Essential Tips for Opening Your Own Bar

With the proper planning, any bar can be successful. But it’s not all fun and games. Being a bar owner is more about grit than glamour, so be prepared to work hard and strive for excellence every single day.

With that in mind, here is the advice I would give any new bar owner on how to bring their idea to fruition, and how to succeed where so many others have failed.

The Idea Stage

  • New vs. Existing Bar: When you open a new bar, you’re creating your own but at least you know what you’re stepping into. An existing bar? Not so much. Speak to the previous owner to find out if there are any problems you should be aware of. Be careful, because you could be entering into a situation that’s more trouble than it’s worth.
  • Business Plan: The least exciting aspect of the bar planning process is also the most crucial. This is your success roadmap, operations guide, and training manual all rolled into one. A good business plan will keep everyone on the same page, including your business partners.
  • Liquor Licensing: You’ll want to start this process now, as it could take 3-6 months to be approved. Start your research early, and be wary of zoning laws and restrictions. Above all, be prepared for the expense.

As an added tip, form a relationship with the state and your vendors, and ask plenty of questions. Everyone will be willing to help. After all, when you make money, they make money, and everyone wins.

Financials

  • Pour Costs: Figure out how much profit you want to make, then figure how much it costs to make each drink you plan to offer, and mark up accordingly. But don’t forget your Q-factor – the coasters, garnishes, and even the napkins you’ll be using. The cost of your drinks don’t just depend on what’s in the glass, but what’s around it as well.
  • Profit Forecasts: All things considered, you should expect to make a profit of around 10%. Use this information to figure out how long it will take you to earn a return on your original investment.
  • Invest In Your Business: Figure your weekly operating costs, then keep 2 to 4 times that amount in an account for emergencies. This is your rainy day fund. You should be investing in your business if you expect it to grow.

Familiarize yourself with all costs associated with opening and create a financial model to help guide your business decisions.

Branding

  • Target Demographic: Research your target market before you open and continue to do so as your business expands. Your brand should speak to that audience through setting, ambiance, the music you play, and the food and drinks you serve. Then maintain that tone on all communications, including marketing materials.
  • Lifetime Value: Don’t focus on providing that once-in-a-lifetime experience, work on lifetime value and creating brand loyalty. The fact is, fewer than 50% of people who visit your bar for the first time will ever come back. If they do return, there’s a 50% chance they’ll return for a third visit, and a 70% chance they’ll return after that. The lesson? Don’t focus on giving a good first impression, but be consistent and focus on a good third
  • Simplified Menu: People get overwhelmed when there are too many food and drink items on a menu, so pare down your selection. Instead of having dozens of items, present variations of the same product, such as your signature burger with choices of toppings and sides. Bundle offerings into packages and rotate in new products, such as limited edition specials. This gives your customers incentive to return for special events, promotions, and to see what’s new on the menu since the last time they visited.

Build a Strong Team

  • Staffing: Hire staff with great attitudes, plenty of spirit, and have the same vision and goals as you. You will have to work through some pretty stressful situations and having a strong core team will help you be successful in the long run. Be assertive, and don’t settle for anything less just to fill positions.
  • Teach, Don’t Train: Training is behavior modification. You don’t have time for that. When you teach, you show your team how to carry out specific tasks. You encourage them to add their personalities to the role to make it come alive. That way, you don’t need to control every aspect of your business (as many entrepreneurs are prone to do). Do this correctly and your workforce will be happier (and more energized).
  • Fight for Excellence: Your employees are not your family. When a team member doesn’t perform up to par, don’t coddle the person. Push them to do better by hitting them where it hurts – pride. Use the rest of the team to make the person WANT to do better. If that doesn’t work, use fear. “Step up to bat, or you’ll be eliminated.” Encourage your winning team members and your weaker players will find themselves pressured to improve.

Strive for Innovation and Growth

Your bar must continue to grow to survive. When it comes to innovation, listen to your customers and never deviate too far from the comfort zone that made your bar successful in the first place. Your aim should be to expand consistently without alienating your loyal customers. That’s what makes a bar – new or existing – great. Follow these principles and I’ll never have to meet you on a future episode of Bar Rescue.

15 replies
  1. Steve Dubbs
    Steve Dubbs says:

    Do you have a typo here( I put in quotes) ? Found in How to Open a Bar,

    Profit Forecasts: All things considered, you should expect to make a profit of around 10%. “Even a 3-5% profit isn’t. ” Use this information to figure out how long it will take you to earn a return on your original investment.

  2. Dave
    Dave says:

    Great article, but perhaps a section addressing underage guests and its liabilities during night life would be beneficial. Regardless of what your opinion is on the morality of underage drinking, getting your liquor license suspended is potentially fatal. Im sure your aware but a lot of bars, especially in college areas and when they first start up, will allow underage kids in during music performances to create more energy in a hope to generate more revenue. I feel the amount of money made off this attempted extra energy is not worth the legal risk that many bars take. A few dollars made off a cover charge or food pales in comparison to the consequences of a liquor suspension or lawsuit. Allowing underage kids as guests fosters many potential problems that every successful bar must avoid. The more underage guests that are allowed in the bar, the higher amount of kids aged 18-20 will show up because their friends are going. Some of these kids will use fakes and pass off drinks to their friends who are most likely plastered already because they know they cant drink openly.You also have guys that will buy underage girls drinks fully knowing they are underage, but at the end of the day liability falls on the bar owner not the patron.

    Its hard enough to run a bar without this hassle but the extra manpower with making sure underage kids aren’t drinking in your establishment is something that should be left to clubs that are pulling in 7 figures.
    Srry to rant but some bar owners are very naive in thinking that these things can never happen.

  3. Paul Faulkner
    Paul Faulkner says:

    Are you looking for interns that want to learn everything in order to open a bar because he has so many awesome ideas but no backing and no experience!? I am your man! I’m not asking for a hand out but if you ever come to Michigan for any reason I would love to sit down and have lunch and pick your brain! I have even gone so far as to suggest things I have seen on Bar Rescue to my uncle who owns a small cafe and he has gotten more business from just a few small ideas!

  4. Meagan
    Meagan says:

    These are really great tips for anyone who is in the restaurant industry. It takes a large investment to get started in something like this and having the knowledge before diving too deep is great. Thanks for sharing.

  5. Monique
    Monique says:

    Awesome and easy to understand guideline on basics for opening a bar. Huge fan of the show! I’m a 22 yr old in the midst of opening my own bar, here in San Diego! Doing everything & anything I can to make my dream bar happen! Thanks for the constant inspiration!

  6. Janet Martin
    Janet Martin says:

    I want to part of this discussion. I am a veteran that would like to start a bar business in my small NH town. I am not smart…I know this. I thought about how can I start a business plan, I don’t know where to begin. I know the VA helps people who want to start a small business but they want a business plan set up in order to invest. I have a simple idea for my bar I think it will work but a business plan, finances, location,product and capitol are all considerations. I have PTSD and find I need to be my own boss. I am completing bar tending school soon. I want do something with my skills, I don’t want it to be for nothing. I need advice an guidance form a man like Mr. Taffer.

  7. Mike Barnette
    Mike Barnette says:

    Planning on opening a restaurant/bar in Colorado. I wish you would consider a show on how to begin a new establishment. On how not to fail in a new startup.

  8. Jason and Heather marsh
    Jason and Heather marsh says:

    Hey John I watch your shows a lot and I have been thinking about how I can start and run my own bar but I don’t know where I need to start I have never worked in one but I really want to try and I wish me and my wife bcould own and run one together we draw a monthly check every month and we really have a hard time making it I just wish there is a way that someone could help us get started and help to succeed in to be able to make a living and I and my wife are willing to learn I have seen some of the bars you have rescued and there nasty and if me and my wife could own and run our own first bar I don’t want it to be nasty I would want it to succeed and not a failure

  9. Amanda Drew
    Amanda Drew says:

    That’s good that you point out that it can take 3-6 months to get a liquor license approved. It’d be important to make sure you get the right one for your future bar so that you’ll be able to open in time. You’d just need to find the right place to get a liquor license application.

  10. Monica Chavez
    Monica Chavez says:

    You make a great point that it could take 3-6 months to be approved for a liquor license, so it’s good to start that process right now. It must be really important, especially for a bar, to have a license so that they don’t run into any legal issues. I wonder what the process of liquor licensing includes exactly.

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