Bar Ownership?

I dig that bar with pinball and old arcade cabinets. Hipster or not I'd totally go drink there, fuck yeah.

pysek_sl said:

I had an idea for a bar. Sports bars take advantage of the passions of sports fans and seem to reap a decent return. I wanted to do the same thing for nerds. I think a bar with a nerd theme, accepting of varied interests, could be pretty successful, given the right circumstances. There's an artsy section of town here I think would be perfect. This came from a conversation I had with a friend a couple of years ago. We debated where we would go for the evening and none of the usual bar fare sounded good. We groused about a place where people like us, who share similar passions for books, movies, games and general nerdery could go and be not only accepted, but could meet, game and drink with new people who shared those interests.

The idea is a neighborhood bar, not spending a lot of capital on renovations, but that would be decorated with all sorts of nerdy paraphernalia. Trek and Wars ship models, busts from LOTR, that sort of thing. TV's on the wall play movies (Iron Man, Trek movies, and the like). There would be a karaoke room, a game room with an xbox or playstation where you can rent time to play games while drinking (I'm not sure about copyrights and trademarks, so the idea would be you rent the ROOM and the games come with it), cosplay contests, tabletop gaming, sit at a table with a stranger (basically, if you choose, you sit at a table with a group of strangers, so you meet new people who hopefully share your interests). Given the right location, I think this could become a reasonably successful enterprise. There are no bars of this type anywhere in town and so there might be some interest based on that alone.

The issue is, I'm brand new to business ownership. I do have an MBA and my wife is quite knowledgeable about bars in general, but neither of us have any specific knowledge of how to get this going. I'm at the very beginning stages, but my initial research indicates that capital might be hard to raise as banks and federal lending institutions are loathe to invest in vice, especially when so many fail early on.
I guess what I'm hoping is that any of you guys who have undertaken similar enterprises would enlighten me as to some of the pitfalls and unexpected things that might arise, plus telling your story as to how you got your business off the ground. Thank you for reading.

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I owned a fairly upscale Steak House and bar on the lake here for a few years. I ended up losing about 150k after it was all said and done. It was a great experience that i wouldnt trade for anything, but its still tough thinking about the cash... We had a very good plan, an established name with a 30 year history and very favorable financing and still ran out of capital after our second winter. It is a tough business, and there is a reason almost every restaurant is a chain now. (or financed by someone using it as a way to lower thier taxable income.) Margins are so razor thin that a few bad weeks can sink you.

First step is to find a possible location. Location is everything.
Next you need to get in touch with your state alchohol enforcement agency and find requirements on liqour licenses. The OK ABLE commision is the absolute devil.
Read up on your state and federal restaurant associations. They have good resources.
Make sure you can bartend and cook. Im not a chef, and because of my particular restaurant i had to hire a pretty decent chef that cost me way too much money. You need to be able to do every job in the building before the doors open.
Your minimum wage staff ends up costing you close to 15 bucks an hour after ss/medicare/taxes
Whatever you estimate startup costs to be, tripple them.
Be ready to work 16-20 hour days every single day for the first year.
Dont sexor your staff. (i say this and i married my bartender....)

Feel free to ask any question, i will help as much as i can.

Doug is great, he really helped us a lot starting out.

Been trying to think of a few things that helped get us started...

Restaurants and bars generally operate off of a 30/30/30/10 model. 30% Fixed costs, 30% labor, 30% inventory (food/booze) and 10% profit.

You have to buy your booze from a distributor, and you will generally pay more than you would at a liquor store. And you have about a 17-22% tax rate on it.

Restaurant/Bar employees are horrible for the most part, unreliable and will rob you blind given the chance. Get used to being a babysitter and dealing with high schoolesque drama

Taxes suck, but pay them in full every month.

If you have any alcohol or drug problems, be careful. Its very easy to fall into the lifestyle, up till 5am every night etc etc. I was drunk on pretty much a daily basis.

Thorne_sl said:

You have to buy your booze from a distributor, and you will generally pay more than you would at a liquor store. And you have about a 17-22% tax rate on it.

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Damn, is that the case everywhere or does it vary wildly from state to state depending on laws and ordinances? Only reason I ask is that we have a family friend who owns a steakhouse that is in a resort town/small town, and he always talks about almost all of his profit coming from liquor sales, claims he gets bottles of top-shelf liquor for like $5-$10 per fifth, which is ridiculously cheap compared to store prices. I've always wondered if he's just BSing, or if he has some unusual connection because of the small community he lives in, or if that's actually the norm for restaurants. Going on the assumption that it is the norm, I always feel like a chump paying $5+ for a mixed drink under the assumption that the whole bottle of liquor costs that much.

Look up ground control in Portland, OR for another idea of a "nerd" bar, they cater to hipster crowds but I know they do well because it's packed all the time. As others have said though, it's a real risky gamble.

Yes, liquor laws vary a lot state-to-state.

Yeah, and my state is second to only Utah in stupid booze laws...

There's a chain of bars called Meltdown, which recently opened a branch in London.

The BBC done a short article on it:

http://www.bbc.co.uk/news/magazine-23047460

Haha what kind of dumb azz shiiit is this... Nobody go to the bar to play video games they go to find some pussy... And you bet your ass there no pussy at the video game bar lmao...

So here's what I don't understand after reading the thread over again. Why a Bar? Why a nerd bar? etc. You're picking a location etc and you've never worked in a bar. Why not become a bartender and then work at a bar for a couple years, then decide if you want to own/buy a bar. If you're good, which you better be to own a bar, you should make insane amounts of money from tips. As you're working you can watch other bars go out of business etc and swoop in and buy equipment. Talk to the owners on what sunk them etc.

After collecting equipment and experiences, then go out on your own. In my industry I watch people come and go, and I've only been on my own for 6 months. I watch the newbies come in and buy from the wrong people. You'd think, oh I'll just grab a wholesaler and get stuff cheap and resell higher. The problem is the price between wholesalers can vary by 50%.

On top of that realize that just because you get stuff cheaper wholesale doesn't mean you'll enjoy the experience. Like lets say you're going to carry Coke or Pepsi at the bar. You by contract can only carry one of them. Also by contract you're not allowed to go buy soda at the store even it's cheaper than something you carry on the shelf. So lets say Red bull is $1 on sale each and you're paying $1.50 each wholesale. They can drop you if you find you doing that.

On top of the other 50 important things to figure out before you open. How do you market to your customers? I market to aquarium people. 1 in 10 people own an aquarium. I have to mass market as my demographics are huge and not very targeted. Maybe pair up with a local game shop, figure out of there is a nerd club at the colleges etc.

You'll be shocked that you can have the best price on every drink, the best experience in town, with the hottest bartenders , and yet still people don't know about you. Also look at proximity, I never realized that most of the public is so fickle. If you are 5 minutes further away than a bar closer to them. You can almost guarantee you'll never see that customer. It blows my mind how such small distances are so huge for people.

There are probably studies and books written just on picking a location for bars. But there's a bunch of general things too. Like you don't want your business next to a bank. Banks are boring and people tend to walk by them without looking etc.

For my industry, I need idle time near by to excel. I also need to be next to a restaurant that gets great reviews. If you're stuck waiting for your brakes to be done, you might wander through an aquarium store. Once you're my customer if you fall in love with the pizza place next door, you associate your craving for that great pizza with a trip to my store also.

You might want to find the most successful game store in town and open close to that in the smallest space you can. Just start playing games there and when that shop closes, you head back to your bar etc. You could also become the food source for the local game store. If you share a parking lot, your girl waitress can bring over food etc. Then back to your place they go.

My last word of advise, keep 1 of you two completely out of the business. You or your wife, not related in any way to the business. If things start to go bad, it'll be horrible between you two. Also say the wife has a nice job, when things are bad at the bar, your home life wont be totally crumbling only partially. Also realize that you'll want health insurance, any other non self employed job will be MUCH cheaper than buying it with your own business.

Buy a cheap fridge , set up some tables in the basement have an after hours club. Friend sold PBR's for 1.00 a pop every night from 12 too 4 am in his basement. Hard drinking kitchen staff from places we worked or moonlighted at were steady customers. Laugh away he bought a nice old mcmansion cash in portsmouth NH on the water , from his drinking friends . )