Bar on a Budget, Part 2: What Kind of Owner are You?

Shoo Shoo, Baby bar interior
Shoo Shoo, Baby in Los Angeles. Not a budget bar but follow this series and you'll learn how to create something similar without going broke. Image: Invictus Hospitality

Welcome back! I hope you took your homework assignment seriously and answered the question I asked you in part one of this series. For those who may not remember or who have started the series with part two, the assignment was to answer a simple but important question:

Why do you want to open a bar? Your answer is just one piece to the puzzle of opening a bar or restaurant successfully.

Another piece of the puzzle is figuring out what kind of owner you’re going to be. The answer to this question can help you determine what role, beyond owner, you’ll likely play in your bar, along with the challenges you'll likely face.

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So, let’s look at 10 of the most common answers our friends at Invictus Hospitality have encountered to the homework question you were assigned in part one of this series:

  1. I’ve worked in the hospitality industry and I know the business.
  2. I’ve held a management position in a bar, nightclub or restaurant and I’m ready to be an owner.
  3. The place I’ve worked in for years, is finally for sale, and I want to own it.
  4. I’ve worked for others in the business, and I know I can do it better.
  5. I want to be the boss.
  6. I go to a lot of bars and restaurants, so I know how they work (plus, I want free food and drinks).
  7. I watch a lot of bar- and restaurant-related TV shows and I can definitely do better than those other losers.
  8. The bar I’ve been going to for years is for sale and the bar manager wants me to become his investment partner so we can own it together.
  9. I’ve succeeded in other types of business, and I think I can succeed in this business just as well.
  10. I want to be the cool person in town, and would love the attention of everyone knowing I own the place.

Understanding Answers 1 Through 4

If your answer to your homework question most closely matches the first four in the above list, you’re likely confident in the skills you’ve developed while working in the hospitality business. If you’re a people person, and had responsibilities which included inventory and ordering, schedule creation, marketing and promotion, or other management tasks, then you’ve got a solid base from which to build from as an operator. Even better if you’re experienced with P&Ls. There’s no reason, generally speaking, that you can’t own the bar and be the general manager or bar manager.

Understanding Answer 5

Ah, Number Five. Without any prior experience, you may encounter some serious problems.  With at least a bit of prior experience to build your ego, you probably envision yourself wearing owner, operator, general manager, bar manager and kitchen manager hats simultaneously.

Actually, why wear a hat when you can wear a crown? This project is going to become the jewel of your empire and you’re the king.  To create a successful venture however, you will need to take it down a notch, do some research, and be ready for a ride with twists and turns you did not see coming. 

If you’re a sole proprietor and consider your word in your bar the law, you may want to consider being final decisionmaker but hiring experienced and successful general, bar and kitchen managers. I’d also suggest working on your emotional intelligence. Doing so will help you turn your employees into a powerful, cohesive, money-generating unit.  There is more to the hospitality business than meets the eye, so try to keep an open mind, and seek out resources which will help answer the questions you do not know the answers to.

Understanding Answers 6 Through 9

That brings us to Number Six, Number Seven, Number Eight and Number Nine. While it certainly helps to have prior experience in this business, nothing says you can’t open a bar without it. Just know that you’ve got a tough road ahead of you. Like Number Five, you will definitely benefit from interviewing and hiring consultants to help along the way, and a solid management team and rock star servers, bartenders, security staff, etc., to keep the venue running as smoothly and efficiently as possible.

Since you don’t have the (sometimes traumatic) experience of working front or back of house, you don’t quite grasp what each of your employees is going through every shift. Sure, sometimes a fresh pair of eyes looking into a business from the outside is helpful. However, that doesn’t necessarily hold true when it comes to the bar and restaurant business.

Protect yourself by making the right management hires and learning from them as you go.  There are a lot of details which need to be tended to in the hospitality world, and many of them play off each other to create an overall experience.  A small shift or forgotten piece of the puzzle, can lead to mediocrity or recurring issues which never allow you to move onto the next level.

Understanding Answer 10

There’s nothing wrong, Number Ten, with wanting to be cool. It feels great to walk into someone else’s bar and overhear, “Hey, that’s the woman who owns that cool bar on Whatever Street,” or to run errands and catch people saying, “That’s the guy who opened that awesome new cocktail bar.”

But this may mean that you’re “just” the money. That isn’t intended to offend you, it’s meant to help. Just like in other businesses, money is the lifeblood that keeps dreams from dying. Your role is indisputably crucial, but it may be beneficial to you and the business if you don’t try to manage day-to-day tasks.

By all means, attend weekly management meetings, give your input for big decisions, and observe the operation to provide feedback. But understand that you’ll probably be happiest and most effective if you’re investing, collecting money, and being the business’ biggest and best promoter.

What’s Next?

With that sorted, the next part in this series will focus on identifying your resources. It’s one thing to know what kind of a venue you want to own and quite another to know how you’re going to bring that vision to life. For those of you have survived the first 6, 12, 18 or 24 months of operations, it’s a good idea for you to take stock of your resources as well.

In the next installment we’ll address the resources you have at your disposal. It takes more than money and/or investors to give a bar, nightclub or restaurant the best possible leg up when opening brand-new doors. As this Nightclub & Bar series progresses, more technical, higher-level topics will be addressed that will appeal to more established and veteran operators.