Opening a bar may seem simple, but before embarking on that adventure, we should consider several aspects that can have a significant impact on the success or failure of the business.
Owning this type of business has the potential to generate profits and help boost your community’s economy; however, a lot of fieldwork is required to open the doors.
Along with a lot of paperwork, you’ll have to be versed in the relevant laws. Moreover, we continually see bars that open and close and we wonder what they have done wrong or what they could have done better. There is no magic formula but consider the following ideas:
1. The location factor
For your business to be successful, its location is vital. When looking for a suitable location, keep in mind that you will be competing for customers. Opening a bar near a similar business is usually not a wise decision.
You want to give people a reason to visit your place instead of the competition. Offering the same drinks in different locations is usually not enough. However, you do not want to establish yourself in an area where the population is small.
If you do it, the chances of failure increase. If you find yourself in a densely populated area of the community, make sure your business stands out by offering two-for-one nights, offers or contests.
2. Understand your job
Having a bar or a restaurant is a complicated job; it requires a lot of dedication and knowledge of this sector to know how it works. It is necessary to take into account that depending on the type of service you may have to be all day at the bar or restaurant including weekends, in addition to having to hire waiters and cleaners.
3. Look for clients
It is a utopia to think that you are going to open the bar and everyone who passes is going to fix and enter. This is not the case, but it is very complicated to attract customers and build loyalty.
It is necessary to develop a marketing strategy to publicize the restaurant or bar, as well as being very clear about the concept of the place and the menu that is offered.
4. Differentiation
Being original in this business can be complicated, but alternatives always exist. For example, you can offer bands, contests or sponsored parties. It also attracts a lot of attention to use a specific theme; for example, medieval, cinematographic, accompanied by drinks directly related to the environment.
5. Get a discount on purchases
Profitability here ranges between 30% and 40% depending on the sale price and the cost of raw materials. In any case, it is better to have a reduced number of providers. With a few providers, you can get discounts for purchase volumes.
For starters, it is best to hire an intermediary that provides all brands of alcohol or also work with the representatives of the brands themselves.
6. Staff
A bar needs qualified staff who can handle all types of customers. Dealing with drunk people is sometimes an ordeal but hiring the right personnel will definitely give you the best.
You must provide your staff with clear guidelines so that each member of the team is productive and effective in their work.
Workers will play a critical role in the smooth running of your business. For starters, a waiter, a “DJ,” a doorman, and an RP for the weekends will suffice. In this business, the figure of the manager is essential, especially if you do not have enough time to inspect and be around the premises.
7. Invest your sound system
To succeed in your bar business, you have to invest in the sound system. Most people prefer bars where they will enjoy music and dance to the utmost.
Remember that there is a surrounding community when installing your sound system. Install false ceilings, walls, and floors (filled with special materials that absorb and minimize noise).
8. Financing
Most people who have opened liquor stores and bars did not have enough starting capital. Most people apply for a bank or small business loans. The amount of money you borrow will determine the number of employees you can hire, the number of alcohol purchases you can make and the general configuration or appearance of your enterprise.
You can consider borrowing money from a friend, family member or partner before taking a bank loan. In this way, large interest rates can often be avoided.
However, if your establishment fails and you find that you are not able to pay, this has the potential to taint relationships. If you decide to borrow money from someone close to you, ensure you reach an agreement in writing. But considering other options, such as start up loans.
9. Regulations and suppliers
Understand the zoning laws of your community, which many cities publish on their websites. To serve open a bar, you must have a liquor license. You will also have to apply for a business license in the city where you will be established.
These licences are not free; you must pay a certain amount for each. Some municipalities prohibit the sale of alcoholic products near social amenities like near churches, hospitals, schools, and libraries.
Other places may be have more bars than they need; in this case, the authorities are less likely to issue an additional license. Some community laws also impose limits on how late alcohol can be served and on what days. Breaking these regulations can result in crime and possibly the loss of your business license.
You will have to have a wide variety of liquors inside your establishment to provide your customers with a lot of beverage options. Since the government conducts inspection and compliance checks, you can not simply buy liquor anywhere.
For example, supermarket purchases are prohibited. Research on the best wholesalers and contact them for their services. You can get an information brochure for companies that specifically deal with the sale of alcohol from your city’s alcoholic beverage control agency.
Finally, keep in mind that your professional goal is aligned with your personal life; it is the only way to see your project successfully and to perceive it in that way.
