I am opening a bar in the next 6 months....?

Question

What unexpected expenses will I have and what should I know before jumping into this adventure?

I do know a lot about bars. I have heard of drunks and know the liabilities for this. I have managed bars and went to school for this. I just want some advice from people with experience on the subject. What difficulties did you have and what do I need to be ready for that I might not already be thinking of?

I didn't go to school to run a bar I went to school to run a business like a restaurant/bar. I also got a Culinary Arts and Management degree as well. I do have a theme as well as a vision. I am just getting started and cant even begin to tell you how much I have done already. I'm just looking for some helpful hints. Thanks for all those serious answers

Answer 1

I had alot of experience in bars, here is my advice:

When opening a bar you first need an excellent area for the society, you need to take a look at the places where the people go to entertain themselves, like malls, nearby restaurants etc.

After this step create your local, (buy, rent, or mortgage) It's easier to rent, but try to not be so expensive; locals are around $3,500 - $6,000 per month; or you can buy one that you can enjoy at $25,000 - $40,000.

At your question; the unexpected expenses that you probably will have, would be some expenses in the drinks; most of all the expensive ones (luxury beers etc) most of all that will be your high expenses during the business; other ones would be the furniture, local condition, tv's, etc.

Most of all you will be able to fix problems between the employees, but your most high and unexpected expenses would be the drinks; try to have alot of drinks to satisfy the customer, and try to be the best in your business.

Go ahead and open your bar; I wish you good luck.

Answer 2

The best routes to take are to research the process of starting a business as well as the industry you're interested in.

I recommend checking out the SBA, Entrepreneur, The Start Up Journal & Nolo. All 4 are great informational resources for the new/small business owner. I posted links for you in the source box.

Associations may be a good avenue to explore as well. These organizations will address many of the thoughts, questions and concerns you'll inevitably have as well as many you haven't anticipated yet. See the source box for some relevant links.

Research, research, research – this cannot be stressed enough. Read as much as you can about the industry. Here are some book titles that are relevant:

* Start and Run a Money-Making Bar by Bruce Fier
* Upstart Guide Owning & Managing Bar or Tavern by Roy S. Alonzo
* Start Your Own Bar and Tavern (Entrepreneur Magazine's Start Ups) by Entrepreneur Press
* The Food Service Professionals Guide to Bar & Beverage Operation: Ensuring Maximum Success by Chris Parry

There are plenty of free informational resources out there. Check the source box for links to articles.

Hope that helps! I wish you much success & happiness in all your ventures!

Answer 3

I strongly suggest about 6 months operating capitol in the bank, full insurance in place, including Dram Shop insurance. Prepare to have the AC unit break down at least once if it is an older building. Electric bills will always be higher than you expect, and janitorial service will not always happen, so be prepared to clean up the place yourself occasionally. Bartenders will not show up occasionally, so be prepared that your life will be 7 days a week until the place fires up. Expect about 3 times what you have planned for advertisement, for this is not a business that, "if you build it, they will come." Clientel is built slowly, and with care, will be loyal. You don't say what kind of bar, but I certainly hope it is not a singles joint, for the Internet has replaced the Bars for places to pick up people. Best of luck in your venture.

Answer 4

One thing that you should know is that you can be held financially responsibe for ANYTHING that happens on your property. If 2 people get into a fight and a guy gets his teeth knowcked out -- guess what? You are picking up the tab!!! If some drunk slips and breaks his arm, you are paying for that as well. Just keep a good insurance policy!!!

Answer 5

Let me get this straight.

You went to school to run a bar?

What a waste of your time!

It would be a lot cheaper to buy "Cocktail" on DVD starring Academy Award Nominee Tom Cruise.

Answer 6

If they are unexpected we would not know. I would keep some cash in reserve just for such little things as may come up. But a said sum would not be possible; not knowing what you have covered already.

Answer 7

first of all location is important check the requirements to have on in your area this is important allso the set up expenses like cost of everthing you want be sure it is in a good location first do some research.

Answer 8

The first thing you should know about any business is that products and service do not make a business successful. Marketing and management systems do.

It doesn't sound like you've written a business plan for this venture yet. The process of writing a business plan will reveal many financial issues you hadn't considered. The assumptions you'll use for your business plan will help you find a breakeven point, and let you plan your pricing structure. If you're basing prices off budgeted cost percentages, you're already heading toward being one of the 59% of bars and restaurants that will fail this year.

You will have to be prepared to pay dues to BMI and the other entertainment industry royalty companies to use their artists music in your bar if you have a DJ, juke box or play anything other than radio or satellite music. (they pay them already)

You need to know whether your new location is up to code, or whether you'll be footing the bill for new electical work, plumbing, HVAC or water heating. In a bar, your HVAC needs will be double that of a normal business in the same location.

You'll need to put dollars aside for training prior to opening. If you're smart, you'll foot the bill for a VIP party or two as practice, and have a soft opening on an off night, then planning a grand opening a month or so later after the kinks are worked out.

You need to make security of your inventory a priority. Purchasing, storage, inventorying, requisition and receiving procedures should be outlined, trained an in place if you don't want your dollars walking out the door. You also need to educate yourself on all the ways your staff can steal from you. I can name 50 just for the bartender, can you?

You need to have a plan to separate yourself from your competition. You need a unique selling point. There has to be a reason why your customers will want to come to you instead of your competition. "Good drinks" and "good service" aren't unique selling points. Every bar will claim to have them. A unique selling point is some sort of feeling you can promise and deliver to your customers to form a deep connection.

If you want to save money on marketing, you need to have a method for capturing information from every person that visits your establishment, then market to them to turn them into regulars. Having a nice base of regular customers is the quickest and least expensive path to success for bars and restaurants. Consider email marketing first. It's essentially free. Don't think one form of marketing is going to pack 'em in by itself either. Many business owners have wasted money on TV and radio ads that are poorly designed. No matter what the marketing medium, if you don't know the difference between effective advertising and ineffective advertising, all of it will be a waste of money.

Build promo drinks into your pricing. Empower your employees to comp a certain dollar value of drinks for customers in an attempt to win their loyalty, but make sure you have a system in place for monitoring these comps and policing the staff. A good, legal comp program will not only win regular customers cheaply, but will result in higher tips for your staff, improved morale and longevity of employment.

Know how much every person that comes through your door costs you to serve, then base your pricing structure on that magical number. Pricing should be based on your fixed costs and overhead, not percentages of product cost.

Know how to get the most out of the purchasing contracts you negotiate. You will NEVER be offered a "best price" up front for anything, whether it's alcoholic beverages, soft beverages, food, chemicals, paper supplies, credit card processing, property leases, cable/satellite/internet/phone services, equipment leases, vending agreements, etc. Every dollar you leave on the table during these negotiations will come straight out of your pocket.

Have set-in-stone daily/weekly/monthly reporting systems. If you do not know exactly how your business is performing on a weekly basis, your efforts toward conflict resolutions in your business will be ineffecient and costly.

Create a written system for conveying your expectations of your staff, your system for measuring their performance, and your goals for every individual. Have your policies in a manual, and a written agreement to them signed by your employees. Use job descriptions. Have an organizational chart to reference so everyone in the business knows the pecking order and who to approach with what problems.

This is all a little overwhelming I'm sure, but these things are the difference between successful businesses and failures.

If you would like an easy to use yearly budgeting tool, you can download one on the Samples page of my website at http://www.bodellconsulting.com/samples.htm.

For more help structuring your business, or just to have a knowledgable professional to talk to when you need it, contact me through my website, by email or by phone. My contact information is below.

Brandon O'Dell
O'Dell Consulting
Restaurants/Retail/Bars
[e-mail]
[phone]
http://bodellconsulting.com

Answer 9

Not sure about the unexpected expenses...but good luck!

Answer 10

We are Payment Resource International A TransFirst Company headquartered in Newport Beach, CA. I would like to take this opportunity to offer our payment processing services to your establishment. The following proposal provides services and company information.

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Besides our excellent customer service, PRI also offers a wide selection of marketing products and superior payment services that could benefit you in many different levels, for example:
Customized Online Reporting (For fast and accurate reporting of single or multiple merchant locations to simplify your bookkeeping)
Internet Billing (Payments over the Internet)
Recurring Billing (For monthly dues or subscriptions)
Electronic Check Processing (Various electronic check solutions are available, such as ACH Processing)
Wireless Terminals (Leading the way in compact design and software, while getting a swiped rate, useful for remote locations.)
Gift Card Programs (Terminal and Non-Terminal Based)

Below please find a short list of some of our more local merchants with PRI.
The City of Newport Beach, CA The City of Santa Monica, CA
The City of Fountain Valley, CA The City of Corona, CA
The City of Santa Ana, CA The City of Hawthorne, CA
The City of Mission Viejo, CA The City of San Juan Capistrano, CA
Fletcher Jones Motor Cars Mercedes-Benz SEMA (Specialty Equipment Marketing Association)
GSM Cingular Wireless (206+ Locations) Mercedes Benz of Laguna Niguel
Allegheny Power (Electric Utility) Grand Prix Performance
Forest Plywood US Green Building Council
Gen Kai Restaurant Cotkin, Collins & Ginsburg
Lawry’s Restaurants Mama Gina’s Restaurant
Traditional Jewelers Phillips Motorcars
Bungalow’s Restaurant Rogers Gardens
Marco Polo Restaurant Takakjian, Sowers & Sitkoff L.L.P
The Palisades Tennis Club Mardo Jewelers
Sir Speedy / Pip Champagnes Market Place
KOCE TV
Galardi Group’s - Wienerschnitzel / The Original Hamburger Stand (412 Locations)
The Santa Monica/Malibu Unified School District (18 Schools)


PRI prides itself and excels in providing superior services to all of our merchants, including accommodating them with the ability to have customized reports for their processing. For example, with our addition of the 206+ store chain for GSM Cingular Wireless and the City of Newport Beach, CA we provided and tailored a "gateway system" for all of their locations and their corporate headquarters. This enabled them to be able to view all of their accounts under one account, by region or by individual location online and in print, while still having all their locations report individually.

For Phone, Mail, Internet or transactions where there is a computer with an Internet connection available, we have a very sophisticated payment processing solution called Transaction Central “TC”.

This is a Virtual Terminal, which works through the Internet. So now wherever there is an Internet connection with a computer, you will now have a terminal. “TC” is Password protected and can be tailored to your specific requirements and needs.

What are its benefits?

You will have access to:
Sales (ACH Checking or Credit Card),
Recurring Billing (Can be set to Amount, Monthly, BI-Monthly etc.),
Voids and Credits,
And by far the most advanced reporting system in the industry. No longer will you have to wait for your merchant statement once per month. With “TC” you will have access to your account’s activity any time of day on a daily, weekly or monthly basis and with the ability to search by Merchant Id, Account Number, Date, Name, Sales Person, Amount etc.

We have setup for your review, a Test “DEMO” Account:
1)Go to: www.primerchants.com www.primerchants.com
2)On top left corner go to – Transaction Central
3)Once inside Login Page-
Id- 10479
Pass- 1234fjtq

“This is a tested and proven product that is currently being used by thousands of merchants across the country, many of which are retail leaders of our community.”

What Makes PRI Number One?

1)Customer Service: Our customer service is 24/7, 365 days a year. We will go the extra mile for all of our merchants at a moment’s notice, to insure that your processing needs are always running smoothly and trouble free to the fullest extent possible.

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We believe that not only will our very low competitive rates save you money, but that ultimately it will be our Services that you will benefit the most from.

If you have any questions or comments I can be reached at any of the numbers listed below.

Thank you for your time.

Sincerely,

Ruslan Serdyuk
Account Executive
Payment Resources International
A TransFirst Company
3 San Joaquin Plaza Suite 100
Newport Beach, CA 92660
Phone: [phone] x246
Toll Free: 888-729-3539 x246
Fax: [phone]
Email: [e-mail]