The idea of buying a bar may conjure up lively times with good friends and drinks. Perhaps you’ve always wanted to own a place where everyone knows your name. But owning a bar isn’t always cause for celebration; there’s definitely a serious side.
Being a barkeep can mean taking on long hours, giving up your weekends and holidays and dealing with the occasional unruly customer. Competition can be tough in this industry, but owning a bar can also be a successful enterprise if you have a clear vision and are you're willing to work hard.
Here are 9 things to consider before purchasing a bar:
1. Do you have the personality to own and run a bar?
Even if you don’t plan to tend the bar yourself, you need to be a people person to be successful in the bar industry. Being a night owl and being responsibie with your on liqour intake is also important.
You need to be accepting of different types of personalities. You will likely have employees who have other priorities such as school or alternative employment that take precedence over their job at the bar. If you have the choice to be “hands off” in your business, make sure you hire good managers.
2. What kind of bar is right for you?
There are many different types of bars available for purchase, from the local neighborhood bars, trendy wine bars, dance clubs, popular microbrews, or sports bars.
Keep in mind that the type of bar you choose will play a big factor in your operation costs. For example, you will need excellent audio and visual technology if you want to compete with today’s sports bars that offer football and other sporting events.
3. Who is your target market?
The bar industry has a high failure rate, so it’s important to identify your target market to make sure you are meeting their needs. Does the bar you're interested in have a concept, location and size that works for current and potential customers? Is there potential for growing the business or do you need to focus on improving it first?
4. The location of the bar
There is some debate in the bar industry surrounding the importance of physical location. Some bar owners consider the location to be of enormous importance, especially if your goal is to get local foot traffic.
Others say people will seek out your bar for a reason, as you create a buzz and make your bar a destination. Regardless, you should take into consideration safety, parking and accessibility to customers when choosing a location.
5. The name of the bar
The name of your bar should speak to your concept. If you need to rename the bar you buy, brainstorm names until you find one that you absolutely love. Answer these questions to spark some creativity:
• How well does the original name fit with your own concept?
• What type of customer does the name appeal to?
• What expectations does the name imply to customers?
• Is this name easy for customers to remember and then find online?
6. How will you track liquor and food sales?
The level of sales you expect should help you decide on an accounting system. Theft can be a problem at all levels, not just with bartenders.
In a cash-and-carry system, the drink is paid for by the customer before it is rung up. It’s the fastest way to do business, but also invites giving drinks away for free. Alternatively, a point-of-sale system is the most efficient and effective way to track sales. However, these systems can be expensive. Regardless of which route you choose, having some type of inventory controls in place will be key.
7. Do you have enough capital to keep the business going?
Many bars fail due to being undercapitalized. Experts recommend having enough money on hand to operate for a year including at least six month's worth of rent and operating expenditures.
Even if you've got this far without raising finance, having access to good working capital will help you avoid stormy weather if something goes wrong. If you'd like more guidance on funding options, you can read our guide on loans for small businesses.
8. Marketing the bar
It’s important to get word-of-mouth buzz going about your bar. That will come from customer referrals and targeted promotions you offer. Community events and charity functions can also help bring exposure to your business.
And of course, have a strong digital presence is crucial to survive in any industry. Having active social media accounts will build brand awareness, help you connect with your community, and it will help you analyze what your competitors are doing. Likewise, having a website that includes a booking system will benefit both you and your customers.
9. Latest bar trends
Stay up to date on the latest industry trends by reading trade magazines and blogs to find ideas for promotions, additions to food and drink menus and marketing advice.
A savvy bar owner will look at regional, country wide and international trends too, in order to keep ahead of local competition.
The bar industry is not a business to get into if you are just looking to have a place to hang out. But while every night may not be a party, the bar business could be lucrative if you are organized. Remember that as a bar owner, your role will be more of a facilitator of fun rather than participant.
So, are you ready to be a bar owner? Discover multiple bars for sale in the United States, and kickstart your new business venture!