Running a Bar For Dummies E-Book

R. Foley

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 537

Veröffentlichungsjahr: 2014

Beschreibung

Get insider details on how to operate a successful bar Running a Bar For Dummies, 2nd Edition shows established and future bar owners how to establish and maintain a successful business. Using clear, concise language, this For Dummies guide contains all the information you need to start your bar off on the right foot. From grand opening to last call, you'll discover the insider tricks that keep the business end running smoothly and the customers happily engaged. With updated information on marketing and social media, the book walks you step by step through the entire process, revealing the nitty-gritty details most new bar owners only discover after starting. The bar business continues to grow; however, securing running capital and having knowledge about the business are cited as the two biggest reasons new bars fail. Running a Bar For Dummies, 2nd Edition shines a light on these issues to help bar owners prepare properly. The book helps you find your way through the maze of licensing and permits, developing a business plan, and preparing for your grand opening, plus offers clear, no-nonsense guidance on dealing with tough customers. Every step of the way, Running a Bar For Dummies, 2nd Edition is a reference you can count on. * Understand the bar business and important legal issues * Stock the necessities, including equipment and inventory * Promote your business using marketing and social media * Manage expenses and control cash flow When run correctly, a bar can be an extremely profitable business, but the key to success is knowing exactly what you're getting into. By recognizing common problems and teach you how to adapt quickly to changing conditions, Running a Bar For Dummies, 2nd Edition provides the information you need to develop those skills, and get your bar started.

Leseprobe

Running a Bar For Dummies®, 2nd Edition

Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com

Copyright © 2014 by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

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Library of Congress Control Number: 2013958309

ISBN 978-1-118-88072-2 (pbk); ISBN 978-1-118-88070-8 (ebk); ISBN 978-1-118-88077-7 (ebk)

Manufactured in the United States of America

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Running a Bar For Dummies

Visit www.dummies.com/cheatsheet/runningabar to view this book's cheat sheet.

Table of Contents

Introduction

About This Book

Foolish Assumptions

Icons Used in This Book

Beyond the Book

Where to Go from Here

Part I: Cheers! Getting Started in the Bar Industry

Chapter 1: Bar Business Basics

Deciding Whether the Bar Business Is Right for You

Why do you want to be in the bar business?

What do you expect to get out of your place?

Starting Fresh or Taking Over an Existing Bar?

Location, location, location

Getting in with the right people

Staying on Top of the Latest Bar Trends

Figuring Out Your Financial and Legal Obligations

Setting yourself up to succeed

Hiring other people to help you steer the ship

Bringing In the Crowds and Keeping Them Coming Back

Chapter 2: Understanding What It Takes to Own and Operate a Bar

Social Skills 101: Do You Really Like People (And Their Problems)?

Considering your motivation

Mastering the key traits of a successful bar owner

Checking your expectations

Staying on the Positive Side of the Success–Failure Rate

Why do so many fail?

Figuring out why others succeed

Understanding the Financial Ramifications

Preparing yourself for personal guarantees

Accepting the worst-case scenario

Looking at the upside

Balancing Your Bar Life with Your Personal Life

Combining your professional and social lives

Celebrating holidays, birthdays, and other special times with family and friends

Getting support from your family

What if you really need a vacation?

Chapter 3: Minding the Money and the Law

Figuring Out Your Start-Up Costs

Financing Your New Business

Contacting a bank

Beg, borrow, or sweat: Finding partners

Familiarizing Yourself with Liquor Laws and Other Legalities

Obtaining a liquor license

Other legal requirements

Getting to Know the Health Inspector

Establishing a regular cleaning schedule

Avoiding cross-contamination

Keeping critters out

Bringing In the Big Three: Accountants, Insurance Agents, and Attorneys

Hiring an accountant

Working with an attorney

Protecting yourself with insurance

Taking Over an Existing Bar: Some Things to Watch For

Looking Closely at Contractor Paperwork

Getting your Certificate of Occupancy

Fire codes and capacity

Chapter 4: Deciding What Type of Bar to Have

Determining Your Bar’s Potential Market

Conducting your own market research

What type of clientele do you want?

Using competitive analysis

Scratch that niche: Identifying an opportunity

Exploring Your Options: What Kind of Bar Do You Want?

Sports bar

Local drinking establishment

Upscale lounge

Martini bar or lounge

Wine bar

Bar and grill

Live entertainment venue

Remembering to Choose One Theme and Be Good at It

Part II: Gearing Up to Open the Doors

Chapter 5: Putting Your Business Plan Together

What’s a Business Plan and Why Should You Create One?

Considering the Benefits of Having a Business Plan

Looking at the Parts of Your Plan

The cover page and table of contents

Your business concept

A sample drink and food menu

Market analysis and clientele demographics

Your management team

Putting Your Financial Forecasts on Paper

Forecasting your sales

Forecasting your expenses

Forecasting your cash flow

Generating an income statement

Creating a balance sheet

Chapter 6: Selecting Your Bar’s Site, Décor, and Name

Finding Your Bar’s Ideal Location

Is location truly everything?

Identifying possible areas

Knowing what to avoid

Considering traffic and parking in the area

Thinking about a location’s security

Comparing an apple (martini) to an orange (whip): The final choice

Choosing and Establishing Your Bar’s Name

The name: A few words about your bar

Protecting your bar name and trademarks

Picking Out Your Bar’s Décor

Finding furniture

Looking at lighting

Figuring out flooring

Working on the walls

Considering environmental branding: Sights, sounds, and smells

Fun and Games: TVs, Video Games, Pool Tables, and More

Tuning in with TVs and programming

Considering games for your bar

Music, Professor! Jukeboxes, DJs, and Live Tunes

Getting your jukebox

Finding and signing live performers

Hiring a DJ or karaoke company

Chapter 7: Stocking Up on Smallwares and Equipment

Picking Out Your Bar Equipment

Getting your glassware

Touching on basic bar tools

Stocking up on smallwares

Stocking the table

Acquiring Bar Appliances

Selecting Kitchen Appliances

Leasing versus Buying, New versus Used

Looking at leasing

Negotiating for new equipment

Evaluating used equipment

Chapter 8: Setting Up Your Bar’s Inventory

Creating Your Storerooms

Tracking your day-to-day inventory

Securing your inventory

Keeping Your Inventory Well Stocked

Stocking your drink items

Stocking your basic food items

Items for the Back of the House (Like Restrooms!)

Chapter 9: Planning and Creating Your Menus

Planning Your Food Menu 101

Figuring out what kind of food to serve

Considering what hours to serve food

Determining the size of your menu

Analyzing your kitchen space

Thinking about signature dishes

Establishing good-quality recipes

Planning Your Drink Menu 101

Selecting beers for your menu

Creating a signature cocktail menu

Planning your wine list

Including nonalcoholic drinks

Pricing Your Menus Right

Using food cost to price your menu

Pricing your drinks

Designing and Printing Your Menus

Experimenting with layout

Menu engineering basics

Writing the menu text

Passing along the costs to your vendors

Placing your menus in the bar

Making Changes to Your Menu

Part III: Employees, Customers, and Products: Managing the “Right Stuff”

Chapter 10: Hiring, Training, and Keeping Your Employees

Identifying the Players on Your Team

Front of the house: Bartenders, servers, hostesses, and security staff

Back of the house: Cooks and dishwashers

Managers

Finding the Right Employees

Sourcing potential employees

Interviewing candidates

Testing bartenders and servers before hiring them

Selecting the best applicants for your bar

Making the job offer

Must-have forms for hiring staff members

Training New Employees

Creating standards and keeping them up

Providing on-the-job training

Developing a mentoring program

Improving Employee Performance

Growing employee skill sets

Motivating your staff

When It Doesn’t Work Out: Dismissing Employees

Looking at causes for immediate termination

Considering the legal issues involved

Changing staffing levels during a business slowdown

Chapter 11: Rule #1: Practicing Good Customer Service

Why Customer Service Is So Important

Making people feel important

Building customer loyalty

Training Your Team in the Art of Customer Service

Hiring people with a service mind-set

Answering the phone

Establishing service standards

Empowering your staff to make things right

Keeping your employees in the loop

Dealing with Difficult Customer Situations

Handling unhappy customers

Handling intoxicated patrons

What to do with troublemakers

Chapter 12: Boning Up on Bar Beverages

Knowing the Bar Basics and Then Some

Wondering about wines

Appreciating beer

Demystifying distilled spirits and liqueurs

Musing over mixers

Mixing and Pouring the Best Drinks in Town

Choosing your pouring strategy

Pouring the perfect beer

Maintaining your draft beer equipment

Considering the importance of ice

Shaking versus stirring

Prettifying Drinks with Garnishes

Having fun with citrus fruit

Other must-have garnishes

Rimming: Why, when, and how to do it

Chapter 13: Getting Ready for Your Grand Opening, Step by Step

Figuring Out How Much Time You Need to Prepare

One Year Out: Planning!

Nine Months Out: Finding Funds, a Location, and POS Systems

Seven Months Out: Signing the Lease and Setting Up Finances

Six Months Out: Getting Organized!

Five Months Out: Building and Buying

Four Months Out: Manuals and Menus

Three Months Out: Supervisors, Suppliers, and Vendors

Two Months Out: Preparing to Hire, Attending to Details

Six Weeks Out: Finalizing All Paperwork

Thirty Days Out: Navigating the Final Month

Ten Days Out: Fine-Tuning

Three Days Out: Dress Rehearsal!

The Day Before: Relaxing before the Big Opening

Part IV: Managing Your Inventory, Revenue, and Future

Chapter 14: Controlling Expenses and Operating Efficiently

Perusing the Power of Purchasing

Putting together your list of supplies

Finding the best suppliers for your bar

Using purchase orders (POs)

Reordering your supplies

Maintaining Your Bar’s Inventory

Par levels: Consistently keeping enough product on hand

Taking your bar’s inventory

Paying Attention to What Goes On in Your Bar

Reducing waste

Battling breakage

Reducing and eliminating theft

Watching out for your staff’s sticky fingers

Chapter 15: Keeping Your Bar’s Bottom Line from Hitting Bottom

Reading Your Income Statement

Deciphering Your Balance Sheet

Analyzing Reports in the Bar Business

Using a daily business review

Controlling cash flow

Creating a cost of goods sold (COGS) report

Setting Up Your Payroll System

Determining your payroll period

Doing payroll yourself or outsourcing it

Keeping and Protecting Your Records

Preventing identity theft

Hackers be gone! Protecting your computer system

Chapter 16: Building and Keeping Your Bar Crowd

Generating Word of Mouth

Making sure everyone knows your name (and logo)

Whipping up a website

Getting your employees excited about your place

Making the most of community involvement

Getting New Customers in the Door

Handling your first customers: The grand-opening crowd

Promoting your, uh, promotions

Drink and food specials

Making the most of music

Using Social Media to Build Your Business

Trying out Twitter

Finding friends on Facebook

Understanding Yelp

Figuring out Foursquare

Giving Your Customers a Reason to Come Back

Ensuring good customer service

Making changes to your business as necessary

Maintaining Your Success

Researching your competition

Staying marketplace savvy

Part V: The Part of Tens

Chapter 17: Ten Ways to Run a Safe Bar

Hiring Safely

Practicing Fire Safety

Using Video Cameras

Using Locks and Alarms

Preventing Slips and Falls

Installing Lighting

Checking IDs

Serving Hot Food

Keeping a First-Aid Kit

Following Handicapped and Discrimination Laws

Chapter 18: Ten Myths about Running a Bar

The Hours and Days Are Short

Free Drinks All Day, Every Day

There’s Not Too Much Paperwork

Your Family Will Want to Work for You

You Can Hire Good Help in a Snap

You Know Everything about Everything

Nobody Would Steal from You

Everyone Is Trustworthy

Everyone Loves the Boss

Anyone Can Run a Bar or Tavern

Chapter 19: Ten Bar Owner Sins Not to Commit, Ever

Depending on Your Friends and Family

Extending Lines of Credit to Customers

Allowing Gambling or Betting

Not Taking the Keys from an Intoxicated Patron

Believing the Customer Needs “Just One More”

Lending Money to Anyone

Becoming Romantically Involved with an Employee

Drinking and Working

Last Call Is Last Call. The End. No More!

Not Paying All Your Taxes

Appendix: Useful Websites for Every Bar Owner

Bar Supplies and Equipment

Beer

Spirits

Wines

Logo and Menu Design

Trade Associations and Industry Information

About the Authors

Cheat Sheet

More Dummies Products

Guide

Table of Contents

Begin Reading

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Introduction

The bar business is exciting. Every night’s a party. We’re thrilled you’re looking to get involved, and you’ve definitely come to the right place to get started. From the neighborhood bar to the local wine bar, opportunities in the industry have never been greater. This book is your guide to getting started in the right direction.

A lot of books have been written on being a bartender (heck, coauthor Ray wrote Bartending For Dummies!), but to run a bar, you have to be more than just a great bartender. To be the owner, you have to see beyond the glamour of standing behind the bar flipping bottles, pouring draft beers, and chatting up customers. You have to feel the anxiety, and the blood, sweat, and tears that accompany it. As you read this book, we think you will come to understand, if you don’t already, that the bar business really is a business. You crunch numbers, make sales projections, watch labor costs, and so on, just like in every other business. And ultimately, your success is judged like any other business, on your profitability.

Whether you’re a salty bartender or a cocktail waitress looking at your long-term goals, reading this book is a terrific step in launching your own business in the bar industry.

About This Book

You don’t have to pass an exam or earn a degree to prove you can run your bar. Instead, you have to work at it, gain experience, and have more than a little common sense. We wrote this book to help you to determine what skills you need to get into the business, and we help you figure out where you need to fill in the blanks. After you read the pages between these gorgeous yellow-and-black covers, you’ll have a good idea whether this is the racket for you — and you’ll have the knowledge to get started on the right foot. (Note: Sidebars, which look like text enclosed in a shaded gray box, consist of information that’s interesting to know but not necessarily critical to your understanding of the chapter or section topic. The same is true of any information marked with the Technical Stuff icon.)

You can find plenty of books that tell you how to open a bar, but you won’t find many about how to keep it open. This book does both. Why? Because even after opening day arrives, you can never stop improving your service, evaluating your product, scoping out the competition, or researching opportunities in the marketplace. Change is the only constant in this business. To succeed, you must anticipate and act on new trends, new pressures, and whatever else the market throws your way. The spoils go to those who see opportunities before they happen.

Foolish Assumptions

Bar owners have to make assumptions about the patrons sitting on the other side of the bar, and authors have to do the same thing — we have to make assumptions about our readers. With that in mind, we’ve come up with the following list of assumptions about why you’ve picked up this book:

You’re thinking about opening your own bar, and you want practical, how-to advice to accomplish your goals.You’re a bartender or other bar employee who wants to take your experience to the next level and manage a bar.You’ve never worked in a bar but you’ve had success in other professional endeavors and have skills that you may be able to apply to this business.You buy every book that sports a yellow-and-black cover.You currently own or operate a bar, and you’re seeking advice, tips, and suggestions to keep things running smoothly and successfully.

Here’s another assumption that we’ll address right now, just in case you’re carrying this common misconception: Don’t think that you should open a bar because you want a cool place to hang out. It’s tough to sit down in your bar and actually relax. Typically, you can’t turn your management mind-set off just because your friends or family come in. You’re too busy watching cocktails being made, looking at paper scraps on the floor, or looking at plates of food going by, doing a sort of on-the-fly quality check. If you take time to actually sit down during a shift, you lose your control or awareness of what’s going on. Even if you come in on the one day a month you’re off, you’ll still probably be distracted by what’s going on around you. Remember that when you’re in the bar business, you’re married to it!

Icons Used in This Book

Icons are the cute little pictures that appear in the margins of this book. Here’s the guide so you can tell what they are and what they’re for:

The Tip icon calls your attention to ideas that can make your job easier and help you sidestep problems. The tips often give you handy ideas on ways to improve your business today.

The Remember icon points out where we reinforce the concepts we discuss. If you’re in a time crunch and can’t read the entire chapter, you can go straight to this icon and still come away with some very useful information.

The Warning icon alerts you to potential pitfalls and gives you a heads-up on mistakes to avoid. Pay attention when this icon rears its head because it’s there to show you something important.

The Technical Stuff icon alerts you to interesting, but not critical, background information about the subject being discussed. You don’t have to read the information to understand the ideas and concepts, but you may find it interesting nonetheless.

Beyond the Book

In addition to the material in the book you’re reading right now, we’ve put some access-anywhere extras out on the web. For the scoop on figuring out beverage costs, questions to ask the alcohol control board, must-have bar items, and more, check out the free Cheat Sheet at www.dummies.com/cheatsheet/runningabar. Also, be sure to visit www.dummies.com/extras/runningabar for free articles about incorporating beverage trends into your menu, social media sites for bar owners to join, and mobile apps for bar owners.

Where to Go from Here

Because this is a For Dummies book, you don’t have to read it in order, word for word, front to back, cover to cover. If you prefer, you can check out the corresponding part, chapter, or section and read up on the issue that most interests you, rather than plow through the entire book. You can find out what you want to know without first having read the information that precedes it. In other words, this book gives you get-in-and-get-out convenience. You can start wherever you want and read whatever you want. You can jump around and finish reading when you feel like it. So grab your bar towel and get going. Interested in tips for improving your drink menu today? Turn to Chapter 9. Do you need a test to quiz your soon-to-be hotshot bartender? Take a look at Chapter 10. Looking to get started on a new business plan? Flip over to Chapter 5. Need help choosing a name for your new place? You gotta see Chapter 6!

Part I

Cheers! Getting Started in the Bar Industry

Stop by www.dummies.com for great (and free!) Dummies content online.

In this part …

Understand just what kinds of issues and experiences you may encounter in your bar or pub.Set realistic expectations for what running a bar is really like. Consider whether you can handle the specific work-life balance challenges that the bar industry is famous for.Identify key players on your team (like an accountant) who can help you achieve your dream of owning a bar. Look at the ins and outs of what the business is like on a day-to-day basis.Look at the legal issues surrounding the bar industry.Refine your ideas for what kind of bar you want to run. Check out several hot concepts in the bar business.

Chapter 1

Bar Business Basics

In This Chapter

Understanding the basics of the business

Deciding whether you have the necessary skills

Think of all the great times people have in bars. They meet for girls’ night out, bachelor parties, reunions, birthdays, or just because it’s Thursday. They come to celebrate, relax, or have fun. It’s a fact: People like bars. So it’s not a leap for people to think “Hey, I enjoy hanging out in bars, so I may as well get paid to do what I enjoy — hanging out in bars.”

Viewed from the bar stool (on the public side of the bar), it’s easy to miss all the hard work that goes on to make hanging out in bars fun for everyone else. When you have to manage every detail — such as hiring the music, choosing the lighting, designing the menu, and picking up trash in the parking lot — the bar business quickly becomes more work than fun, so don’t be fooled.

In this chapter, we take you on a quick tour of the business. We explore your reasons for getting into the business and help you check your expectations for your new venture. We introduce you to what you need to know to understand and maximize the true financial performance of your new venture. And finally, we inspire you to keep reaching out to your patrons. Look at the other chapters in this book for more detailed information about these topics and other important points to know about getting your bar going and keeping it running.

Deciding Whether the Bar Business Is Right for You

The bar business world is more than a party every night of the week. It’s actually a business. Those owners who look at it as a business ultimately have a much greater chance of succeeding. You can’t just give drinks to friends or offer drink specials too deep to turn a profit. You can’t order too many bottles of whiskey only to (not) see two of them walk out the door. You have a tremendous opportunity to make a great career out of a fun business if you’re willing to put in the effort and use some common sense.

Why do you want to be in the bar business?

The bar business is tough for some people to relate to because you’re selling an experience rather than something that’s physically packaged that you can hold. Instead, your product is packaged in many layers, from the music you play, to your furniture and lighting choices, to the beers you have on draft. All these things make up your packaging, affect the costs of doing business, and affect your patron’s decision to hang out at your place or move on down the street.

Think about these questions when you’re contemplating your decision to take the plunge and run your own place:

Do you really like people? An odd question on the surface perhaps, but running a bar doesn’t afford you a lot of quiet, contemplative alone-time. Make sure you can stand the onslaught of conversation and complaints.How do you handle your own liquor? For some people, running a bar is like giving a kid the keys to a candy store. The liquor is always available, and they don’t seem to know when to say “when.”Are you a night owl? Think about your own internal clock. When does it turn on and shut off? If you like to be up until 2 or 3 o’clock in the morning, this could be the industry for you.Are you ready to baby-sit adults? As the owner or manager of the bar, you have many employees, suppliers, and customers who need your attention. Sometimes you’re the one who has to cover a missed shift on the fly. Occasionally, you have to handle a late shipment of liquor that arrives inconveniently at 6 o’clock on a Friday night. Most likely, you’ll need to attend to a patron who needs a cab. Whatever the scenario, tag — you’re it.

Make sure you spend some time reading Chapter 2 to get a feel for what the business is really like before you invest serious time and money in developing your ideas.

What do you expect to get out of your place?

Now’s the time for you to sit down and create your plan for what your bar should be. Early on, create the pie-in-the-sky version of your ideal place, including a menu (both drink and food), and even draw up mock floor plans. Figure out where you want your stage and TVs to go, how many bars or wells you might have, what your theme is going to be, and so on.

Make sure you figure out what you, as a person, want to get out of the occupation of running a bar. Think about these questions:

How much time do I want to dedicate to work? Running a bar takes a lot of time, just like managing any other business. The key difference, though, is that the time tends to be during nontraditional work times. So when the rest of the world is out having a good time, you’re providing the good time.How much time do I need to spend with my family? If you like to spend nights and weekends at home, this may not be the business for you. But if you’re open to finding other times to enjoy each other, you can make it work.How do I like to spend my free time? If you enjoy talking with people, listening to music, and playing an occasional game of pool during your free time, you’ll probably enjoy this work. But remember to draw a clear line between your business and personal lives.Do I like having any free time? When you own your own business, you don’t have lots of free time in the beginning. If you hire the right staff members (see Chapter 10 for help) and train them right, you can work your way into delegating some of your jobs.

Eventually, you must take certain steps to plan your business so it’ll be a success before you can open the doors and enjoy it. In fact, we recommend you start planning as soon as you can so you can decide whether your plan is a viable one.

Create a timeline for getting your business up and running (Chapter 13). Decide exactly what kind of bar you want to run (Chapter 4). Choose a name that suits it (Chapter 6). Develop a detailed business plan and use it to find and secure financing (Chapters 5 and 3, respectively). Find the best location for your new bar and get the right licenses and permits as soon as you can (Chapters 6 and 3, respectively).

Starting Fresh or Taking Over an Existing Bar?

The decision to open a bar is a big one. Sometimes people are just sort of considering the idea, and then — out of the blue — they fall in love with an existing location, immediately imagining themselves behind the bar, spit shining glasses. Other people build their dream bar in their mind’s eye from the ground up. They have very specific ideas about every physical detail of their place. And naturally, they want to physically build it from the ground up, as well. Depending on your schedule and budget, you can make either scenario a success if you keep certain things in mind, which we explore in this section.

Location, location, location

The bar business is a bit of a different animal. Location definitely matters as it does in any business. But what defines a great location is in the mind of the beholder.

Some people choose to buy or build a bar in an already booming area (and choose to pay higher rent) to get a leg up on getting people in the door. Others think it’s better to speculate a bit and get in on the ground floor of an up-and-coming neighborhood, in the hopes that the area will be the next “hot” thing. They save on rent, but usually spend more promoting their business and have to wait a while to see a return on their investment. The choice is yours.

To help you figure out which way to go, and other specifics about finding the right location for your bar, check out Chapter 6.

Many small neighborhood bars are not in what people would consider ideal locations, but the people who patronize them love them and wouldn’t think of going anywhere else. In most cases, these places have been around a long time. If you’re taking over a location like this, it’s important to figure out what’s working already. People have sought out this place for a reason, so you need to figure out what that reason is to avoid messing it up. Don’t just come in and change everything; instead, meld your ideas with the existing business to make it work for you.

Don’t alienate your built-in clientele unless you have to, and then make sure you can replace them with another clientele, through marketing, advertising, and other means.

Getting in with the right people

We’re not talking about the celebrity A-list crowd here. Instead, we mean the barrage of people who can help you alter your space to fit your needs. Most people starting a new business want to change a few things at their new location. Maybe you need to add a wall to create a quiet area away from the stage. Maybe you need to upgrade the bathrooms to comply with the Americans with Disabilities Act regulations. Or maybe you need to install a more comprehensive air-filtration system to keep cigarette smoke away from your customers.

A contractor can save you lots of time and trouble. Don’t hesitate to ask questions of a couple of different ones and check their references. Chapter 3 has tips on finding and hiring a contractor.

Here’s a quick list of a few hired helpers to keep on speed dial, depending on your concept:

A good equipment-repair technician: Very important, especially if you’ve purchased used equipment that always needs to be in working order.A plumber who works nights and weekends: Toilets back up even on busy Saturday nights.A handyman: Someone who has restaurant experience is a huge plus. You never know when you’ll need someone to solder a table leg, replace a window, or fix a crack in your sidewalk on the fly.An electrician: He can help you set up dimmers, hide wires and components in places you didn’t know were available, and rig up lighting for your stage.

When buying a new cash register, make sure the vendor you buy it from offers 24-hour service. You don’t want to find yourself in the position of not being able to accept payment or make change if your register suddenly goes on the fritz at midnight.

Sometimes you get lucky, and someone on your existing staff has some of these skills. Make use of them. The staffer feels good because you recognize his talent, and you save the cost of a service call.

Staying on Top of the Latest Bar Trends

To be successful in this or, really, any business, you need to take care of your business today, tomorrow, and years from now. One of the best ways to do this is by staying up on trends in the bar and restaurant businesses.

By watching food and beverage trends across all food service outlets, you can

Find great additions to your food and drink menu. Watch what bartenders and mixologists in larger markets are doing for inspiration to create a new cocktail, for example. Read the trade magazines (including Bartender magazine), trade papers, and Internet sites dedicated to cocktails and drink ideas, such as coauthor Ray’s site www.bartender.com.Consider new categories of food service. If you serve traditional pub grub, maybe you want to try serving some small plates, or tapas, that still match your core menu ideas. For more on tapas or other kinds of food menu items, take a gander at Chapter 9.Meld your core concept with what’s hot in the industry. You can keep your concept fresh while still keeping your core identity. Look for different fruits that seem popular with patrons (currently yuzu and fruit ciders top the list) and incorporate them into your signature cocktail, for example. Tea and vegetable ingredients, such as hot peppers and beet juice, are also really popular at the moment. Consider adding these flavors to new menu offerings that work within your bar’s parameters.Stay ahead of the pack. Get ideas from promotions and marketing ideas that work in other markets, and be the first to bring them to your town.

Ultimately, you’re competing directly with all the other bars in your area. You’re also competing indirectly with local restaurant bars and even carryout liquor stores nearby. So keeping an eye on what’s going on closer to home is essential. You don’t want to copy them and adopt a me-too approach to innovation, but you want to know what they’re up to. Check out Chapter 16 for details on how to keep up with and stay a step ahead of your local competition.

Your liquor sales reps can be a great source of information for you in many respects. They also call on restaurants, so they can help keep you in the know about all the goings-on around town.

Figuring Out Your Financial and Legal Obligations

Owning a bar is an expensive and potentially risky proposition. As with any new business, you budget your costs, forecast your sales, and hope the sales exceed the expenses. But, to be successful, you have to do more than just hope. You need to do your homework and get your detailed plan together first.

Setting yourself up to succeed

You’ve probably heard “Failing to plan is planning to fail,” and it’s as true in this business as it is in any other. Successful businesses don’t just happen; people make them happen. Sure, some people do get lucky, but most can only capitalize on that luck if they’re watching their business and actively managing it.

Here are some tools that can help you keep an eye on your business, evaluate your successes and failures, and reap the greatest financial rewards:

A business plan: Hands down, a business plan is the best tool for figuring out how much money you need to get started, and why, when, and how you’re going to turn a profit. Check out Chapter 5 for the steps to create your own. (It’s not that painful, we promise.)Income statements: An income statement summarizes your expenses and sales and gives you the bottom-line profit for the month (or the quarter, year, and so on). Take a look at the sample in Chapter 5 to see what this looks like. For more details on using it in your business on an ongoing basis, turn to Chapter 15.Cash flow reports: A cash flow report tells you when money is coming in and going out of your bar. It shows you exactly when, where, and how you’re spending (and collecting) all that cold, hard cash. Take a look at Chapter 15 for help on creating your own version of this exceedingly helpful tool.Inventory counts: Counting your inventory on a regular basis is crucial to your success. You buy ingredients (like liquor, juice, or even French fries), turn them into products (like cocktails and food items), and then sell them to your patrons. Physically counting your inventory and comparing it to what you should have (based on your invoices and sales numbers) tells you how much of your product is actually making it to the tables and bar top in your bar. It helps you see how much you’re wasting or, sadly, how much people are stealing from you. Check out Chapter 14 for tips on managing your inventory to maximize your profits.

Hiring other people to help you steer the ship

Hire an accountant early in the process of setting up your business. She can help you get your numbers together for your business plan, which is a must-do if you’re trying to get financing for your venture. Chapters 3 and 5 give you the details. After you’re up and running, you’ll analyze your monthly financial reports and look for ways to improve the numbers. A good accountant, preferably one with restaurant or bar experience, can help. Take a look at Chapters 14 and 15 to know which numbers to watch and why.

An attorney can help smooth the start-up process by getting all your legal paperwork in order quickly. He can help you review contracts with suppliers, establish partnership agreements, file your permits, or maybe incorporate your business. Depending on how you set up your business, you may need to draft a partnership agreement or two. Watch for details in Chapter 3.

Insurance is a financial necessity for any business owner. You need protection in case a water pipe bursts, a fire breaks out, vandals break in, or — worst-case scenario — someone sues you. Make sure you get a good insurance agent from the beginning. Chapter 3 can help you get the right one for you.

Bringing In the Crowds and Keeping Them Coming Back

Getting people in the door is important and, frankly, not terribly difficult. The hard part is making sure they have a great time, so great, in fact, that they want to tell their friends and come back night after night, week after week.

Here are some beginning steps to get you thinking about your long-term plans for bringing in the crowds:

Figure out what’s truly special and unique about your bar. Write it all down, even if you never show it to anyone else. Take a look at Chapter 4 for help.Decide who your customers are. Are you interested in drawing a college crowd or after-work yuppies? Do you want sports fans or music lovers?Figure out what kinds of things attract them. Maybe it’s free stuff (like key chains and magnets with your bar’s name on them), or maybe it’s live music or all football, all day. Check out Chapter 6 for more entertainment options.Look at ways to communicate that your bar matches your customers’ wants. Connect with your customers where they are. Maybe it’s in the college newspaper or on a banner in the subway or on the back of a ticket stub from the local baseball team. The possibilities are endless, but you have to get creative to get noticed. See Chapter 16 for more ideas.Engage in an ongoing conversation with your customers. It’s never been easier (or more necessary) to get real-time, relevant feedback from customers than it is today. Social media sites (such as Twitter, Facebook, and Instagram) are tailor-made for users to give their opinions and share their experiences with other people. Your patrons can be your biggest ambassadors. Respond to their questions and ideas. Ask their opinions. Repost their pictures of your food and them having a great time with friends in your place. Chapter 16 can help you get started.

Chapter 2

Understanding What It Takes to Own and Operate a Bar

In This Chapter

Figuring out why (and whether) you really want to do this

Debunking the myth of inevitable failure

Facing financial realities

Getting a handle on the time involved in running a bar

A bar is a place to celebrate, relax, and have fun with friends … for the patrons. You, on the other hand, work in this place. While it’s definitely fun, it has a serious side. You have to be responsible for everything and everyone in the joint. You have to make sure everything’s going smoothly, patrons are happy, and the laws related to running your business are followed to the letter.

In this chapter, we help you get a handle on the reality (not the scripted, “reality TV” version) of what it’s like to run a bar. We help you get a sense of the time commitments, the financial obligations, and the sacrifices you make as a bar owner. We also help you sort out your own motivations and expectations to make sure you’re going into the business with your eyes wide open.

Social Skills 101: Do You Really Like People (And Their Problems)?

To succeed in the bar business, you have to be accepting of lots of personalities, schedules, and priorities that aren’t yours. Whether you’re dealing with customers, employees, or a sales rep trying to place the latest in a long line of apple vodkas in your bar, you have to develop a thick skin if you don’t have one already.

Patrons are convinced you added too many beers to their tab. Another group knows they were next in line for a pub table. Someone else thinks you’re watering down the drinks. All headaches that you have to handle with a smile, or you risk losing your clientele.

Employees often have jobs in addition to the one at your bar. Or they may be just working for you temporarily, between “real jobs” or between school years. Although bar employees know they need to be at work to get paid, they tend to be very socially active. So you’ll have to balance schedule requests, last-minute call-offs from employees who had too much fun the night before, and workers who completely drop off the face of the earth. The bottom line is that, many times, this job isn’t an employee’s first (or second or third) priority, and you’ll need to find a way to deal with it.

You are in the people business. You have to compete for clients and employees. Accommodate them, but don’t let either group walk all over you.

Considering your motivation

Why do you want to be in this business? It’s not a rhetorical question, or at least it shouldn’t be. You should know the answer, even if you don’t share it with us. Seriously consider the question and write down the answer.

There are lots of great reasons to want to run a bar. Here are a few of our favorites:

You love a fast-paced, dynamic work environment.You love taking on a challenge.You’re passionate about mixology.You love tending bar and want to make an investment in your financial future.You have a passion for spirits, beers, and liquor.You’re continuing the family tradition.

And the following list contains a few reasons that should send up a red flag in your mind:

You think it will be fun.You want a place to hang out.You’re tired of having a “real” job.You spend most of your time in bars, so you may as well get paid for it.You want to kick back and take it easy.

If one or more of these reasons sounds familiar, don’t be completely discouraged. Just make sure that motivations such as these aren’t your only, or even your primary, reasons for wanting to get into the business. And do some further investigation before making the financial, personal, and professional commitment to the business. (See the “Checking your expectations” section for some hints.)

Mastering the key traits of a successful bar owner

Every bar owner injects her own personality into her place. In fact, many people start their own bar because they want it to be different from other places nearby. But most successful bar owners have certain qualities in common. We cover some of these points in more detail later in the chapter, but for now, this list gives you the inside story:

Business savvy: Despite people partying it up in your bar, it’s not a constant party for you, the bar owner; it’s a business. In fact, if more people looked at bars (and restaurants for that matter) as a business, they’d probably have more success. Skills that you’ve learned, developed, and honed in the “real world” can apply to the bar business, like buying skillfully, managing tactfully, and negotiating shrewdly.

Set up your controls and systems for purchasing, cleaning, scheduling, training (and all the other -ing words you need to run your business) before you open your doors. Consider the long-term consequences of your decisions before it’s too late to make the right choice. Learn from your mistakes and build on your success, just like you would in any business.

High energy: Owning a bar means lots of long hours on your feet. Employees take their cue for how to deal with the physical stressors of working in a bar from you, their fearless leader. Show (rather than tell) them how to keep their energy up and keep the personality “on” at all times during their shift. Your bar can’t have a positive vibe if you don’t.

As a manager or owner, one of your jobs is to promote a positive attitude and energy in the restaurant. You can have positive interactions with customers all day long and make a difference. But if you extend those positive vibes to include exchanges between you and your staff, your staff can in turn extend the good vibes to your customers. That’s your goal, because the positive energy can quickly transfer to your clientele as well. If you like to have fun but you’re serious about doing the job right, it shows. And it translates into success.

Ability to hold your own liquor, or just say no to it: For some people, managing a bar is like getting the keys to the grown-up candy store, and the temptation is too much to resist. As a barkeep, you often drink as part of your job. Whether you’re tasting a new line of flavored rums, checking a freshly tapped keg, sampling a “bad” bottle of wine, or joining your regular customer with a glass of wine or a beer close to closing time, in the course of your daily job you may have occasion to drink. No matter what the circumstances, you still have to count the money at the end of the night. Or you have to be ready to go first thing in the morning.Trust: You need to be able to trust and depend on other people if you want to run a bar. You can’t be there all the time that you’re open, and if you are, you’re going to grow old quickly in an industry that already wears down the best of us. Surround yourself with people you trust and think are smarter than you. Easier said than done, but the successful people in the industry are successful at doing just that.Flexibility: Achieving success and maintaining success are two very different things. As a bar owner, you should be constantly looking at ways to increase your business and keep your clientele interested in your bar, your atmosphere, and your beverages. You have to be in the know about what the other bars are doing and be willing to change your own game plan as necessary.

Look to your liquor reps to help educate you, your staff, and your customers about new products on the market. Try out different entertainment options on different nights of the week to appeal to different groups of people. Run food specials to see what kinds of stuff intrigue your patrons. See Chapter 16 for more ideas about marketing your bar.

Checking your expectations

Running a bar, either yours or someone else’s, is a huge commitment. It requires long hours, constant vigilance, and the ability to control potentially chaotic situations — on a daily basis.

Take out a pen and some paper. Divide the paper into two columns. In the first, list all of your expectations for the future of your bar and your career. List everything you can think of, big and small, specific and general, that maps in some way to your career in your bar. Consider what you picture your family life being like, your goals for the bar, the general sales figures and profit numbers you anticipate — everything you can think of. This is your chance to put your dreams on paper. Then, in the second column, write down what you expect out of yourself to make this happen. Take into account your contribution in terms of time and money, any sacrifices you’ll have to make, and anything else that you can think of.

Figure out how realistic your expectations are. Talk to your business partners to see whether their ideas mesh with yours. Show this list to your significant other and make sure you’re both on the same page about goals and sacrifices the family may make for the business to succeed and vice versa. There are no right or wrong answers. It’s all a matter of articulating your ideas, sharing them with the appropriate people, and following through on your commitments.

To get an even better understanding of what your days and nights will be like, remember that your day will be filled with solving problems. Training and retaining employees. Reading all the news from your area to keep up with the sports and world events because that’s what you’ll talk about all day. You must keep your patience intact. Patience is your greatest asset. You will be dealing with people all day, and they change every day. Coauthor Ray’s old friend used to say, “People are all the same, just different faces and stories.” You must love people to stay in this business. You will have fun and learn a lot every day if you keep your ship on course.

Staying on the Positive Side of the Success–Failure Rate

Several different reputable organizations (including top-rated restaurant and hospitality schools at Cornell and Michigan State universities) recently conducted case studies to test the “common knowledge” that “90 percent of restaurants fail in the first year.” The data (which takes into account eating and drinking places, including bars) indicates that the first-year failure rate is somewhere between 25 and 30 percent. After ten years, around 70 percent have failed. So, success is far from guaranteed, but it’s certainly not impossible.

Failure and attrition are natural in this business, as they are in any industry. New businesses fail and others take their place. That’s the beauty and the harsh reality of the world.

Why do so many fail?

Ultimately, most bars fail because they aren’t run properly. Sure, we can think of many examples of bars that didn’t make it because they had a landlord dispute or some other unforeseen circumstance they couldn’t overcome, but most fail because of poor management.

The most common reasons for failure are

Irreconcilable differences among the owners. Set up your partnership agreements the right way using Chapter 3 as your guide.Initial underfunding of the bar. Check out Chapter 3 to avoid this problem.Overstocking inventory. Take a peek at Chapters 8 and 14 to head this problem off.Ignoring or mismanaging cash flow (and ebbs). Chapter 15 gives you tools to manage yours.Failing to pay appropriate taxes on time. Read Chapter 3 for tax information and get an accountant you trust.Skimming, stealing, or other illegal activity. Chapter 14 is required reading to help you keep what’s yours.Death by a thousand cuts. Some owners choose to cut corners in food quality, quantity, cleaning regimens, innovation, and so on over time. Over the course of, say, a year, the bar morphs into a mere shadow of its former self. Along the way, it alienates its clientele, who spread the bad news, leaving the bar without repeat business and with disappointed patrons.

Lucky you, you bought this book, so you’re more likely to make it into the success category already.

Figuring out why others succeed

Most successful bar owners succeed through sheer force of will, with a dash of common sense, and business savvy to match. They manage their bars as businesses, with procedures and systems. They watch the bottom line and actively train their employees to provide excellent service. They purchase their materials properly and price their menus accordingly. They keep their bars clean and their patrons happy. In short, they stay objective and balance their business goals with their mission to help people have fun.

Understanding the Financial Ramifications

We definitely don’t want to discourage you from getting into this exciting and rewarding industry. But for you to succeed, you need to have realistic expectations of the financial commitment and ramifications of running your own bar.

Definitely check out Chapter 3 for more details on getting funding for your business.

Preparing yourself for personal guarantees

Financing is tough for new bar owners. Leasing some equipment is possible (take a look at Chapter 7 for our tips on what to lease). Assuming someone like a bank agrees to give you money, you’ll probably have to personally guarantee to secure the loan.

A personal guarantee is a pledge that you personally (rather than your bar or the corporation that operates your bar) are responsible for the loan, even if the bar defaults on the loan. So, the bank may be loaning the money to the bar, but it expects to get its money from you if the bar goes out of business. (And the bank will want its money. Read the next section for more about what could happen if your bar goes belly up.)

This isn’t always