Reasons Why Bars Fail

Tobin Ellis of BarMagic is one of Nightclub & Bar’s most popular featured speakers. He has worked at bars all over the globe and learned what works best over several years in the industry. Among the things he’s learned is that many – if not most – bars fall apart in the planning stages.

One of the first problems he tackled is the fact that creating a concept via committee is a fool’s errand: “Get past three people planning a concept and it’s over,” Tobin stated bluntly. Avoid letting your friends or significant other having a say in your concept.

The second problem often exists in the pro forma stage. The fact is, bankers and accountants simply don’t know how to design a bar, which is where a respected consultant becomes incredibly important.

Capitalization is also an issue that can kill a business dead. This is not just in terms of having the wrong budget, it’s also due to a lack of accounting for slow times. Budget well beyond three or four months so you’ll have a better chance to deal with days, weeks and even months that may see a decline in guest traffic. Site selection is incredibly important, as is lease negotiation which tied into your site.

The seminar wasn’t all about starting up your bar, however. Staff management is, of course, crucial. Tobin put it to the room that fair and equal are not the same thing. “Fair is earned,” said Tobin of the difference between the two, “I want to reward good behavior, not seniority.” If you want to avoid being walked all over, don’t present yourself as a nice guy or woman who wants to be every staff member’s buddy.

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