How to Make It in the Bar Business

Running a bar might not be an easy feat, but Jon Taffer knows the key to success.

Every man dreams – at some point – of opening his own bar. Your tunes on the hi-fi, an endless supply of booze, and buddies lined up for last call; it all sounds pretty damn good. If it was like that, everyone would do it. If it was like that, dives would outnumber Starbucks ten to one. But it isn’t like that and Jon Taffer knows it.

Taffer, who has spent the last four years setting unruly bar owners straight on Spike TV’s Bar Rescue, has been in the hospitality business for over 30 years. His authoritative demeanor, coupled with his experience, makes him a comforting guy to have on the stool next to you. In an attempt to capitalize on that appeal, he’s released BarHQ, an app that puts promotion, marketing, and organization tools right at bar owners’ fingertips. Basically, everyone can now get rescued. It makes owning a bar appealing all over again.

Photo: Spike TV

Here are the five things Taffer wants would-be bar owners to know before they get into his biz.

Customers Want a Bar Built for Them

“Please your audience. Don’t open a bar for yourself, or that’s where you will fail. You must build a bar for the marketplace. The price point and the product mix has to be right for the market. If the medium age is 24-30, you’re going to sell very different products. So build a bar for the market and focus on your location. If nobody sees you, they won’t come to your bar. To open a bar effectively is going to cost you about $135-$175 per square foot to build. You can’t build a beautiful bar and not have money for the outside. By the time you put in kitchen equipment, bar equipment, tables, chairs, wallpaper, and all that, you’re going to have to spend around $150,000. It’s not cheap, so be smart.”

Bartenders Aren’t There to Serve Drinks

“Working as a bartender isn’t exactly rocket science and you should be hiring people who have great personalities. If it’s a sports bar, hire a sports fan or you’re an idiot. I think every human resource book is wrong. There’s two things in life: teaching and training. We say as an industry, ‘I’m going to train you,’ but that’s bullshit. If you don’t smile when you talk to me, I can’t make you do that. If you walk with no energy, I can’t change that. That’s behavior modification. We don’t train anyone; all we do is teach people so we better have the right personalities when we start or it’s all going to fall apart.”

Serving Food Is a Pain in the Ass

“Income all depends on the venue. A cover charge at the door adds a lot. That aside, service from the bar is about twice as profitable than food for two reasons. One, food cost is higher. Two, it takes more bodies to make food than it does a drink. It takes more energy to make food also, with kitchen equipment, and gas. Food is a lot less profitable than beverages are.”

Liquor Doesn’t Drink Itself

“You must take inventory. If I start the night with 100 ounces of vodka and finish with 80 ounces, I know I’m out 20 ounces from the night. If the cash register shows I sold 18 vodka drinks at an ounce each, two ounces are missing. Did somebody give up two drinks or over pour? Or did they pour vodka when it should’ve been gin and have to start again? It doesn’t matter to me because it costs me money either way. You have to count the number of ounces you sell, almost every day, every week, to protect your money.”

The First Night Is Just the First Night

“Revenue solves everything in any business situation. Bars blow up when they open, particularly rookie openers. They’ll open their bars and since they’re new, they will have a honeymoon and it will be really busy. They don’t manage their beverage costs, which has to be 21%. Let’s say it’s 30% and they lose 9% of profit. They can’t manage their food cost, and then they have too many people omn the floor and can’t manage their schedules either. If you eat up 10% of profit from product and labor management, that’s 20%. Bars only profit about 12-15%, so those two mistakes will force them to close. People say all the time that their bar was packed, what happened? Those two things, product cost and labor costs. If they manage them, and the bar is full, they will survive.”

Like what you read? Follow Sean (@seanybrams) on Twitter and Instagram

Photos by Getty Images