So You Want to Open a Bar…

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Are you the go-to drink mixer for all of your friends? Do you spend way too much time on the Internet looking up new alcohol concoctions to pull out as your next party trick? Do you feel like your calling in life is to invent new beverages for people to “ooh and ahh” over? If you answered yes to any of these questions, you’ve likely dreamed of the day you can quit your office job in favor of opening your own bar. Who could blame you? Making your own hours, chatting with friendly folks at the bar, and counting beer pouring as one of your skills—it’s the dream life. Unfortunately, this entrepreneurial endeavor isn’t exactly what it seems. There’s much more to opening a bar than just pouring drinks and chatting up happy customers.

Crafting an Airtight Business Plan
Every venture requires the right amount of capital, and creating a bar is no inexpensive feat. The most common cause of failure is undercapitalization, meaning it’s essential to secure the right amount of funds to carry your venture at least through the year. To do so, you’ll need an airtight business plan, with financial information, concept details, and the nitty gritty that goes into the daily operations. Some may approach banks for increasingly hard to secure small business loans, while others search out private investors on peer to peer lending websites like Prosper. Be wary of using friends and family’s investments to keep your business afloat; mixing money and relationships tends to go south.

The Folks Behind the Bar
Bars owners are in the business of getting people intoxicated, and with that intoxication comes a host of less-than-fun consequences, including fights, damages, and a mass of other issues. Who’s going to help you when these problems arrive? Your staff, so you better ensure you hire on great help. It can be surprisingly difficult to hire the right people, especially in a bar setting; you’ll want people who know how to keep a bar without taking part in the drinking themselves, those with a thick skin that know how to handle rowdy customers, and ultimately, you want to find someone who will stay with the business for the long term.

Choosing Your Location
When it comes down to push and shove, selecting the right location is paramount. Depending on the space itself, you’ll find yourself challenged by transforming say, a retail space, into a fully functioning bar, especially if you plan on serving food in your establishment. You’ll also need to consider the permits and regulations that come along with your chosen location. Will securing a liquor license (something we’ll delve deeper into within the next section) be an issue? Is your venue located in a residential area? It could result in noise violation after noise violation.

Getting a Liquor License
One of the largest challenges for those looking to open their own bar or club is securing the necessary liquor license. From a cost perspective, it might not be too expensive, but finding an actual license is where the problem truly lies. Many areas, especially those with saturated populations, have a set amount of licenses available. In most states, each county has a specific number of varied types of liquor license, some that allow wine and beer, some that allow for a full bar, and everything in between—and most of these counties have tapped out on their licenses. If you’re looking to open a bar in a saturated metropolis, know before you go in that you’ll be securing your license from an existing business (after you receive the approval from local and state government for your bar venture). In most cases, entrepreneurs need to go through a brokerage service to secure their liquor license. Heavy competition means high prices, and sometimes might mean you’re unable to open your bar in the area you originally desired.

Opening a bar is a dream for many, to be sure. Working as barkeep, handing off fun libations to regular patrons, and working in one of your favorite places—yup, opening a bar sounds like an easy decision. Running a bar can be an extremely lucrative venture, but getting to that point means navigating a host of challenges and dealing with various stressors. Do your research before you dip your toe into the bar business and be aware of the challenges that come along with this endeavor.

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