There comes a time in every man’s life where he imagines opening his own bar, often over a few pints among friends. While this entrepreneurial dream typically amounts to no more than a hill of beans, a handful of people are committed to the seemingly impossible. So the question remains, how does one open their own bar?
There is a lot to learn about responsible management of licensed venues. Many new bars will fail because their owners don’t have enough capital to keep operations in order or their owners lack the necessary experience related to the industry. Practically everyone who’s enjoyed a cold draft beer would love to own their own bar, but a fraction of those individuals are actually savvy business people. The best way to ensure responsible management is to get the required state certifications and have an awesome service culture.
The biggest hurdle facing potential bar owners is securing a liquor license. Virtually every successful bar on the planet has the ability to sell liquor to their patrons, but they are notoriously expensive. In some areas a liquor license can run $400,000 – $1.5 million. Other areas require you to purchase a liquor license from someone who previously owned it, making them even harder to come by. Check the legal requirements of the area you intend to open your bar as far as liquor licenses are considered.
Depending on how much money you have entering the business, you may need to seek out a loan. The ability to secure a loan can make or break some businesses. The better standing your credit the better ability you have of securing more funds. If denied a loan, you’ll likely have a harder time finding separate investors.
Meeting with a financial planner, one familiar with the industry, is probably in your best interest – especially if you have little familiarity yourself. They can help outline the cost of upkeep and the materials required to get up and running.
Location is one of the most critical elements in opening your bar. You want to be close to people, particularly where they work – office warriors love a pint after punching out. The theme of your bar also plays a role in where you might place your bar – your Irish theme may not play so well across the street from the biggest Irish bar competitor in town.
How much time can you dedicate to your new business? Most successful bars keep late night hours, often requiring management to burn the midnight oil well after last call. You’ll likely need to compromise your schedule for years until the bar is in a position to hire additional management. Are you the type of person that can handle this? If so, you’re one step close to realizing your dream.