Your comprehensive guide for starting a bar business

Deciding to Start a Bar

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Do you appreciate fine liquors and wines? Do you love the fun, party atmosphere of your neighborhood bar? Maybe you don’t have a neighborhood bar in your community and you wish you could start one. If you have ever thought about starting your own bar, and you feel that you have just what it takes to create a great bar concept, then maybe the time is right for you to start your own business. Deciding to start a bar business is an important decision – entering the hospitality industry is not easy. Here are some important things to consider when you are deciding to open your own bar:

  • Capital – Do you have the capital required to launch a bar? Even if you can get a great deal on the location or you are taking over an existing bar, you will need a considerable amount of capital to invest in your inventory, permits and inspections, remodeling and payroll. In tough economic times, be forewarned about getting financing. Bars and restaurants are risky business for traditional lenders and you may have a hard time getting a start up loan through a bank. As with any business, you should spend considerable time and effort into creating a solid business plan that takes you through the first year and beyond.
  • Time Commitment – Depending on your concept, you may be open 12 or more hours a day. When you are getting started, you will also be putting countless hours into setting up, hiring, getting inspections, marketing and managing your bar business. Do you have the time and the support system to work long, long hours and stay upbeat for your clientele? Are you financially ready to commit all your time to getting your bar business off the ground?
  • Legality – You will discover that there are many legal responsibilities involved with starting and running a bar business. Specific requirements will vary state to state; but in general, be prepared to go through a rigorous licensing application process and get familiar with insurance and liability requirements as well. As the bar owner, you are responsible for what happens on your premises, and in some cases, what happens to your patrons after they leave your establishment.
  • Experience – If you have never worked behind the scenes at a bar or restaurant as a manager, bartender or server, you should probably consider getting some hands on experience before you open your own bar. You should understand pouring, taking inventory, closing, working the cash or POS system and dealing with all manner of customers. Observing as a patron is not enough for you to understand the nuances of running a food and beverage business.
  • Location – The number one rule of real estate applies in full force here – your location is critical to your ongoing success. Research the community and the competition thoroughly. Are you filling a need in the market or jumping into an already successful ‘strip’ of similar establishments? What will make your bar become a destination point? Also, does the location fit your concept? A poor location can kill your business before it ever gets off the ground.
  • Expertise – Do you have a good knowledge of you product? Know your liquors and wines inside and out – you will be the expert for discerning clients. Even if you are opening up a campus beer joint, you should know everything there is to know about beer and wine and your distribution channels.
  • Vision – Go into your business with a clear vision of what you want to accomplish. Do you want to create the ideal neighborhood bar and make one location a booming success? Do you have a vision for expansion that includes replicating your original concept or creating several unique locations? Does your concept include food or other entertainment as a part of expansion? Map out your ideas and business concepts in your business plan and create a model that supports your vision. Every aspect of the business, from the table arrangements to the glassware and liquor inventory should support your concept.

Deciding to open a bar is a big decision! Hospitality and entertainment businesses are fun and creative, but they require a lot of time, hard work and finesse to make them stand apart and become destinations. Take the time to prepare, get experience and build a concept that can help you realize your dream and be successful at it as well.

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