I opened up a bar as a place to hang out and drink with my friends. The story I’m about to share with you happened some years ago, where my best friend and I reached a brilliant conclusion. Because we had some experience with event planning, as well as extra money to spend, we thought that opening a bar would be a fantastic idea.
To tell you the truth, it really was, at least when it comes to the money side of things, but some other stuff cast a shadow on the “enjoyment” we originally hoped for.
By the way, I definitely won’t lecture you on things that were being told hundreds of times by now, and they all come down to:
When it comes to it, it’s a job like any other one, and at the very least you’ll need to have some experience, and be willing to put the time in… Really? Sure, those things come in handy, but they are not essential – like anything, it can be outsourced.
It’s a job with “razor-thin margins” – Not so much. On the very first day, we reached $2k in sales. Beginner’s luck? Well, we repeated that on the second day as well, while by the time the third day rolled around, we were able to bump it to $3k. This was Saturday, so I guess that helped.
I speak from personal experience here. In case you’re not just some average Joe, but consider yourself to be a serious entrepreneur who has the network down, and can execute on a given task, there’s a huge chance you’ll be able to make money by opening a bar.
Think twice before you decide to open a bar
Many people around the globe dream about owning a bar, but now, I will give you an insider look at some of the less glamorous stuff that comes with it. To give you just a quick preview, this will include family and friends issues, so if you’re not willing to incorporate some changes surrounding your lifestyle, I would advise you to think twice before you decide to pursue your dream.
Immediate problems you’re bound to run into
You’ve probably heard that it’s a terrible idea to start a business with friends and family members, but having them as guests at your bar is far worse.
I never even considered this would become such an issue, but I realized it very quickly. One week before the bar was supposed to open, I had all the seats already reserved! It is great having a network of people at your disposal, isn’t it?
However, because all the seats were taken so quickly, another problem arose. I had no room left for family and friends who wanted to come in late as VIP guests. Don’t get me wrong, not all of these individuals were exactly known as night owls, but they wanted to showcase their support, so they rang their friends, and well, now I became the person who had to cancel their plans.
That wasn’t always easy, as some of them felt betrayed, and I truly understand why that was the case. I, later on, I tried to reconnect with those people, but some bridges were already burnt. The whole situation was extremely unpleasant, or even disgusting, would be the appropriate word to use here. Worst of all is that the same situation repeated itself every other weekend.
You can see how that leads to tons of arguments, explaining I had to do, me apologizing to friends and family members… I used any excuse I could get; the bar is overcrowded, there really is no room left whatsoever, I’ll buy you a round or two if you go to the bar next door, and so on.
Unfortunately for me, most of my friends never understood the need to call in ahead of time, they simply assumed that there’ll always be a VIP booth with their name on it. Come to think of it, I don’t know if they expected me to move people who were already there or what! Naturally, this leads to questions like, come on man, you don’t have any room left for ME?
Man, there is none, it’s as simple as that, it’s not my fault you forgot to book a table ahead of time. You could’ve brought your own table from your house, and I would’ve stuck it on the ceiling, how about that?
While I was feeling sorry for some of the people who were kind and who I had to let down, it’s these other folks that got on my nerves pretty bad. At the end of the day, this is a business like any other, and there are rules to be followed.
Friends celebrating birthdays at your bar
This is a complete nightmare, and stress I wouldn’t wish upon my biggest enemies. My wife’s friend celebrated her birthday at my place during the very first month, and guess what, they’re not on speaking terms ever since. Just like that, friendship was over.
I wasn’t present at the time of the party, but from what I heard, that lady even dared to threaten and shout at workers, claiming that she has the power to fire them at will, being the friend of the owner.
The reasons for this? She wasn’t happy with the service, as the bartender didn’t provide the drinks fast enough. As she was leaving, she slammed the door, and thus, ended our friendship.
Lesson learned… later on, whenever some of my friends asked if they could celebrate their birthday or other important events in my bar, I always claimed that it wouldn’t be such a great idea, as “I too would like to relax, and I simply cannot do it at my place of business.” The reality was, I didn’t want to run into the same issues ever again.
Customers who won’t pay their bills
Never loan money to friends… I’m sure you already know that, and you probably have a couple of examples of people who just don’t know how to manage money, who are constantly in debt.
Let me tell you a story about those guys. Expect to see them at your bar on the regular, giving out free drinks to everybody, and generally having a great time. Unfortunately, the lights have to turn on at some point. It’s not hard to understand what comes next.
“Hey man, I’m currently strapped for cash, but I’ll get a paycheck to come Monday. Don’t worry about a thing, I’ll come by later on and we’ll sort everything out over a beer.” It’s just one thing they forgot to mention. They weren’t speaking about Monday that came two days after this ordeal, rather about some mystical Monday that never came.
At the end of the day, bills have to be paid, and more times than not, I got the honor of doing so. Thinking back on it now, those were some of the best investments I ever made. For just $50-$100 I got to find out who my true friends really were.
Unlike the above mentioned “friends”, there’s another familiar scene that happened quite often. It starts with a group of students, and it’s usually quite a large group (at least ten of them). They tend to be heavy drinkers, and I mean heavy! One by one, these young students stumble out of the bar, until there are only 2-3 of the most hardcore ones left.
Unfortunately, they rarely realized that their friends simply left without ever paying their bills. What can I say, once the light went on, there were a couple of hours of agony left. The students kept calling their friends, hoping they’ll return and sort out the bill, but by that time, their friends were usually passed out drunk somewhere far away. It ended in two ways. At times, the students managed to find the money, but on most occasions, they would agree to leave behind some valuables, and collect them back the next day once they collected enough funds to pay for their bills.
Phone calls in the middle of the night
This is another classic. Whenever one of my buddies got drunk, and needed a place to continue on with their good times, they thought it would be a great idea to call me. As you might assume, that usually happened in the middle of the night. For some strange reason, they thought that just because I used to own a bar, that I would be there all the time, willing to share a few drinks with them.
The whole situation got so absurd, I had to turn off my phone before going to bed, just to get a good night of sleep. These phone calls weren’t only coming from individuals looking for a place to drink either. Most of them assumed that I would be up late every night, so they had a person to talk to in their moment of need.
There’s a popular anecdote which goes something along the line of: friends of a man who never drinks, don’t get to understand that he loves them after 2:00 AM.
As a bar owner, you’ll see a lot of things you don’t want to see
People do stupid things when they’re drunk, we all know that. I just wish I wasn’t there to see some of them first hand. While most of them just like to jump on top of chairs and tables, and sing and yell as their lives depended on it, others become inclined to share their most intimate secrets with me, and going through that scenario one night after another can be quite a grueling ordeal.
Now comes the toughest part, and you can probably guess what it is. Drunk people tend to make stupid moves, and committing adultery is definitely up there. Much to my disappointment, I got to witness it several times, and I hated every second of it. It was always expected of me to keep quiet, and when the dust settled, it became very hard to continue with the friendship like never happened. I just couldn’t deal with their hypocrisy.
In case you’re still around, I hope I didn’t scare you away, because there are some positive sides to this story as well. As I mentioned before, having previous experience in running a bar is important, but not vital, it can be outsourced. When I was starting out, everyone claimed the same thing: buy a place that’s supposed to be successful but somehow isn’t.
Next, find a bar that’s a complete dump, but works great, track down its manager, and hire him. Give him 30% of your bar if necessary. Having a great manager who will run the place will improve your chances greatly. Because there’s an art to running a bar, try to ideally find someone who’s done it before from the ground up.
In a perfect world, you should also consider adding a marketing/advertising guru to your team. As for you personally, you’ll need to work your butt off at the very start, but as things pick up steam, you’ll simply show up from time to time to collect the cash.
Let’s end this chapter with a thing very few seems to mention:
To become a successful bar owner, you’ll have to learn a lot of uncommon knowledge, and pay special focus to the shadier part of the business.
Peter is a serial entrepreneur and founder of DollarSanity blog who created and run a variety of businesses. You can learn more about him at the DollarSanity About me page.
8 thoughts on “Opening a Bar? Think Twice!”
When people asked me about my dream job I always said there would be nothing better than opening a brewpub with good food and good beer. This post makes me second guess that hahaha.
Your “dream job” isn’t a dream, it’s a nightmare. Trust me.
Thanks for the insight. I thought about doing this one day myself!
I admit I have a dream of owning a beach bar on a Caribbean island, but know it would be more of a hobby in retirement than a money maker. My husband freaks out whenever I say I want to do this and a former co-worker also owned a bar and said “don’t do it”. Thanks for pointing out other problems. What about employees stealing? Either drinking your product or giving friends free drinks? Or not ringing up cash sales and keeping the cash? Did that add up?
What about cops and liquor inspectors. It’s almost impossible not to break a liquor law.
Thanks so much for the insights! I’m sorry those hardships happened to you and I’m glad it wasn’t all bad. I used to think having a restaurant would be fun – now I’ve watched 13 seasons of Restaurant Impossible and think differently 🙂 . This post has definitely helped me see bars in a different way. Thanks for saving me from future pain! Now I want to hear more about this “uncommon knowledge” you have to learn to be a successful bar owner and what the “shadier part of the business” is. Intriguing!
As I already said, it’s almost impossible not to break a liquor law plus it is a business with a lot of cash turnover and cash isn’t traceable.
Back when I worked at a pizza place, I thought about opening my own pizza place. The thoughts never went beyond just mere fantasy since I realized it would probably be more work than it’s worth. I wonder how well it would parallel opening a bar?
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