Business Overview

Bars make for a good business idea in part because they are a staple of just about every community. Obviously, bars primarily focus on serving alcohol, but the rise of America's fascination with “pub grub” means there may be an opportunity to provide delicious food to patrons as well. Finally, bars provide an opportunity to show off your creativity by creating a unique theme and atmosphere that helps your business stand out from the rest.

Who is this business right for?

This business is a good fit for entrepreneurs who are passionate about their work. Those who love interacting with people will thrive on a business that revolves around customer interaction, and those who are good at networking will be able to more quickly jump-start their businesses. Finally, those with previous management experience will have an easier time with the day-to-day activities of a bar owner.

What happens during a typical day at a bar?

Running a bar entails many different duties, though their exact order will vary from day to day. The job often involves navigating a net of legal requirements related to selling alcohol, as well as local ordinances which may impact your business.

Staff management and training is also very important, as your staff represents the face of your business, and your entire reputation stems from the quality of the customer service you provide.

Another major duty is stock control, as this helps to ensure you are not overstocking or understocking, both of which can negatively impact your profits. Determining new drinks to stock and developing custom cocktails for your business should also be part of this process.

Finally, you will need to interview and hire additional personnel as needed. When your business is just starting out, you will likely be the primary person responsible for all of the cleaning and light maintenance work of your bar. Though, you shouldn't hesitate to call in professionals for costly equipment breakdowns and anything that could affect the health of your patrons.

What is the target market?

For bar owners, the best customers are the ones who are not disruptive. Because the basic nature of a bar is to provide an environment for intoxication, owners and staff must always be vigilant for angry, disruptive, and even violent customers. The best customers tend to be those who are just casual drinkers looking to have a good time with friends. Such customers know their limits when it comes to alcohol, and they contribute to the ambiance of community engagement and fun that you are trying to generate for your business.

How does a bar make money?

The primary way that bars make money is just as simple as you'd think: selling alcoholic beverages to customers. While bars typically also offer snacks and occasional entrees, serving alcohol remains the cornerstone of how a bar generates profit. This is because you can earn 200-400% profit off of every drink that you serve, with the average price of drinks being $8. This means that once you have a steady stream of traffic, the bar can begin generating profit much sooner than other types of new businesses.

What is the growth potential for a bar?

The growth potential for a bar is tied rather directly to the economy. For instance, the industry experienced modest but steady gains as the economy recovered from the recession of 2008, after the year 2009 saw a decrease of over 9% to overall industry revenue. Since then though, the industry has often grown by over 3% each year.

Another factor impacting revenue is an increasing cultural effort to eat (and drink) more healthily. This is one of many reasons that it is important to create a niche environment with a specific ambiance designed to attract specific demographics. People are less likely to drink for the sake of drinking, but like the idea of supporting local business while also socializing with those around them, and a local bar scratches both of those itches.