The Bittersweet Truth of Starting a Bar

Posted on July 9, 2009
Filed Under Chuck Taggart | 1 Comment

Chuck Taggart is a dedicated cocktailian and native New Orleanian now living in Los Angeles. He publishes The Gumbo Pages.

It’s the dream of every cocktail nerd.  A way to make money from our passion. We’ve all thought about it, for at least a few minutes, haven’t we?  ”How cool would it be to have my own bar?”  It’d be very cool indeed.  It’d also be more work than you could possibly have imagined.  Could you survive it?

Some friends of ours, longtime professional bartenders all, have done it and lived to tell the tale.  Other successful businesspeople we know have done it as well.  Some of them were the panelists in Wednesday’s excellent seminar, “The Bittersweet Truth of Starting a Bar.”  We saw our friend Eric Alperin of The Varnish in Los Angeles (one of our very favorite bars) before the session started, and he gave us the gist of what their session featuring advice about starting a bar would be:

“Don’t.”

He was only half-kidding.  Part of what they were trying to accomplish was to discourage would-be bar owners a little bit, if only for the reason that it’s likely far more daunting, far more work, involving far more knowledge than you ever imagined.  This was the first of the sessions aimed at professionals rather than enthusiasts, and I think it was one of the most valuable that Tales has ever offered.

All of our panelists are well-versed in the monumental work of starting a bar.  Moderator H. Joseph Ehrmann is the owner of Elixir on San Francisco, and rounding out the panel were Cedd Moses and his partner Ricki Kline of 213 Ventures in Los Angeles, who own 14 bars in the downtown area. They were all in agreement on one thing — the truth of starting a bar really is bittersweet.

First off, being knowledgeable about cocktails and being a skilled bartender is only the tip of the iceberg.  The most important set of knowledge you can have is business skills, and the more business experience and training you have the better.  Take some accounting and management classes at the very least — H. went to school and got an MBA.  Cedd and H. both spoke about the enormous importance of writing your business plan, which is vital to the entire operation. If you’re from a bartending background, you might not know about this, and you need to.  It’s key.  You need to go into great depth and create an amazing business plan with every aspect of your business, projections, cost points, liquor cost, staffing costs, etc. laid out ahead of time, in great detail, and with constant updating.  When you open you have your guidelines and you know you can hit a home run and have your business be successful both financially and in creating something you believe in.

Eric emphasized the importance of a bartending background as well, what he called “the kung fu of bartending,” which is basically hard work at everything you do. It’s taking that metaphor and knowing that hard work and specificity, making a system for every tiny aspect of the operation, is going to become a kind of magic.

Eric’s background was in New York restaurants (the Batali/Bastianich operations Lupa and Vinoteca) and in bars like Milk & Honey and Little Branch.  ”All those experiences compelled me to make the machine run more efficiently.  I’m there constantly tweaking and making the environment for my bartenders, staff and customers to be a paradigm for where I want to work.  If you’re specific about what you want, and it’s going to blossom.  People who come to your bar are going to see and feel that.”  He emphasized the importance of getting to the level when you can walk away from behind the bar, even having your first vacation, is all about the first three years put in being there every single day, tweaking and setting up systems.

How do you do the little things?  ”There’s nothing that annoys me more than when a system isn’t adhered to,” Eric said.  Every detail, from how the ashtrays are put out to whether a napkin goes down when a drink is served, is part of your system, exactly how you want your operation to work.  ”If you’re opening a bar, it’s your bar — build it and run it the way YOU want it.  Be specific in what you want, and it will allow your staff to shine.  I want them to buy into my system too.  Make that happen on a daily basis and use that to figure out a way to inspire your staff.”

Ricki spoke at length about his role in 213 Ventures as the designer and being in charge of construction, how having someone skilled at this in your operation can make or break it. “So many people have a particular architectural ax to grind, to achieve something for themselves.  Their interests are not your interests.  Choosing the right person to do this kind of work is essential — before anyone else arrives on the first day, this is the first person who’ll be there.  Make sure they’re working for YOU.  If you’re the owner and not the bartender, don’t leave it up to me to design your underbar and back bar — everyone has their own specific way of working.  Eric knew what he wanted from day one.  It wasn’t always easy to give it to him, but we did, and now he’s a very happy client.”

It might sound dry to someone who only thinks about how much he or she loves to make cocktails and work with people to show them a good time, but what we learned, just scratching the surface of what one needs to learn, is that it’s all about the numbers — those of you who hate math … sorry.  ”Owning a bar is different from being a bartender. You have to understand the numbers, the business.  You have to take a finance or accounting class if you have no background.  It’s a very difficult business to make money in. You have to get your finances in order, and have somebody really good with it at the masthead.  Have a love affair with Excel.”

They talked about raising money from investors too, which is pretty much the only way you’re going to be able to go forward.  ”The banks are not going to lend you money to start a bar,” said H. “They’re not.  They’re too risky.”  You also have to make sure you protect yourself from your investors too, keeping them silent for the most part, and H. emphasized the importance of keeping control over at least 51% of your business.

The session could easily have taken up two full days, as we didn’t have time even to get into liquor ordering, inventory maintenance, hiring and training of staff.  There was so much information it made your head spin — I had seven pages of notes — and they were only scratching the surface.  It was daunting, because it was meant to be.  If you don’t have a handle on this, if you want to open a bar because you think it’s cool, you’ll almost certainly be out of business in less than six months.

We tasted a lovely cocktail called the Winter Sour, mixed by Chris Ojeda of The Varnish.  It’s a simple but tasty Campari sour with a rosemary syrup, both bitter and sweet, which was a metaphor for the business — bitter and sweet with a successful balance.  The yin and yang. The finance and math are the bitter, the profits are the sweet.  You won’t get the sweet unless you focus on the bitter!