Tag Archives: OPEX

Is it Profitable to Own & Operate a Bar

Can bars make money for their shareholders? This is the question that almost all budding bar owners are trying to figure out before they take the plunge to open their own dream bar.

Unfortunately, there is no simple yes or no answer because it really depends on a number of factors that vary for different companies and ventures.

Can it vs Will it Make Profits

So if you want to know if you CAN make a profit by running a bar, the answer is yes, of course you can, since there wouldn’t be so many bars in existence if it wasn’t profitable for the people who own them.

However, if you’d like to know whether you WILL make lots of money by setting up the bar you have in mind, then the answer is that it is certainly possible, as long as you have all the knowledge, experience and a fair bit of luck on your side.

Profitable Cash based Business

The bottom line is that bars can be extremely profitable cash businesses that have very few bad debts from customers who owe them money, assuming you’re not foolish enough to give credit to your regulars.

It is one of those businesses where customers pay up front for a product even before it is consumed, and credit doesn’t have to be given, which means no collection problems. At the same time, if you play your cards right, your suppliers may give you 30 to 60 day (or more) payment terms to settle your purchases, so you’ve got the best of both worlds.

Possible to Consistently Make Money

If you have the right formula, location and team, it is possible to earn a lot of money every week, especially during the initial months when you’re the new and hip place in town. Even after this honeymoon period, if you know what you’re doing, you could be cash flow positive for a good few years or more, and end up making a huge return on the initial capital invested.

Unfortunately, while it is certainly possible to generate extraordinary amounts of profits from a bar, the majority of businesses end up loosing money. The ones that are successful tend to be owned and run by experienced operators who have normally been in the industry for many years and have learned the tricks of the trade from their past failures.

Therefore, the question that aspiring bar investors should be asking is, what does it take to own a profitable bar, or, how can new entrepreneurs set up and operate a bar that consistently makes profits.