How to open a successful cocktail bar

10th February, 2015 by admin
Boilermaker Nottingham cocktail;

Boilermaker in Nottingham ran into unforeseen costs even before opening

Residency over ownership

Christian Tirel, of Boilermaker in Nottingham, has a fine example: “The floor in our courtyard ended up costing a deceptively large amount totalling nearly 15% of our overall cost. It’s these outlays that make the difference between the premium furniture and the sexy shakers or the items at the bottom of the bargain bin.”

These high costs are not isolated to London, as Antonio Lai of Hong Kong’s Quinary finds. “The rent is really too high in Hong Kong and the setup even more expensive,” he notes.

The rising cost of opening a bar along with the instability and risk has seen a few bartenders opting for a residency over ownership, much in the same way as renowned chefs. This will naturally alleviate most of the initial outgoings but it will also omit any potential goodwill value that may be attached to a resale. There are of course ways to generate funds and set the ball rolling.

Investors often crop up in conversation but they will require a solid trading history from an established company before taking a risk themselves. Similarly, the banks may well match the amount the owner is willing to put in but this can still leave a huge deficit. Even in this scenario the purchaser may still need to find around £70,000 and a watertight business plan to satisfy their criteria.

A route that is often taken for the fortunate few is that of using family finance, something that is risky both to the individual and their families. Almost all leases and loans will require a personal guarantee, meaning that in the instance that the premise fails, the purchaser or guarantor has to find the rent out of their own pocket until the premise is sold.

Consultancy as a means to an end

An alternative way to generate funds would be to use the skills acquired as a top bartender, by offering out their creativity as a consultant. Consultancy requires very few overheads, the main requirements being knowledge, time and a good reputation.

Fluid Movement, operator of Worship Street Whistling Shop, decided to reinvest consultancy profits into a bar enabling the company to grow, firstly as a showcase for what they could offer the consultancy clients, and secondly, and more importantly, as a way of generating a steady revenue stream. This in turn created a showcase that drives more consultancy and so the cycle continues.

In embarking on this uncertain path, one must first make sure it is what one wants. “Lots of people say they want their own bar, but it’s certainly not for everyone,” adds Chetiyawardana. “The stability of a job is a great thing and shouldn’t be overlooked”.

Once a bar is established and begins to make a profit, the hard work really sets in. New bars open every day and each one aims to take away business from its competitors. It is at this time that constant day-to-day management of all variable costs is essential. There are a variety of key areas to any successful bar, something that Antonio Lai confirms: “Make sure you find the right staff, location and idea. It is easy to open a bar but never easy to keep a bar up and running”.

Business development is key and there’s no such thing as a day off. However, the sense of pride seeing a dream come to fruition is worth every second of that hard work.

2 Responses to “How to open a successful cocktail bar”

  1. Interesting! My friend is planning to put up one since we were in high school. I will definitely handing this article to him.

  2. Martin Fort says:

    There are some good points! But let me summarize it and add some more things that I believe are essential for opening a successful bar…

    1. Market Research (including location, competitors, beverage preferences, income)
    2. Define your goals and business strategy (bar concept, branding and marketing message)
    3. Design cost-effective cocktail & beverage program based on your target market.
    3. Start small and adapt (pay attention to feedback from your customers)
    4. Use different marketing strategies to promote your bar (word of mouth, online advertising, email marketing, bar promotions, blog)
    5. Keep track of all results (efficient bar inventory management, business goals, marketing strategies)

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