A bar business is a lucrative and profitable business venture. The bar business can be as simple or as complex as you like depending on your objectives. First of all; you must really enjoy the business and the people that are part of it. Running a bar pub is not just about the glamour and fun. There are times when you need to knuckle down into real management. At the same time this is not a business that is exclusive to hard men and shady types. There are perfectly good country pubs that hardly need a bouncer. It all depends on the atmosphere that you want to create in your bar business. This article explains how to start a profitable bar business.

To begin with you must conceptualize what constitutes “entertainment” for your target customers. For example, it may not be a good idea to open a loud sports bar in a retiring community yet the people living in that community may still need a pub. Do extensive market research and speak to the community before even thinking of opening up a bar business. You should also pay attention to the local ordinances and rules which govern such establishments so that you do not get into trouble down the road.

Setting up your premises

The bar club requires detail and every single design aspect must communicate a message that is congruent with your overall vision. This includes location, furniture, equipment and entertainment accessories. Given the possibility that you will store large amounts of cash and stock, security is of the paramount importance. That does not just mean installing the stereo typically menacing doorman but also CCTV and precautionary measures. For example, you need to build up alliances with nearby and related businesses so that you can be lookouts for one another.  It is not just about setting up security arrangements but also reviewing them from time to time in order to ensure that they remain fit for purpose. Do not forget to ensure that your property is fully insured by a reputable provider. This will protect the assets of your bar business.

Bar business


Understanding the Competition

Remember that your competitors are not just other bar clubs but the entertainment industry in general. Therefore, if there is a big game happening then you need to have the latest screen showcasing that game live. You can market your bar club as the accessible means to enjoying entertainment without having to confront rowdy crowds. At the same time the location you have may already determine the kind of customers that you are going to have, hence necessarily excluding others. For example, if you set up your bar business near a college campus then you can expect lots of frat and sorority parties. That means that you are hardly going to see any quiet middle class families visiting. This is one of those situations when you have to prioritize your core customers over others through exclusivity and branding.

Make sure you have a comprehensive bar business plan

The failure to plan is the beginning of business failure. The bar business plan must be clear and succinct enough to give your potential partners, clients and investors an overview of what your objectives are. At the same time, it must be detailed enough to explain the nuances of the business that you propose. At the very minimum you need to have the following included:

  1. The mission, vision and operational strategy
  2. Market Analysis And Customer Segmentation
  3. A business case showing that the business is financial viable and sustainable
  4. A marketing and customer care plan
  5. An organizational chart and human resource policy
  6. A three-year expansion outlook
  7. A risk and rewards Analysis

You will need to make an informed decision about the business type that you will adopt for your company. For example, you may decide to be a sole owner or may open up a Limited Liability Company (LLC) or even a Public Limited Company (PLC). Each of these options requires very specific application processes for permits and registrations. The business structure you select will determine who owns, runs and supervises the operations of the company. It’s also better to have a business website for your bar business.

Capital And Knowledge

The issue that is most likely to lead to a failure of the bar business is the lack of adequate capital. Another cause of failure is less detailed knowledge about the industry as a whole. Wealthy celebrities are able to experiment with this type of business because they can bank on their personal fame to sell even the most substandard product. They also have the money to recover from catastrophic losses. For the ordinary investor, there is no option but to research and invest wisely. The budget can vary depending on the size of the business. You can start your bar business with as little as $10 000. However, that outlay must include all the costs and contingencies because the bar cannot afford to face periods of under-funding.

Staff for the Bar Business

Recruitment, selection and training are critical to the success of your bar business. You need people who are not only experienced in the industry but also have a passion for what you are trying to do. The head bar man/woman will be responsible for ensuring that the front side is running smoothly and that there is no fiddling in the backroom. Do not scrimp and save on high quality staff because the failure to recruit appropriately may lead to significant losses.

If you plan to serve food, then you will need to hire a great cook that can work under pressure and yet produce delicious meals in a friendly environment. One of the mistakes that new bar business owners make is to assume that the clientele is often too drunk to recognize bad service when they experience it. The opposite is true. The typical bar pub customer can be quite picky and less likely to shrug off discourteous behavior from staff.


Sports bar

Do not forget the idea of social capital. At the end of the day, your bar business is something of a community asset. Therefore, you should make every effort to ensure that you are on good terms with your neighbors. Do not allow the premises to become a hub of criminality or antisocial behavior. If you allow that, the local community will come to ostracize the bar club itself. Instead you should present your bar business as a friendly and welcome addition to the community. Your excellent communication skills must filter down to the people that work for you so that you present a great image to the community.

Prospects of the bar business

According to the Distilled Spirits Council (DSC) briefing; the spirits industry alone generates $72 billion worth of economic activity per year in the USA alone. This is the principle selling point for bar businesses but there is much more that they can sell including food, snacks and even live entertainment. The first six months will be the toughest when you are getting to know everybody. The customers will be relatively new to your bar business. However, the typical bar business is able to recover the entirety of the initial investment in less than three years.

Try to be proactive and imaginative in the products that you sell. For example, micro-brews are becoming very popular particularly if they are locally made. You can use this as a marketing strategy by becoming a major distributor for amateur and professional brewers in your locality. When the business is well established you can convert into a specialist brewer as well; based on your knowledge and expertise.

We wish you the best in your bar business! Check out our collection of business plans , and more business ideas