From Irish pubs to pool dives to sports bars and cocktail lounges, the bar industry is as vast and diverse as the millions of consumers it serves. However, all bars have two things in common: They all serve alcoholic beverages, and perhaps more importantly, they provide a setting for people to meet and socialize. The social rewards of owning a bar are attractive, but potential investors should make no mistake: Running a successful bar business requires more than a gregarious personality.
NuWire picked the brains of two bar owners: one, the owner of a neighborhood pub that had been previously owned, and the other, owner of a chic lounge and gallery built from scratch. Both owners have had to overcome significant challenges in getting established and both take satisfaction in owning their own businesses.
Both owners also tend to sleep much less than the average person.
The art of a bar business makeover
Kate, who preferred not to disclose her last name, owns Kate’s Pub in the laid-back Seattle neighborhood of Wallingford. The bar is a cozy hangout with classic pub décor, comfortable seating, a projector screen showing sports games and pool tables. The pub’s menu offers happy hour and late night fare in addition to normal dinner service.
In addition, the experienced bar staff is friendly and efficient; a single member of the bar staff sometimes tends to all the pub’s patrons at certain times of the day.
“This place has always felt like home, like family [to me],” Kate said. “And that’s how I want the customers to feel….We’ve always tried to make this feel like everyone’s home away from home.”
Kate acquired the pub more than two years ago. Prior to that, she worked as part of the bar staff for six years under the pub’s previous owner.
When the previous owner decided to sell, “he approached me first,” she said. Kate, who was at 27 years old at the time, embraced the opportunity and agreed to a seller-financed arrangement for a term of five years. She is now three years away from completely paying off her loan.
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“Nobody has a wad of cash to buy out immediately, so often the old owner carries a note—like a bank—over the course of the payoff period,” she said.
One of the major challenges in transferring ownership was the question of how to retain clientele while asserting herself as the new owner.
“We knew that the number one way to keep old customers was to make sure they knew the staff they loved was still here,” she said.
So she simply changed the business name to Kate’s Pub and used name recognition as a strategy to keep regular patrons coming. The change in business name indicated the change in ownership; nevertheless, Kate has frequently dealt with old-fashioned perceptions as the new business owner.
“[Many people] assume that if you’re a young girl, you have somebody else bankrolling your affair,” she said. “And it’s not the case [for me].”
The biggest challenge has been regulating cash flow and all the “paper-pushing” that comes with business ownership, Kate said.
“Everything in this industry costs a lot of money,” she said. State excise taxes in Washington, for instance, are substantial and licensed businesses are required to pay them from the backend every month, she said. Additional business expenditures, such as labor, groceries, remodeling and signage, require constant attention, and the work of keeping the business alive can be overwhelming.
“When they say that most bars close in their first [or second] year…I can see why; it’s so much work, it’s so many hours, and you’re so stressed about cash flow,” she said.
Kate described her time commitment as “giant.” She doesn’t get a paycheck anymore and has essentially taken a pay cut because of the sheer amount of hours she is working.
As a mother of three children and a youth sports coach, “I just don’t sleep,” she said.
Pub ownership isn’t for everyone; most people probably aren’t capable of working on a schedule like Kate’s. Anyone who aspires to own a bar needs to be “really driven,” she said, and willing to sacrifice luxuries such as time, a social life, energy and money.
“It’s so self-sacrificing….My family anchors me to it, because I can’t fail for them,” she said.
For Kate, the sacrifices are worth the rewards. The young supermom takes pride in her business and has found the sense of ownership over every business detail, “down to the last roll of toilet paper,” to be the most rewarding aspect of her work.
“I was never meant to work for anyone but myself,” she said. (For more information on women as small business owners, see our previous article on Women in Business.)
The art of starting a bar from scratch
Erik Guttridge, owner and director of Grey Gallery and Lounge in the bustling Capitol Hill neighborhood of Seattle, opened his business last January. Calling on his artistic background, Guttridge envisioned a business and created it completely from scratch.
The structural design of Grey is divided into two sections: an exhibition space to showcase and sell art with a special lounge area stretching from the storefront’s glass façade to the elegant walnut counter at back, and a lofted area upstairs. The décor and lighting are subdued and clean; the experienced staff is well dressed and courteous. Overall, the vibe of the business is striking.
In addition to handling financial exposure, an owner is vulnerable to the fact that he or she doesn’t know how the end product will be received. So far, the response from Grey customers has been overwhelmingly positive, Guttridge said.