Tips to think about before opening a bar or restaurant

Posted on: by
New bars and restaurants

Maybe you cook for everyone and anyone you meet, or maybe you’ve spent your entire youth in bar after bar. Whatever the reason, before you think about opening that bar or restaurant of your dreams, make sure you know what you’re getting yourself into.

Research, research, and more research

There is a reason that 60% of restaurants and bars fail during the first year, and a whopping 80% fail by the 3rd year. It isn’t for lack of effort, good food, or good atmosphere. It really boils down to research. There are so many aspects to running a successful hospitality venue. You will need the trifecta in order to succeed: location, talent, and concept.


Location is listed first because it can make or break a business. Having an amazing bakery that excels in breakfast and cupcakes will probably not fair all that well in a very happening night area – no matter how amazing the baked goods are.

Create a Killer Business Plan

While not appealing to many creative entrepreneurs, having a thorough business plan is the key to a successful business. Your business plan needs to have a clear concept, description of your market, your marketing plan, your menu and pricing, and of course, detailed financial data that include marketing, operating, and administrative costs.


The last thing you want to think of when opening your new adventure is what you’ll do if your business fails. However, coming up with an exit plan can help you identify your “make it or break it” points and can even help you stave off closing. A helpful way to come up with your exit plan is to think of everything that can go wrong and how you would handle it.


Of course, we offer bar and restaurant insurance (if your business is in Sacramento or anywhere throughout California) that can help you manage your risks including:

  • Property insurance
  • Equipment breakdown
  • Food contamination/storage
  • Liquor liability
  • Auto/valet liability


Pad Everything

Delays, unforeseen disasters, and optimism have an unfortunate way of affecting every business.


  • Plan on having six to nine months of working capital from the beginning. You’ll be surprised at how quickly everything adds up.
  • There’s typically a downturn in the month or two after the grand opening when all the buzz has worn off.
  • One thing all restaurant and bar owners know, and begrudgingly understand, is that equipment breaks down at the worst possible time.
  • Used equipment is significantly cheaper than new.
  • Construction projects always take longer and end up costing more money that what is initially estimated. Whether it’s a delay from a manufacturer, an overlooked aspect, unexpected surprise when a wall was opened, a mistake in the original architectural plans, etc., make sure you plan for these setbacks.
  • Curveballs will be coming your way. Maybe your staff comes down with the flu, or a pipe bursts only to have more burst while you’re fixing it. Plan for the unexpected.


Good luck and much success!


Comments are closed.