Dear PoPville – Reality Check: How Hard is it to Open up a Bar?

Photo by PoPville flickr user Lauren PM

“Dear PoPville,

If the readers were to open up a bar, restaurant or food-related establishment (e.g. like a Cork Market) in DC, what neighborhood would you do it in? What kind of startup capital goes into something like that?

And thinking of that, if bars and restaurants are such bad business investments how come so many keep opening up? Are they all losing money? Why is it that all the seemingly sane advice that I ever heard growing up was that opening a restaurant was like throwing money down the toilet – that the likelihood of success is so small that it is not worth it. Has that all been a lie?

Obviously I ask these questions because I’m one of “those” people who hates their job, has always dreamed of doing something with food and thinks that, if the right mix of things comes together, that I could make it work. Reading the Duplex Diner post and linked-to Blade piece made me think that it isn’t such a pipe dream to do these things but I would love a reality check from the PoPville readership.”

65 Comment

  • Where would I open a bar/restaurant? Parkview/Petworth either GA or Upshur. Why? Close to metro, lots of development coming online. PLUS, the commercial spaces are small and similar to that of H street and 11th which lends itself well to local/smaller/unique spaces. Its gonna be the next H Street (in a good way, not the crappy pre-2005 way). And streetcar is coming….
    But yes, its hard to open a bar mainly because of the hoops the ANC makes you jump through to get a license. Nothing “voluntary” about those agreements.

  • Open a good gay club on Barracks Row or Pennsylvania Ave SE. I swear, every other person I see in the neighborhood is gay, but they all go out to NW to party since there’s not much here.

    • Actually, Remmington’s is on PA Ave near Barracks Row and seems to have been dying a slow death for the last 10 years or so. Every time I’ve been (about 4 times in the last 6 months) it’s empty. Banana Cafe on 8th is sort-of gay when they get the piano going, but really more of a restaurant.

      There was another country-western gay bar on 8th Street (maybe where Lola’s is now?) called Stetson’s. It closed about 9 years ago.

      I don’t think Barracks Row/Capitol Hill is a good spot for a gay bar and here’s why: the neighborhood is essentially a bedroom community for more established folks who don’t generally stay out all night on weekends or don’t want to go out only for drinks on a weeknight. The bar/restaurant model seems to work better over there, which may be why Banana seems to be doing a more brisk business than Stetsons. The young, single, drink-to-socialize crowd seems more concentrated in the Dupont-Logan-Admo-Col Heights-Shaw neighborhoods of NW.

      For gay bars, there’s also the advantage of clustering around the established Dupont-Logan area: folks out for a night of fun like to be able to bar hop by foot. That may be a reason why Remmington’s always seems so lonely (although I also think the bar owner owns the property, which as people below have said, makes holding onto a business easier).

      If I were looking to site a gay bar I’d go for the area around Nellies-Town (9th and U).

      • No one goes to Remmington’s because it smells weird, it’s nichey, and hasn’t been updated in 25 years. Turn it into a real club with fresh decor and good dance music and I guarantee people will come. The only reason our ‘hood is characterized as a “bedroom community” is because there simply aren’t any clubs for the residents to go to. Phase One does get packed on the weekends but it would be nice to have more options.

        • haha…you’re right it does smell weird. I guess that’s not really part of the charm.

        • I think it’s the carpeting. We actually like Remington’s but my brother won’t go in there for that reason. He has an aversion to drinking anywhere that feels like a community center.

      • It wasn’t called Stetson’s. I’m blanking on the name now. It was where Molly Malone’s is now (I think).
        Oh, Sheridan’s, that’s it.

        • Right, sorry. Stetson’s is the c/w bar down in Atlanta. Giddyap!!!

        • Molly Malone’s was Finn McCool’s previously.

          Anyway, you can’t really base assumptions on what was going on 9 years ago. The demographics have changed a lot since then and half the businesses on that street wouldn’t have survived if they’d come earlier.

  • If said person in the original post hates their job but loves food like myself (see my blog), can we then go in on a concept together? Much obliged!

  • Have a solid business plan and research the market first. Be willing to change, or walk away from, from your dream business plan if it doesn’t appear sustainable. I think a lot of these busnesses go under because whatever the owner wants to do doesn’t necessarily mesh with what the neighborhood wants or needs.

  • Restaurants operate on a tiny margin and take a huge amount of work. That’s why many fail, and even if they don’t fail, they are a huge, huge amount of work. I’m not sure about the margins for bars and cafes (probably higher margins, but lower revenues), but it’s got to be a lot of work no matter what.

    If you’re interested in this line of work, you should spend some time working in a bar or restaurant first to see what it’s actually like.

  • the failure rate is really closer to 60%, not myth of 90%. The hard part is getting money and then jumping all the hoops. A lot of places that are opening up are not the owner’s first so they have an idea what is going on. Location is big, you really dont want to be the first bar in a new area either unless you have a really strong catch to get people in, and a big enough bankroll to keep you floating until other places pop up.

    • How many restaurants that have opened on H Street or in the U Street / Logan areas in the past 5 years have closed?

      Almost none.

      The ‘statistics’ people always quote about this are generalized rules of thumb drawn from markets very different from ours.

  • cork market is a bar?

  • The hardest part is getting and paying for the liquor license.

  • Reality- most bars in DC make money, and a lot make a decent of money. It’s the demographics. High income, young population, underserved markets. Adams Morgan is the toughest place to make money because it’s already so saturated, rents are fairly high, and you could be relying on 2 nights per week for 80% of your revenue.

    Restaurants are much tougher, but if you have a bar component, it makes it a lot easier. I personally don’t know how places with no liquor licenses stay in business (Old Jerusalem Cafe, etc). Food costs have been going up dramatically, but you can’t usually pass those increases through to your customer without pissing them off. It’s easier for a new place to do so, because you set the expectation from the beginning.

    In general, I’d go with underserved markets in DC with dense populations of young people with some disposable income. You can see how Rustik is doing well doing just that. Shaw’s Tavern will do well too. I think there’s still a healthy market for places above Petworth metro on GA Ave, and on 14th Street above Columbia Heights metro… Pioneering places (ie risky) would be North Capitol Street between Q and T, Rhode Island Ave NE (near the metro), and Kennedy Street NW. They’d have to be a very unique destination, similar to the way the Red Derby was or some of the first places on H Street.

    Lastly, it’s better to own than the lease. Buy a building. The mortgage will probably be lower than rent (in transitional neighborhoods), and you’ll be more likely to get bank financing since they’ll have a hard asset they can repo. And, you won’t get priced out the same way as when your lease is up (which happens everywhere! Most restaurant and bar closing are NOT because the place isn’t making money, but because they wouldn’t be able to make money after the landlord doubles their rent- a lot can change in 10 years)

    • Nice analysis.

    • In general, I’d go with underserved markets in DC with dense populations of young people with some disposable income

      I don’t think this is necessarily a good angle. It’s probably better to open up in proximity to where people already go out, so you have more of a built-in customer base, rather than expecting your bar to become an neighborhood institution on its own.

    • My partner and have talked about how if there was a fun new bar on Kennedy St. we’d be there all the time. And so would tons of other people in north Petworth! We are dying for a neighborhood place we can walk to (Ga. Avenue and Upshur are walkable, but a bit of a hike in really hot/cold/rainy weather and late at night).

    • The “buy the building” model is what Joe Englert did on H St. He also phased in several establishments (Argonaut, Palace of Wonders, Red & Black, Rock n’ Roll Hotel, Granville Moore’s, H Street Country Club) to give it critical mass. Others followed.

  • Lately it seems much more difficult to get home from a bar a night unscathed than to open/run one.

  • What everyone else said but try to buy the building. For example, something along 14th street of GA Ave. in Columbia Heights that is close to the metro and already commercially zoned etc. can’t be that much. Anthony Bourdain did a great special on old style independent places in NY. The common thread for those that were still around was that they owned their buidlings and were not beholden to the landlord once the area took off.

  • I think it’s really hard to run a profitable bar/restaurant. Even if you’re not in an expensive neighborhoud like Georgetown, Dupont, etc. your rent, utilities… are still around $5000 a month for a small to medium sized place. Add to that another $5000 in payroll and you’re looking at about $10,000 a month expenses. It takes at about 12-18 months to become profitable which means you need about $100,000-$150,000 in cash to stay afloat. You’ll need another $100,000-$150,000 to furnish and equip the place. So you need about $250,000 to open a small bar/restaurant.

    • Double if not triple that due to permitting hoops. Seriously. You need 500k in cash or equity line if you have to do ANY buildout. I know, I’m going through the process.

  • One of the biggest things that I don’t think anyone has mentioned yet is the hassles you’re going to have with the clientele. No matter what kind of place it is, you or your staff are going to have to deal with stupid, unruly drunk people pretty much every night. That takes a lot of the fun out of it.

    • I don’t know about that– depends on the place. But dealing with difficult people in some capacity is definitely a big part of the job.

  • I think the borderstan area is in serious need of a butcher shop. nothing too fancy, but quality somewhere in between HT and the crazy expensive organic rich people shops.

    • I’ve heard that there’s a real butcher at the PanAm on 14th st. (or so said my office cleaning woman when we were discussing costillas.)

    • I think DC in general could use more butcher’s shops. The question is, will that lead to the increased presence of baker and candle shops. One I’d prefer, the other not so much.

  • Work in the industry before you do it, or get a business partner — whom you trust — who has done so. And not “I waited tables for a summer when I was 18.” Real, professional, full-time, experience.

  • Saw a commericial for a new show on the Spike network called Bar Rescue about a guy who turns failing bars back into profitable businesses. He discusses common mistakes that bar owners do that cost them. You could get some handy tips from the show I bet.

  • there used to be a great show on (i think) hgtv called “dream jobs” where people who wanted to own a b&b, restaurant, winery, etc would actually go and do the work for a month or so….my favorite was the guy who wanted to won a bar. at the end he said “I realized, I like going to bars. I don’t like running them. They are two very different things.” Anyway, if I was going to open a business, it wouldn’t be in dc, which offers the trifecta of corruption, incompetence, and meddling in its government, coupled with the rampant nimbyism of the ancs. go to arlington or maryland.

  • open one in Southwest! Differentiate yourself from Station 4 by having a happy hour and cheaper prices. Differentiate from Cantina Marina by having good food. With people before/after Arena Stage and Nats games, a nearby Metro, and development coming to the Wharf in the next couple years, it would be sweet. There are open spaces for rent in the building near the Metro (waterfront Station). In addition to the places I mentioned, there’s a Subway and Safeway there and a bank and Z-burger coming.

    With that said, I’d rather have the existing places get better and use the open spaces for a hardware store and a Hair Cuttery. How DC doesn’t have more cheap haircut places of that ilk boggles my mind. Anyone want to drop $100k to be my silent partner in a Great Clips?

    • Excellent points about SW–I live in that neighborhood and think a lot of residents (and office workers who might want to stick around a bit after rush hour) would love a neighborhood bar. If I knew anything about the business I’d try to open one there myself.

  • Trifecta of corruption, incompetence and government meddling – that’s an awesome description!

  • If you want a “reality check from the Popville readership,” all you have to do is go to the restaurants tab and cruise through all of the commentaries about restaurants and bars. The vitriolic criticism aimed at most new extablishments – often based on one visit – may make you think twice about owning a bar or restaurant.

    You should not judge the ease of opening and operating a bar by the number of new places opening up. Many of these places are being opened by individuals or groups who already have one or more bars and/or restaurants under their belt. As such, they have a track record and assets that make it easier for them to find capital for a new venture and to navigate the requisite bureaucracy.

    Most bars and restaurants do fail. That’s a fact. But that doesn’t mean yours will. Whether you are willing to take that chance will be a reflection of how passionate you are about going down this road.

  • Wow PoPville is full of great advice and zero snark on this.
    Second buying the building and working in the industry for a while.
    I’d also develop a concept that is a place neighbors would want to go to on a regular (at least weekly basis).
    If you are going to do food – start with very few things and do them well. No need to have a large menu when most of its crap – plus it’ll control your food costs.

    No fads or gimicks – cool for a while but will fade.
    Differentiate from others.

    I second the area around Petworth – and north to Upshur. Incorporate the ability to host live music (though that’ll piss off neighbors and slow ANC process)and add a fireplace for the winter. If patios and roof decks bring the folks in the summer – add a fireplace for the winter.
    While you are at it – through in a nice comfy leather coucher or two.

  • I’m thinking a punk strip club, with a seedy dive bar cred, and live bands on a rooftop deck will go over really well with the ANCs everywhere.

  • If you want to know what it’s like to start up a bar head to H. st. on a wednesday and stop by Little Miss Whiskey’s, The Queen Vic, the Pug, Sticky Rice, Toki Underground to name a couple of good places to start and talk the bartenders up about opening new places around there.

    A lot of bartenders move around on H. st and for the most part everyone knows the owners of the bars and bars that are going to be opening. It’s a pretty laborious process that involves a sustained long term commitment of time and capital. There are some very time consuming regulatory hurdles that you have to jump through.

    Also as mentioned earlier the ANC issues is a tough one and you’re pretty much stuck with dealing them even after you’ve already gotten your business approved and your liquor license.

  • Open up in Mt Pleasant. Ha ha, just kidding.

  • I’m surprised no one has mentioned the fact that YOU COULD BE ROBBED. In many DC neighborhoods, it’s likely, not just possible that you will be robbed. I think the Ledroit Market on T Street was robbed every other month in its early stages.

  • The first rule is don’t open any bar or restaurant unless you can buy the property,Even if everything goes perfectly “Which it will not” the rug can and will be pulled out from under you. That being said expect to be almost a million in dept.Pray the neighborhood and more importantly the ANC even want you there and that you can attain a liquor license.

    Assume you get all the above and a good staff a decent location it will still take you a year of day in and day out hustle to build some clientele.This means you should open with enough available cash and or credit to stay open for a year without a single sale.

    I won’t go into the cost if you have to do a total build-out and the monthly cost as this will make your head explode.Basically this is like anything else in life don’t even think of doing this unless you absolutely love it.

    • what % of bars you think own their own building? i’d wager it’s less that 30%.

    • Very conservative advice–though if i had enough money to run a restaurant for a year without one sale i think i’d just keep my money and retire.

  • I honestly don’t know but i know most get pushed out eventually,I would say at least try for an option to buy at some point.Then again if it were that easy 9 out of 10 wouldn’t close every year.What ever your business model is plan for it to take 2 to 3 times longer than expected and plan on your cost being double.

  • Consensus on here seems to be “buy the property.” I have a few friends in the bar/restaurant game, and they have always felt strongly about renting.

    Not sure why the difference in opinion.

  • The problem with leasing is that you’re screwed either way. If you aren’t successful well then you still have to pay the remainder of your contract. If you are successful (or even if your surrounding area becomes more successful) most landlords will renegotiate with that in mind (i.e. they’ll jack up the rent).

    To echo others, getting a job in the industry is a good idea. Not just to learn some of the workings but simply to find out whether you want to be standing on your feet for 8+ hours. Sounds simple but you wouldn’t believe what the sedentary life does to your ability to stand (not to mention hustle) for that many hours on end. If you’re thinking “but I’m just the owner/manager, I’ll have employees for that”, think again. The restaurant/bar biz is very hands on and unless you want to watch your project fail from afar you have to put in the hours.

    As for neighborhoods–I’ve always wondered why more places don’t open down on Pennsylvania Ave near Trusty’s/Wisdom.

  • I’m Happy that everyone’s comments are positive on this post. Made my afternoon 🙂

  • Good luck to you if you go for it! I hope you succeed 🙂


  • You would always want to own if at all possible,When you rent you are always at the mercy of the landlord.

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