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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Bar SWOT Analysis

 

Strengths

 

People are always going to want to go to bars. In times of economic recession, bars, taverns, and nighttime entertainment venues remain popular. As such, these businesses are generally able to remain profitable even when overall discretionary income declines. Bars usually produce gross margins of 80% to 85% on all revenues (although if the location serves food - the overall gross margin is slightly lower). The barriers to entry for starting a new bar or tavern location are considered moderate. The most difficult aspect of starting a new alcohol selling facility is acquiring the necessary licensure from a municipal or state government. The startup costs are reasonable with most bars requiring $75,000 to $200,000 of startup capital. In some jurisdictions, these costs may be much higher if the number of available liquor licenses is limited. The operating costs of maintaining a bar range from moderate to high depending on the location and size of the facility. Bars, if properly run, are stable small business investments.


Weaknesses

 

All cities and towns (except where alcohol is prohibited) have a number of drinking establishments. As such, bar owners must effectively differentiate their place of business from similar locations. This is usually done through interior design and layout, which is why having a qualified architect assist in the development of the bar is imperative. Additionally, one of the other weaknesses is the high operating costs during business nights. A bouncer is usually required in order to prevent underage drinking.

 

Opportunities

 

It is no secret that bar owners frequently try different ways to draw patrons to their facilities. Depending on the type of drinking establishment, bar owners may seek to have live music, games, TVs, and other ancillary entertainment services in order to make sure that people come to and become familiar with the bar's brand name. If the initial bar location is highly successful then an owner may seek to develop additional facilities. Banks generally lend money to food and beverage entrepreneurs given the high margins generated by these companies.


Threats

 

Beyond competitive threats, there is nothing that will change the way that these businesses operate. From a liability standpoint, it is imperative that a bar have proper age verification checks in place in order to reduce the risk of someone underage entering the bar. In some jurisdictions, this can be a major violation and multiple violations may cause a loss of a liquor license.


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