Opening a Bar

[dazraf69]

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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.

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Your going to want to save as much money as possible. Much better off trying to out source a sound system through some type of "under the table" arrangement.

[dazraf69]

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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.


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Hate to say it but these types of situations rarely work out in the long run. If you are going to be an "owner", then plan on sacrificing everything else and committing your self to being par of the place 100% of the time. Majority of the failure you see is attributed to not only lack of planning but lack of management.

[dazraf69]

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My uncle owns a bar and in effect knows many other people that own bars. I grew up around that type of business (Ithaca, NY) so I'll try to list some aspects that I think are important...

1) Location and Demographic: I'm sure you've already thought about all of this. Obviously college towns are great but often way too many open in a small area and basically eat themselves. In Ithaca new bars open every year with a lifespan of 1-4 years usually. I'd say the ones that survive are the ones who a)are located far enough from other bars but still close enough to get to by foot and b)establish themselves quickly as a fun place. Don't even bother opening a bar if your target area is already over-saturated. Every new owner always thinks they can pull business away from others with their sweet idea but it rarely happens. The goal is to get a core group of returning customers and they will bring new people who become part of the core, etc etc. If you never establish repeat business you will fail.

Stock product based on your consumers. If you're catering to mainly college kids you don't need to stock much JW Blue and if you're pulling mainly professionals you won't need alot of Natural Ice.

2)Being an Owner: Very important. So many bars fail because the owner creates the perfect place for HIMSELF to party. Falling asleep at the bar every night fully cocked is a great way for your employees to rob you blind and ruin the chances of you living a long, healthy life. I applaud your decision to stay behind the scenes. Owning AND running a bar is a life-draining experience.

3)Pool-tables, music, arcade machines, etc: Pool-tables, pinballs, and especially whatever music device you choose will all make bank. Arcade cabs for the most part will not, unless you can magically get a new game rotated in twice a year. Most bars bring in an amusement company to stock their place and split the profits 50/50, 60/40, or lower if you make nothing. My advice, if you have some excess capital, would be to purchase all your own equipment. It will pay itself off reasonably quickly and after you've sufficiently profited -- home-owners buy second hand pool tables like they're going out of style. Remember if you do choose to buy all of your own equipment you are responsible for the upkeep (pool tables will jam monthly at least).

4)Food: Some bars do well just selling terrible food way overpriced. Some bars use their food services to bring customers in. I've seen $1 burgers and $.10 wings do exceptionally well. You sell the food at near loss and make the $$ from the alcohol sales. Oh that's another thing, I'm not sure if you're doing live music or other forms of entertainment but make no mistake -- all of your profit is from alcohol sales. Everything else is just a lure. If you're doing exceptionally well and can get away with charging a cover that's awesome. But beware, covers often drive customers away.

5)Employees: You'll never have a shortage of help but you'll always have a shortage of good help. Always schedule your best bartenders for your busiest nights. When you have to run 2-3 bartenders at once make sure they work well together and don't step on each others feet. A good bartender is worth so much and dont be afraid to spend lots on one. Especially on slow nights, a good bartender can turn a Tuesday night into a Thursday or Friday. Have one bartender exclusively for your waitresses on fri/sat.

6)Laws, licenses, etc: Read up as much as you can about all of that stuff. In New York the ABC Board will usually send a minor into your place every 1-3 years. First offense is a fine I believe. Second might be your liquor license (in which case it's game over folks).


Anyway I hope I gave you some things to think about. As you can tell most of my experience is with college bars. If you're planning a more upscale place I don't really have any advice other than charge lots.

The most important thing to do first is to establish an idea of your chances of survival. If you can make it 5 years profitably you're generally golden until you want to sell, lose your license, or they raise the drinking age or something. Go to the other bars around where you're planning to establish yours. Go every night of the week and take it all in. Figure out what they're doing right and what you could improve on. If there are no other bars in your target area you're either extremely lucky or it's not a profitable area.

Good luck!

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Zacd is on point! Making western New York Proud!

[spex x]

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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.

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I'm not really understanding how the ownership will be split between you and your partner. Is he going to manage the bar but have no ownership interest? Or will he manage and have a partial interest?

In either case, I think that you want to be very very careful. If you and your man get into a fight and he decides to flake out on you, what do you plan to do? You don't know how to run a bar. You might think about how the business will operate in such a circumstance. Personally, I wouldn't get my money tied up in a business where the burden of operations rests solely on one individual (although, admittedly, I have done this in the past).

I'd recommend that after you open you spend some time in the bar learning how to run the place to plan for such a scenario. That way if your man flakes you can at least hold the business over until you can find an adequate replacement.

[polkaface]

I am a little skeptical of keeping your monthly fixed costs under 3k.

How big is this place? How much of your 3k do you realistically think will be taken by rent? Satellite, Electric, Phone, Insurance (I am guessing this will be higher than you or I would think). Liquor License.

If your place is over a certain size, you can not legally play copyrighted music in your place without paying a licensing fee. From the web...Without a special license, owners of bars, clubs and restaurants could be sued for playing any one of 8 million recorded songs, even from their own CDs.

Doesn't seem like an outrageous fee (maybe 1000 a year) but still one to consider.

[PatInTheHat]

Ahnuld: Depends on the bar. I've never bartended but I have DJed in clubs for a number of years and heard a variety of stories down the line.

Depending on how the bar "weighs" or keeps track of how much booze is sold often determines whether the bartender can earn extra money by short pouring.

Bartenders have told me that by short pouring they were able to make hundreds more a night because of the way the bar determine how much the bartender owed them at the end of the night.

Most clubs I imagine these days use a system where it's not in the best intrests of the bartender to short pour. Whether management tells them to or not is another story. Anything off the gun from my experience is also watered down.

[T50_Omaha8]

Thremp,

I thought this would fail until you said you were in AL.

Auburn has the lamest and crappiest bar scene I can imagine, but the people I went out with were all too excited to pay absurd covers to go to complete dives--and this was in the middle of summer.

Take a field trip to Athens, GA, if you want to see how a real college bar scene (probably 5x the size of AUB) works. Check out the Loft to see how a dance club should be run and check out Rumour to see how it shouldn't be run.

Also,

Does you school have ID cards? Getting the demographic right at dance clubs is crucial (or else girls feel a place is "sketchy" and avoid it like the plague). Charging a huge cover with a huge student ID discount makes the demographic much more favorable.

[Thremp]

T50,

Those places in Auburn are somewhat respectable compared to the dives we frequent. Needless to say... Its pretty par for the demographic. We actually might try to get the place fixed up to look a little bit nicer. But I will have to see the building and get some figures first. Worst case scenario, we just open a pretty meh place.

I really like that student ID night, it might have some liability concerns cause that is a frequent topic the "white trash" infestation that ends up chasing college girls around like herpes. Awesomeness. I'm hungover. Choo Choo

Thanks for the advice.

[T50_Omaha8]

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the "white trash" infestation that ends up chasing college girls around like herpes.

[/ QUOTE ] ...and they'll pay great money to do it.