How to Succeed in the Bar Business

Owning a bar sounds like the perfect life to many potential entrepreneurs, but it’s not always fun and games. It’s hard work. It takes time. It takes dedication. But if you have a clear vision, it can also translate into a rewarding and successful business.

Here are some tips for prospective bar owners to know before they get into the business:

1. Build a bar for your customers
You must build a bar for the marketplace and focus on your location. The bar shouldn’t be build to suit you.

Everyone remembers the downfall of Piratz Tavern from Bar Rescue. This failing pirate-themed bar was centrally located in Silver Spring, Maryland which had a sprawling business population during the daytime. The outlandish style of Piratz Tavern didn’t appeal to the local marketplace of corporate workers, so Bar Rescue renovated and rebranded the bar by changing the name to Corporate Bar and Grill, adding a lunch and happy hour service, and creating an environment that was inviting to the business community. However, soon after the renovation, the bar discarded the changes and reverted back to its pirate roots. In April 2015, Piratz Tavern closed its doors.

The takeaway from this rescue attempt?

Please your audience. Don’t open a bar for yourself, or that’s where you will fail.

2. Hire for attitude, not experience
Working as a bartender isn’t exactly rocket science and you should be hiring people who have great personalities. A candidate with the right attitude will boost your company higher than an experienced misfit. The key to recruiting is to identify the ideal personality for the job and then creating a descriptive job posting that captures it.

In this industry, we can only teach people, not train them. Training is behavior modification and can be a lengthy process. Skills can be learned, but personalities can not be changed. Teaching is showing someone how to carry out specific tasks and then encouraging them to add their own personalities to make their role come alive. We don’t train anyone; all we do is teach people so we should have the right personalities from the beginning or it’s all going to fall apart.

3. Profits come from the bar, not the kitchen
The cost of food is higher than drinks since there is more labor and equipment in making food. Food is a lot less profitable than beverages.

4. Keep an eye on the details
Control your liquor costs by frequently taking inventory. Inventory is a time-consuming task but it is the only way to control your cost of goods and ensure that you are making a profit margin. Profit margin in the bar business can disappear if you do not keep an eye on the details.

5. The first night is just the first night
New bar owners will open their bars and experience a “honeymoon” stage where they will be really busy for a period of time. A rookie bar owner in this stage will make the mistake of not managing their food and beverage costs properly and over scheduling their employees. These two mistakes of poor product and labor management will eventually force a bar to close.