My mother-in-law owns a bed & breakfast. Taking care of people (after four children of her own) is her default. Some of us are just born to enjoy people — and meet new ones every day.
If you’re similarly inclined, owning a bar might be your calling. And, in this economy, that may be a very good move.
The San Francisco Examiner reports that “bars and booze are one of the few sectors in this harrowing economy to see a spike.” A good stiff drink can be the antidote to the pink slip.
So. Are you bar-owner material?
• Do you like the dark? There aren’t a lot of windows in drinking establishments, so you can’t be afraid of your own shadow and you’ll need to stock up on Vitamin D. Sunlight will be scarce.
• Can you sleep during the day? Assuming you operate the bar yourself, your hours aren’t exactly traditional. Weird things happen at 2AM, so you need to be cool with that.
• Can you say “no”? Overserved individuals can be unruly. It’s your job to step in and tell them when enough is enough.
• Do you know a lawyer? Serving alcohol comes with many rules, which vary from state to state. You may need to serve food, for example, in order to get a liquor license. The rules might also change if the establishment has a patio.
• Good with the books? Income verification is terribly important in a mostly cash business like a bar.
If you are buying a bar from another proprietor, due diligence is of utmost importance:
• Do a “book check,” where a CPA or bookkeeper with experience in conducting financial due diligence verifies the financial statements against receipts, bank statements, general ledger, etc.
• Investigate the business assets, liabilities, contracts, employee records and history, organization structure, employee responsibilities, regulatory history, customer and vendor relations, and computer systems.
From what we learn on BizBen.com, many deals fall apart during due diligence because the buyer discovers something was misrepresented or omitted from materials prepared by the seller.
As such, “a healthy level of suspicion is entirely appropriate,” as is hiring professionals to help you find the right bar.
Sold On The Idea?
To turn a profit fast, keep happy hours long and bar snacks salty. Also, lowering the price of drinks will yield more sales, more repeat customers, and — bingo — more moola.