Need advice: opening a craft beer bar

At least you're going into this with some experience in the service industry. Your friend has an MBA that is a great start. But it would be nice if you knew someone with store front experience and management experience in that style. You're going to realize that the capital burn is going to be intense up front. There are a lot of things you should consider right from the start:

1.) In your current location, is the beer culture popular? Is the area you were thinking saturated with others?
2.) How are you/your friend going to secure investors? This will be the biggest thing. There is no point in you going into this with less than 20k.
3.) Can you make personal sacrifices? You do have a child on the way. If this is person is going to limit the amount of other employees, you will be working 12 hour days to say the least.

Prepare for this. If you do go in, the next 3+ years are going to be rough. I don't know your age. If you are younger then you can afford to take risks but with the responsibility of a child, a lot has to be considered.

 

Agree to everything you've said! Also to the OP you have to try to appeal to the people that aren't into craft or don't really care for it, a customer is a customer and profit is profit in the end. I.E. find ways to get those non craft customers, your best bet with that is great food, paired with a wide variety and styles of craft beer.
A local craft beer bar where I'm from always offers a steal the glass night every wednesday every week, great promotional thing to pack the house and get people there as well (the place is always packed on that night too.)
If you have good craft beer offering's the craft community will go, but how do you get the other people there should be your main concern. Cheers and good luck to you!

 

location, location,location There is a very successful craft beer bar in my town. They do not in any way cater to the macro crowd, What is the trick here? They are by far the best craft beer bar in town, prices are very reasonable and their competition is far away. Oh, and now at least four of the taps feature their own beer, which is damn tasty and compares favorably with the big guns here in Oregon. And that's saying a lot.

 

LOCATION! And most of all it has to be a good place to hang out. If it's just all about the beer with nothing else really going on it will only attract a very very small crowd.

 

Knowledge. Know what your selling, and train your servers so they know it, too.

 

The manager will be key. Keep employees responsible. Just watch Bar Rescue, Jon Taffer knows all.

 

20 g's probably isn't going to cut it. that's barely enough to cover you're first three months rent and inventory much less tap lines, sanitary equipment, employees, etc.

you'll all need a business plan, marketing plan and capital outlay just to start and none of those will ensure investors.

 

you should have enough going in to live off of for a year. the general public is a fickle bunch and preferences change for intangible reasons. make sure you and your partners have analyzed the market thoroughly and do as many comparative set studies as you can beforehand. hospitality is by definition the lack of discomfort. never forget a face and remember personal preferences from your clientele and you should do alright.

 

I am friends with the owner of a very successful craft bar/bottle shop. He spends hours on the phone every day just working deals with distributors. He visits breweries around the country. You don't just call the local beer distributor and order kegs of Hopslam and KBS and Pliny and the special stuff that comes out rarely or seasonally and get it. They only get so many kegs and those go to the customers they have relationships with. This guy is successful because he puts in hundreds of hours working his distribution network. Opening a craft bar is easy; if you can't procure the best beers keeping it open is going to be very difficult.

 

I don't know much about running a business, so this is from from a craft beer consumer POV: I've been to too many places that emphasize the number of beers they offer (over 50 different rotating taps!) but most of these are not very good, and they do not rotate often. When I see a craft bar, I look for quality over quantity and its a big plus when the place has tasting events and other things like that.

 

Location means a lot, and not just in town, how about state? Some states have far better Distro with access to more product. I didn't see a location listed, but I'd think it would be more feasible to open a craft bar in Pa or NJ than North Dakota. Relationships with the vendors sales guys play a big part here, with the limited Distro stuff so popular they are the ones that allocate where and to whom.

 

As others have stated/implied, write a business plan and be very careful you are realistic about it.

Get a lawyer who knows the alcohol and bar/restaurant business laws to review and advise you on your business plan. Not only do laws vary from state to state they can vary from municipality to municipality. Depending on your location a distance of one block in location can make a huge difference in the laws that will apply to the operation your business.

Also, get an accountant who alread knows the bar/restaurant business to review and advise you on your business plan. Thinking you both can do it all can be a trap.

 

I'd have to re-emphasize the point that Cyrushire made about the business plan. Understanding your business model is key. Here are a couple links (to more links) with business plan summaries, and other useful materials

http://www.hbs.edu/entrepreneurship/resources/businessplan.html
http://www.sba.gov/tools/sba-learning-center

Make sure your plan in realistic, model best and worst case in terms of customers, costs, etc.

Your assumptions should be based in as much fact as possible. Get price lists from equipment resellers and beverage distributors.

Because of your experience, it should be easy to talk to other bar/restaurant owners, beer sales people, bartenders, waitservers where you can learn a lot of great stuff you won't get from a book i.e. Most alcohol distributors will require you pay cash initially before they will open a line of credit for you.

 

the problem is, if you open a 'craft beer bar' you will draw these obnoxious groups; 1) insufferable beer geeks who want a new Heady Topper or Pliny caliber IPA every week and the other taps must rotate daily, never repeating the same beer twice, 2) people who think Shock Top and Blue Moon are craft beers 3) the I only drink Guinness (or only drink Heineken) (or only drink Yuengling, etc.) crowd, 4) those regular folk who will bitch if you don't serve Coors Light, Bud Light and Miller Lite.

If it was me, I'd open a Pub, which is short for Public House, meaning what kind of strangers and guests would I want hanging out at my house and design it accordingly.

 

I honestly don't mean this as a dick comment, but the opinions and/or 'business advice' of a bunch of strangers on the internet shouldn't be the deciding factor for you.

The fact you posted here probably tells you enough about which direction you should head in.

Maybe wait until they have a solid plan (including basics such as your exact role). All seems too vague right now to make such a major decision. Particularly with a child en route.

 

I will go to your bar regardless

 

Something that a lot of bars don't do: Updated beer menus DAILY.

Beer menu that list name, style, ABV, and IBU.

 

Don't be a 'partner', be a 'manager' i.e. employee. Take the more-than-you're-making-now salary and some sort of sales based profit share (but without equity ownership, investment, and liability via personal guarantee of the lease). They want you, they came to you...they value what you bring to the table. This is a compliment.

But keep your money in your pocket. This is not a time in your life for high risk. Sure, if it takes off, they'll reap most of the benefit. That's as it should be--but again, try to negotiate some sort of profit-share so you have a little bit of the upside, but avoid the downside.

 

People whose business acumen I respect say partnerships should be avoided.

Also, ignore those who write that you have to offer Bud, Miller or Coors to survive. I've been to plenty of successful, crowded, busy craft bars that don't offer AALs.