@virginity OP, I've run a successful bar before that made a lot of money. In light of all these negative responses I came here to say that opening bar isn't always a bad idea.
Experience is important, but not essential - like anything,
it can be outsourced. Everyone here seems to be presuming that you intend on being an owner operator, which is common in small bars that don't do so well, but very rarely in a highly profitable bar will it be the case.
If you don't have years and years of hospo experience, then you'll want to find yourself an amazing general manager to run the place. Ideally someone who has opened new bars before, as there's a bit of an art to it. Ideally you're still bringing something else to the table through - marketing/advertising skills perhaps. I saw the owners of my bar maybe once a week, if that. They were involved heavily in the start during set up, but not much after that. They just took their money each week, which seems like a great idea to me.
The next problem people love to tout is the
funds needed to start the bar. Yes, opening a new bar (in a new site, not taking over an old one) is expensive. But do you have to pay for all of it? No. Instead, you can form a strategic relationship with an alcohol supplier. Where I ran bars, there were two main companies that dominated the market. What they love to do is contract a bar into selling their booze exclusively, not the competitors. What they'll sometimes do for this is pay for a significant chunk (or all) of the bar's set up. In the biggest bar I ran, this would have been circa $500k. In return for this, you're obliged to stock their products over the competitors. If they don't supply something, you're free to source it from wherever you like. You'll then gradually pay them back over the next 5-10yrs, but it's interest free. They benefit by you purchasing your stock from them, and typically you'll get access to preferential pricing too. Win win.
The third main tip I have for you is around the
concept. The type of bar you'll want to open will depend heavily on your location in the world. Typically most cities lag behind the biggest cities in hospo (NY, Lon, Melbourne etc.) by a year or two. So if you're not in one of these major cities that lead trends, you can almost pick what will be big a year or two from now. So head off on a research trip. Visit somewhere that's ahead of the curve and get some inspiration for your bar.
Revenue sources and your target demographic are obviously very important. But what a lot of people fail to realise is that you don't have to pick just one. This most successful bar I managed was a real chameleon. By day, it was a corporate lunch/after work drinks spot. By night, we re arranged the tables and it turned into a nightclub and we had 18-25yr olds queuing 50metres out the door to get in. To take advantage of multiple demographics, location is key.
Profit. Rarely do people talk about numbers beyond revenue, but I'll give you a big more detail. Revenue used to vary from 80k-180k per week. For us it was quite seasonal. March-August was always quiet, and then the summer from Sep-Feb was busy. Remember what I said about appealing to multiple demographics? On a Friday (lots of suits for lunch and 5pm drinks) we could do $30k, and then on a Saturday, we'd do $25-35k mainly from the nightclub side. Overall our GP was 70% +/-. So on a $100k week, our COGS was $30k. Then you've got labour. A good general manager will have a pretty efficient roster worked out such that you don't have too many staff on in the quiet times. Depending on the service you're hoping to provide, in a bar you can run the labour cost sub 20%. Restaurants tend to be looking at 25% ish. We could do as low as 12% in a really good week, but 16% on avg.
So on our $100k revenue, we've paid $30k for the stock and $20k for the labour. Then you've got overheads- lease, cleaning, security (if applicable), maintenance, compliance etc. But you're still coming out very profitable. Even more so on a bigger week - we'd generally do $10k-$50k profit per week. It was pretty rare we had a negative week, but it did happen.
Hope this all helps OP. So just remember to outsource the experience, form strategic relationships with suppliers to pay for set up, choose an awesome concept (and just replicate it if need be), and think really carefully about you're target demographics.
Best of luck!
