10 pros and cons of owning a bar

Bar ownership is a popular dream for many entrepreneurs. The exciting environment, interesting clients and fun events add to its appeal.

As with any business, it's important to compare the pros and cons before deciding to own a bar. Bars are high-risk, high-reward business ventures but you can improve your chance of success with the right preparation.

Here are 10 pros and cons of starting a bar you might not have considered:


Pro: High profit margins

The first question you should ask is, “What are the average profit margins for a bar?” If you decide to pursue this goal, knowing what your average local profit margins are will help you plan your finances. Successful bars can have huge profit margins, achieving up to 80% on average.

To help you understand that number better, restaurants usually have much lower profit margins. For example, restaurants are often considered lucky if their profit margins are more than 10%.

Bar owners enjoy such high numbers because the profit from alcohol is generally quite high. Even a quiet business day can have a positive impact on your financial gains.


Pro: Local community

Bars are frequently a big part of their local community, providing a space to meet for residents and visitors. This results in loyal customers who come back repeatedly, which helps you to establish your business.

A well-connected community is essential in promoting your bar and can improve brand recognition. When people know your business, you’ll not only get more customers, but you will also attract more experienced staff. Your good reputation will be a big benefit as your popularity increases.

Pro: Different business models

Bars come in many varieties, from small local establishments to large franchises. This provides plenty of different bar business models to choose from. Entrepreneurs can find one that best suits their needs and goals.

It’s also easy to include extra features that can increase your bar’s profits. Many bars offer food, games, karaoke and live events. All of these can increase customer turnout and grow your profits.

You can have any kind of bar you can imagine, as long as it’s consistent with your brand. Bars provide a lot of artistic freedom to express yourself and create a unique customer experience.


Pro: Business connections

Managing a bar can lead to connections with suppliers or other local business owners. As a place to socialise, bars attract all kinds of customers who might become valuable business relationships. These connections could help to grow your business and provide opportunities to grow.

Even if you don’t need their professional services, these connections may have useful referrals for your other needs. Each connection you make has unique knowledge and experience that can help you in the future.

Getting recognition from your community is the first step to building a reputation. Networking with other businesses will also help you build on that. It also lets you benefit from others’ expertise at the same time.

Pro: Daily physical activity

Owning a bar can be physically demanding, with long hours spent on your feet. However, this also means that owners get a lot of exercise during the day, which can have many health benefits.

The main benefits of an active lifestyle include improved heart and lung health, lower risk of heart disease, better blood pressure, and stronger bones and muscles.

Many people feel too tired to exercise after their workdays. One benefit of bar ownership is getting essential physical activity while you work. If you don’t enjoy sitting behind a desk and like to move around, then this might be the opportunity for you.


Con: High start up costs

Start up costs for a bar require a large amount of money upfront. When starting a bar, you can expect the following expenses:

  • rent
  • licences
  • equipment and appliances
  • stock and supplies
  • Point of sale (POS) software
  • staff wages

These costs quickly add up to a big bill. While many factors influence startup costs for a bar, it takes at least €100.000 on average, and sometimes as much as €800.000.

This can make it difficult for some entrepreneurs to get started, especially if they do not have access to funding. You may qualify for a business loan, but there is always a risk you may not earn enough to repay it.

Con: Licenses and strict regulations

Owning a bar comes with a long list of legal requirements. These include following strict regulations, complying with health and safety standards, and obtaining bar licenses.

What licenses do you need to open a bar? Unfortunately, there is no easy answer. These regulations vary greatly between different regions, so you’ll need to research your specific local laws. Your local city council is a good place to start asking these kinds of questions.

Failing to follow the many legal rules associated with bar ownership can result in fines and the potential loss of your business. So be sure you have all the right requirements in place before you open.


Con: Staffing problems

Bars require a lot of staff working at unusual hours. Common positions that need to be filled include bartenders, servers, managers and security.

Finding reliable employees can be a challenge. Busy areas provide a larger population to hire from but there is also more competition. You may need to offer competitive salaries to attract good staff.

Bar staffing problems, from unprofessional employees to not having enough people to cover a shift, can cause a negative customer experience. If staffing issues continue, your business will likely suffer, so keep that in mind.

Con: Aggressive customers

Unfortunately, bars can attract aggressive customers, who may become intoxicated and cause trouble. Alcohol changes our brain chemistry, so we feel more confident and less inhibited. This makes people more likely to act on their impulses, leading to some bad choices.

This can create a challenging and potentially dangerous environment for staff and other customers. You need strict policies in place to prevent this from happening.

Train your staff to pay attention to client behaviour and know when to stop serving someone alcohol. Consider hiring security to handle these kinds of clients and keep everyone safe.


Con: Time commitment

Running a successful bar requires a lot of time and effort. Managing staff, doing administrative tasks, and keeping your bar well-stocked takes a lot of time. This can mean long work shifts, especially in the early days of your business.

Working late into the night can also strain your personal life and relationships. If you value normal business hours or having free time in the evenings, you may find owning a bar extra challenging.

In short, owning a bar can be a highly rewarding and profitable business venture, but it comes with difficulties. It's important to consider both sides before getting started. While this fast-paced business is not for everyone, many enjoy this exciting career path and start bars that add value to their local communities. With careful planning, a strong work ethic and a commitment to providing excellent service, owning a bar can be a fun and fulfilling adventure.