Starting a Bar or Nightclub | How-to Guides for running your business from Business.com

Think of your favorite bar. What comes to mind? Probably delicious drinks, a comfortable atmosphere, good music, friendly people. That's because bars are fun places. People love them. They go to bars to celebrate birthdays, decompress after work and relax while they watch the big game. It's no surprise, then, that if you like going to bars you might also decide that you'd enjoy owning one.

Running a bar, however, is no easy task. It may look like fun from your barstool, but on the other side of the counter awaits a whirlwind of hard work and risk-taking. This isn't "Cheers," after all, and you aren't Sam Malone.

If you stick with it, though, a bar can be an incredibly rewarding—and profitable—business. People need entertainment, and they're more than willing to pay for it. Still, before you toast your new venture, ask yourself these questions in order to determine if the bar or nightclub business is right for you:

1. Do you like people?
2. Are you willing to work nights and weekends?
3. Can you handle your liquor responsibly?
4. Do you mind babysitting adults?
5. Are you prepared to navigate local liquor laws?

Action Steps
The best contacts and resources to help you get it done

Get to know the bar business

Before you get involved in the industry, be sure you know what you’re getting into and what it takes to succeed.

I recommend: If you’re looking for background on the bar and club industry, trade associations are a great place to start. Study up on the business with The Distilled Spirits Council of the United States, the National Bar & Restaurant Management Association and the American Beverage Licensees. Still have questions? Look for answers at Nightclubbiz.com.

Develop your bar or club concept

One of the most important decisions you’ll make is what kind of bar you’ll open. Decide whether you want a small neighborhood bar; a sports bar that serves up food and television; a brewpub where you brew your own beer; a specialty bar that has a signature offering, such as martinis, wine or cigars; or a club at which music—live or recorded—is a key feature.

I recommend: Flesh out your bar concept in your business plan. You can download a free sample business plan for nightclubs and bars from SVC Nightclub and Bar Services Inc. You can also purchase sample plans and templates from Teneric Business Plans, QuickPlan or Business Plan Database.

Find the start-up capital you need

Bars are expensive ventures. Start-up costs will vary by bar type, size, location and clientele, but be sure to consider the cost of rent, facility improvements, equipment and fixtures, licenses and permits, inventory, utilities, payroll, marketing, legal and accounting services, and insurance when you’re building your start-up budget.

I recommend: You can save significant money by purchasing an existing bar from another business owner. Browse bars for sale at BusinessesforSale.com, BizBuySell and BusinessBroker.net.

Scout for the perfect bar or nightclub location

For bars, location is critical. Leasing space in a trendy neighborhood may prove expensive, but often results in high traffic. Opening a bar in a less traveled area, on the other hand, might save you rent money, but might require more marketing funds.

I recommend: Because having the perfect location is useless if you can’t open for business, make sure you’ve obtained all the licenses and permits you need to get up and running. Companies such as Compliance Service of America and the American Liquor License Exchange can help you navigate local, state and federal regulations. Visit the National Conference of State Liquor Administrators for a link to your state liquor authority.

Stock your bar or nightclub

Inventory is key. Stay on top of the latest bar trends in order to keep your menu current and your customers happy.

I recommend: Find all the equipment and supplies you need to open your bar—used and new—by consulting Business.com’s directory of bar supplies. You’ll need furniture, barware and appliances. When it comes to liquor, focus on building strong relationships with local wholesalers and suppliers; consult the Wine & Spirits Wholesalers of America’s Membership Roster and Industry Directory to find a supplier in your area.

Build a strong team of bar or nightclub employees

You can’t run a bar or nightclub by yourself. You’ll need a talented team that might include a bartender, wait staff, a DJ, a doorman and a manager.

I recommend: Crucial members of your team are an accountant who specializes in restaurants and bars and a lawyer who is familiar with liquor laws and licensing. Find the former by searching a directory of accountants courtesy of the National Association of Small Business Accountants. Find the latter by consulting the National Association of Alcoholic Beverage Licensing Attorneys.

Promote the heck out of your new bar or nightclub

To market your bar, pursue all the usual vehicles, including print advertising, phone directory listings and a dynamic Web site. Consider reserving a substantial portion of your marketing budget, however, for unique promotions that will drive traffic, such as special entertainment, contests and giveaways.

I recommend: Read up on industry trends and find promotional inspiration when you subscribe to trade magazines such as Bartender Magazine, Nightclub & Bar Magazine and Wine Business Monthly.

Tips & Tactics
Helpful advice for making the most of this Guide

A bar isn’t a party; it’s a business. Treat it that way in order to succeed.
Name your bar or nightclub carefully. A good name will tell potential customers something about your establishment—where it’s located, for instance, what it serves or even whether it’s laid back or full of energy.
Free and discounted drinks can be great marketing. Be conservative, though; you can't afford to pay for drinks that your customers aren't buying.
Pay attention to the music you play, the furniture you use, the lighting you install and the beers you put on tap; all contribute to the experience you’re selling.
When you own a bar, you’re competing with scores of other bars in your area, not to mention restaurants and liquor stores. Pay attention to what others are doing; your liquor sales representatives are a good source of information, as they probably call on other bars in your area.
Successful bars and nightclubs know who their customers are and what their customers want well before they open. Find out to whom you can best cater by researching local demographics as well as current alcohol and lifestyle trends.

The official source of Starting a Bar or Nightclub is the Bar Supplies page at Business.com

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