
Ask HN: Any bar owners? - devmonk
With all of the tech startup entrepreneurs, does anyone have experience in starting a bar? Any facts or figures you could provide about the cost to setup, info for getting licenses, etc.?
======
waterlesscloud
My parents bought an existing bar back in 1993, held it for 3 years and sold
it in 1996. I managed it for them while completing my CS degree.

Licensing is a complex topic that varies considerably by location. By state,
and then by county or municipality.

Overhead can be relatively low, depending on what you have in mind. You need
some basic infrastructure- ice machine, coolers, CO2 systems, etc. Insurance
is a bit different for a bar than other businesses, obviously, but not too
bad. Inventory is a low cost compared to your cash flow, as is labor since
pretty much everyone will be minimum wage plus tips. Maintenance isn't too
bad.

Basically a well-run bar is a license to print money. You sell drinks for
several multiples of your cost of goods.

Most bars I knew of that had trouble had it due to owners that didn't know
what they were doing, at all, in terms of business, or more commonly had a
drinking/substance problem.

~~~
garply
I own a retail business and I'm surprised you left out rent in your list of
overhead costs.

You can start in a crap location and gradually build up a loyal customer base.
That's cheap and can eventually be lucrative if you're really good at service
and marketing, but in many ways you're fighting against the tide - you're
inconvenient to your customers and easily forgotten.

A well-run bar in a good location will surely bring in good revenue, but the
rent will almost inevitably be expensive as well.

~~~
waterlesscloud
I did leave out rent. In our case it was a fairly big number, but we had a
fairly large, rambling building. But it was still small compared to our cash
flow.

I'd also say that bars are far, far less location-sensitive than retail. You
can get away with a bar being a little off the beaten path, and if you're
smart, you make that part of the appeal. That works well with a semi-vice
industry...

~~~
waterlesscloud
I do want to add this-

We tried to open a nightclub a couple years into owning the bar, and we failed
miserably. A nightclub is a whole different beast from a bar.

I think the three main reasons we failed were

1- We spent too little money on it. There are clubs, notably the really
underground dance clubs, that can get away with being a dark room with a good
sound/light system and nothing else. Pretty much any other kind fo club needs
to spend a fair amount on decor.

2- The space was too small. Related to the above. Again, maybe an underground
club gets away with small spaces, but most need a large space with lots of
nooks and crannies.

3- We had no clue how to market a nightclub. A bar needs to feel like it's
apart from the world, a sort of refuge in a way, but a club needs to have some
sort of aura in addition to that. That's a complicated thing to build up, and
we didn't know how and we didn't put in the effort to learn.

An opportunity came up near the end of the bar run to buy what had been one of
the mega-nightclubs in town in the 70s-80s. It had gone through several failed
iterations in the decade since, and was going for a relatively cheap price.
The deal never solidified, and in the end it's probably a good thing it
didn't. Someone could have revived the mystique, I think, but it couldn't have
been us.

~~~
elliottcarlson
A few things to note after having run a club night a while back:

1) We actually managed to go as cheap as possible with our venture. The scene
that we were targeting, Gothic/Industrial, is already a hard to come by group
of people compared to the larger genres out there, and we even had competition
on the same night; however without large decor changes, or even spending more
than $500 on opening night, we were able to make a decent enough of a profit.
I think marketing may be the key factor here.

2) The space we found was very small - in fact it was a hard to locate bar
that was looking for something to take over their Saturday nights. One of the
issues we had with the bar owner was decor, which in the end had to be left
untouched - thus our Goth/Industrial night took place in a Caribbean/Tiki
style bar.

3) In regards to marketing a nightclub - as previously mentioned by mschwar99,
social butterfly types are a great asset here. By getting promoters to hand
out flyers (stamped with their promotion id/name, and the promoters targeting
very obvious members of our target scene) you can get a good amount of patrons
in. By presenting the flyers, the customers will get free entrance, and the
actual promoters get a cut based on the amount of patrons they bring in. Your
promoters will work extra hard to get the word out as it's purely commission
based work at that point.

Sadly, in our case, the reasons we failed were mostly attributed to the NYC
smoking ban in bars, the incorrect cross streets being printed on our flyers,
as well as midterms taking up the time of our customers.

------
mschwar99
I helped run a large, high volume college bar for around 8 years and then
opened and operated my own venture (with partners) for a year or so.

Much of the details of your venture will depend entirely on its location.
Sticking to advice that will apply no matter where you are:

If you have to equip the place from scratch and need to do it on the cheap,
find restaurant auctions around your location. Restaurant and bar equipment
depreciates at a sickening rate, and they go out of business frequently. You
can save well over 70% off of catalog for six month old equipment.

Find a local insurance agent and get to know them very well. Don't ever, ever
skimp on liability insurance.

In my experience far and away most important aspect of operating a bar is the
staff that you employ. Obviously they need to be as trustworthy as possible -
employee theft is a constant. Much like fighting illegal downloads you will be
fighting to minimize it rather than abolishing it. The theft will rarely be in
the form of removing money from the register till, but rather in the form of
unpaid product.

The larger reason that your hires will be important though is because hiring
the right people is the most effective form of marketing that you can possibly
do. Hiring a staff of well connected, social butterfly waitresses, door guys,
and bartenders has an infinitely higher ROI than any print or radio marketing
that you can do.

Additionally, good employees are perhaps the most important differentiating
factor for your business. Unless you are a multi-million dollar Vegas-style
theme joint, your business is a commodity. There are already twenty other
businesses just like yours. Having employees that are both good at their jobs
and eager to establish relationships with your patrons will be key in
converting customers to repeat customers.

Could type all day, but the last thing that I would add is that as with any
new business you will struggle to gain traction. When marketing I always
tended to look at my job as one of disrupting traffic patterns. Potential
patrons already had their favorite bar and a list of five others on a short
list. My job was to get myself on that list, and in order to do that I would
have to offer an awfully compelling reason to get them to disrupt their
patterns.

I would usually use either a heavy loss leader (really cheap drinks) on a
typically low revenue night or high profile events (big name band / DJ, fight
night, etc). Once I had ac customer in the door and I provide a well executed
experience it becomes a numbers play much like PPC advertising in the web
world. 50% of the people that tried me out will be back someday, I made it on
to the short list of 10% of the new customers, 5% wind up being new regulars.

~~~
callmeed
Good info, thanks for sharing. I do have one question that stands out as a
paradox to me ...

You mention hiring well-connected, social butterfly types. Can't doing this
_increase_ your risk/amount of theft? In other words, if many of your patrons
are socially connected to your staff, aren't they more likely to expect/get
free drinks?

~~~
peteforde
I don't think social people are inherently nepotistic. In fact, I consider the
expectation of ongoing free _anything_ to be a primary characteristic of anti-
social individuals.

That said, if you identify one person that appears to be a social hub, giving
them free drinks might be good for business. YMMV!

------
jabrams
I co-own a nightclub in San Francisco called Slide (www.slidesf.com). I
wouldn't recommend you get into this business without experienced partners
(which is what I did). That's kind of like one of those people looking for a
"technical co-founder" because they have an idea for a consumer web site even
though they have no experience working at Internet companies. Between
construction and permitting, it took two years to get Slide open. Of course
you can open a neighborhood bar on a smaller budget, but there's still a lot
of things do deal with like liquor licenses, security, liability issues,
safety, staff management, etc. Like any business, success is hard, and is more
likely with domain experience. Good luck!

~~~
jcroberts
You take the time to post an URL to the site for your club, and I take the
time to look at it... --I find a useless and unreadable site at the given URL
that requires both javascript and Flash. We can probably just agree that I'm
simply not your customer, but did you even think about how many potential
customers you've turned away by failing to keep things simple and accessible?

~~~
roel_v
LOL do you honestly think this is going to make one bit of difference? Flash
sites are pretty much standard for all nightclubs, dance/rave parties and
related things, I'm quite sure that the audience prefers a shining moving
website over 'accessibility'. I'm also pretty sure 95% of the target audience
that even bothers to visit the site won't even know that it's a flash site,
and they surely aren't going to make the decision on whether or not to visit
the club based on whether or not the website is flash or 'plain' html.

~~~
jcroberts
You're not thinking it through completely. It is perfectly fine if I'm not his
target customer. Same is true for others like me; we're just not the intended
target customer.

On the other hand, a javascript/flash-only site can be problematic for search
engines, even those engines with the supposed capacity to parse
javascript/flash. Outside of the search engine issue is, of course, linking by
by human beings. How would you send a friend a link to a show, event, or
location page? --You can't.

It really doesn't matter if the target audience is expected to be ignorant or
indifferent to security concerns. You can still give them the "shining moving
website" with flash in addition to more accessible content. The important part
is accessibility improves usefulness and effectiveness.

The site exist to promote the club, but the current design states, "If you use
an iPhone, you're not welcome here." Can you honestly say the entire target
audience doesn't use iPhones? In essence, the design defeats the purpose. And
no, I do not own an iPhone, but that's beside the point.

~~~
roel_v
I still disagree. I think the dynamic amongst the target audience is different
(I may be wrong, I used to be the target audience 15 years ago but things have
probably changed radically since then, plus I'm on a different continent)

That said... I'm quite sure there isn't a lot of traffic to these pages
anyway. The question to ask is - am I going to lose customer by not being
available on an iPhone? People will already have decided if they're going to
come or not, they don't need the site to convince them. If their friends go or
if it has good buzz they will, otherwise they won't. The website is, I think,
just an item on a checklist - you have to have it but it doesn't really matter
if it's good (or googleable) or not.

For the rest, it's a cost/benefit thing I think. The people who design the
flyers (which _are_ an important promotion tool) can easily, quickly and
cheaply make a flash website from the flyer design. These things are one-off,
they rotate every week, requiring someone who does all the tech frills is
expensive and makes the turnaround time longer.

(PS no average iPhone user is going to think 'I'm not welcome here', they'll
just think 'hmm it doesn't work, let me try at home tonight').

~~~
jcroberts
I'll agree my "I'm not welcome here" statement was a bit too strongly worded.
None the less, you're "let me try at home tonight," statement is actually
quite important. --What if the person and their friends were already out on
the town looking for a(nother) place to go?

"Let me check what's going on at Slide... hmmm... it doesn't work. I'll check
$OTHERCLUB."

Expecting a potential customer to go find another device to access your
content/promotion defeats the purpose of building said promotion. Similar is
true for making the content/promotion difficult to find via a search engine.

The costs involved in the production of more accessible content are
negligible. In fact, it's faster and easier than creating flash content, and
you could automate most of it into a form based UI (image of flyer, title,
date, time, descriptive text).

I do see your point how club promotional sites might not get a lot a traffic
but keeping a promotional site accessible to mobile devices and easily found
through search really does makes sense. Advertisements that cannot be seen are
far less effective than advertisements that can be seen.

~~~
roel_v
I think we can argue this point until we're both blue in the face, but without
data or input from someone who actually knows this market we won't really get
anywhere; for example I find the example of people googling for places to go
out while they're in another place highly hypothetical. As I see it (this is
not a personal attack, although I see how it can easily be construed as one -
I mean this as a 'meta-cognitive inference of the origins of your position in
light of your previous statements and general demographic of this site', so
feel free to correct me if you feel I'm mis-characterizing you), you are
looking at this from a technology-warped lens, placing too much emphasis on an
aspect close to you (i.e., websites). Again I don't have data, but I'm quite
convinced that the amount of people who are out on a friday night and
google'ing for a place to go is very, very small; so small as to put the
accessibility and SEO-iness of the event's website pretty much at the bottom
of priorities for a promotor / club owner.

Then again I've just been reading the 'intellectual hipsters' article also on
the front page
([http://lesswrong.com/lw/2pv/intellectual_hipsters_and_metaco...](http://lesswrong.com/lw/2pv/intellectual_hipsters_and_metacontrarianism/))
so maybe I'm just an idiot trying to argue a contrarian position from made-up
assumptions on smartphone use amongst the club-going demographic :)

~~~
jcroberts

      > you are looking at this from a technology-warped lens, placing too much emphasis on an aspect close to you (i.e., websites). 
    

Actually, I'd tend to agree with you but the specific aspect would be
"accessibility" rather than websites in general. Since I was disappointed in
not being able to see the content on the slidesf.com site, I'm certainly
guilty of at least some degree of emotional response.

    
    
      > Again I don't have data, but I'm quite convinced that the amount of people who are out on a friday night and google'ing for a place to go is very, very small; so small as to put the accessibility and SEO-iness of the event's website pretty much at the bottom of priorities for a promotor / club owner.
    

I doubt it's intentional, but you mixed the wrong bits, and then argued
against them (straw man). The SEO of a site is relevant at all times and on
all devices. The (mobile) accessibility is a more specific use case, where the
looking-while-out-on-the-town would be an example.

Without data, we're probably wasting time discussing it, but I don't think
you're an idiot/hipster for arguing the other side. In fact, I appreciate your
comments. If you look at the down-votes I've gotten, they pretty much prove if
one of us is an idiot for arguing an "unpopular" point of view, it would be
me. Until I saw the down-votes myself, I never dreamed keeping things
accessible, particularly advertising promotions, would be such an unpopular
view.

~~~
roel_v
I was indeed sloppy and did mix various aspects, and argued ad hoc against the
examples given; alas that's the fate of quick discussions such as this one
where the wording of arguments is not double-checked :) I think overall though
that we both understand each others underlying positions well. Generalized, my
point is that the business case for these less-tangible aspects of website
development is hard to make. I'm sure you agree with the overall sentiment
that these aspects are only worth doing for a business when there's an
expected positive ROI, so now all we can do is argue over at which point that
break even point lies. So at least we can agree that it's not very productive
to further try convincing one another :)

~~~
jcroberts
Yes, convincing each other is pointless. ;)

At the same time, I'm still curious what could be learned from the data? What
are the real usage/access patters of mobile devices on such sites? --Mostly
due to always wanting to know more about how most people use mobiles. I think
it would be fun to analyze the data just to see what I could learn from it.

Since I'll probably never get access to the log data, I'll be left wondering.
Oh well. I guess I'll have to find some other curiosity to occupy my time, but
luckily I have a lot of them.

------
esun
I own a bar, and am using it to fund a new business. It's a great business, if
you can get into a popular spot.

Only caveat: it takes a lot of discipline to manage large amounts of cash. If
you have a problem with drugs or prostitutes, you will fail. It's not your
cash... it's next week's payroll, liquor order, rent, etc.

~~~
olalonde
Out of curiosity, what was your initial capital investment?

~~~
esun
I put up $15,000 of my own money, and took on about $250,000 in debt.

------
jrockway
jwz does: <http://www.dnalounge.com/backstage/permits-index.html>

I think if you peruse his site a bit, there are lots of rants about how
difficult it was for him to get this started.

~~~
ax0n
Further, as a nerd who lives in flyover country but has at least made the
mandatory pilgrimage to San Francisco, I think jwz offers some (admittedly
jaded) insight into the culture of SF as a whole. The dnalounge blog and his
own LJ feed are practically required reading for those of us who wish to hear
what goes on beyond the silicon valley echo chamber.

~~~
wallflower
Best jwz story:

<http://jwz.livejournal.com/94645.html>

~~~
statictype
My degree is in Engineering and I'm still constantly amazed at the amount of
sophistication that goes into all the things we take for granted. Scaling web
apps to x-million users? Ha, that's nothing compared to what other people do
every day.

~~~
gaius
And yet, the web app scaling guys are making 2-3x those people in salary
alone.

~~~
wallflower
At least the SWAT team level engineers (World's Toughest Fixes) are getting
paid a lot (and may get a pension).

Part of me thinks web stuff is so hyped because it sells magazines

------
trop
From talking with a "bar designer": Every bar should have a choke point, that
is a place where customers have to squeeze past many other customers. This
isn't an annoyance, but an essential part of the experience.

~~~
johnthedebs
That's really interesting. What's the reasoning behind it?

~~~
trop
I think brc nailed it... (Sorry to be slow on catching up on thread.)

------
itg
I highly recommend working as a bartender for a bit before thinking about
owning one.

~~~
esun
Owning a bar and being a bartender are two different things. Bartending is a
service industry job, while owning a bar is about managing people.

~~~
olalonde
The point of being a bartender is to get a small glimpse at the inner-workings
of a bar.

~~~
smackfu
And to be able to tell when the bartender is stealing from you.

~~~
esun
It's so easy and tempting for a bartender to steal that sometimes I catch
myself stealing from myself.

------
danbmil99
From a good friend who ran a very trendy bar in NYC several years back,
regarding his employees: "If you think they're stealing from you, they're
stealing more than you think."

------
jonah
JWZ:

<http://www.dnalounge.com/>

<http://jwz.livejournal.com/profile>

edit:

1) dupe.

2) @netik is involved with DNA lounge too.

------
phishphood
Licensing is usually state, county and sometime city specific. You will need
to check with your local city hall.

Usually the distribution of licenses is per capita, i.e. for so many people
you can have xx licenses. In Boston you can't get a license unless you legally
purchase it on a secondary market or have relatives in the town hall or are
prepared to bribe your way through (see Diane Wilkerson case)

In Florida, where I operated a restaurant for a bunch of years, it is much
easier to get a license if you have a kitchen and do certain percentage of
revenues in food sales; the total time to get one from scratch I think was 3
month or so and the total cost was few hundred dollars.

Your biggest problems are employee theft and liability issues. Theft usually
comes in 3 forms, theft of product, theft of time and outright theft of money.
Liability is usually silly lawsuits, I had a cook who fried his elbow in a
deep fryer while high, I had slip and falls, I had broken teeth, fights,
orgies in a bathroom, etc.

If you could - get an experience person and partner with him for first few
years, you will be thankful that you did.

------
ryduh
What state are you in? My grandmother's boyfriend is in the process of selling
his bar in CA and I bet I could ask him some questions for you.

~~~
devmonk
Thanks! Post back CA-specific bar info if you have any. I'm not in the market
to buy up his bar or equipment yet, though.

------
patrickgzill
If you don't have prior experience you need to find someone who does to help
you run it.

Licenses vary greatly from state to state. There are a myriad of details to
master.

~~~
eli
Just to amplify, the climate and expense of getting licensed is going to vary
by _orders of magnitude_ depending on the location.

Here in DC the actual license is a few grand (by the books), but I heard it
could cost up to $100k when you factor in all the lawyers you'll need to
actually get it approved.

------
mattmichielsen
I'm doing some early research into starting a brewery or brewpub in a small
town in Michigan. I'm hoping to bootstrap as much as possible, but I'm pretty
sure I'm going to be taking on at least some kind of loan. Licenses in this
area aren't bad. Visit your local City Hall and give your state's Liquor
Control Commission (or equivalent) a call.

------
spoiledtechie
I have always been interested in owning a bar as well. Almost did if it wasn't
for getting a much better job to come along. Where you thinking about,
interested in an investor, what are you actually going to do with this
information?

------
amh
You might find JWZ's experiences interesting:
<http://www.dnalounge.com/backstage/>

Then again, it might scare you off. Maybe it's just that CA is particularly
bad, I dunno.

~~~
krakensden
The DNA Lounge is also a nightclub, which is by all accounts a more difficult
industry to be in.

------
d0m
Problem with bar is dealing half with the cops and half with customers that
don`t want to pay you back.

~~~
mahmud
What do you mean pay you back? if you're lending people alcohol, you're doing
it wrong.

