll see what happens.

[/ QUOTE ]

What part of "dance club" did you not get....this wasn't your "neighborhood bar down on the corner".

[dazraf69]

[ QUOTE ]
very off-topic but for people who worked/owned bars what is the deal with watering down drinks? Common practice or mostly just urban legends?

[/ QUOTE ]

Thremp,

I ran a successful bar/restaurant for many years but this thread is already too long to read each post. PM me if you want need some clarification or detail. My knowledge however is limited to New York State regulations..as many other states seem to have some very strange laws.

ahnuld,

Common practice. You would be amazed how much it's actually done.But for the most part, they try to limit it to top shelf that's usually used for mixed drinks. A liqueur that is more often used for shots generally will be left alone. Comes down to profit...when push comes to shove, principle tends to diminish with each shot.