The perils, pitfalls and positives of owning your own venue was one of the topics tackled at this year’s Edinburgh Bar Show.
The event, now in its second year, was organised by Panda & Sons owner Iain McPherson and Edinburgh Cocktail Week founders Jamie Faulds and Gary Anderson and ran over four days in early April.
Each day featured a range of seminars during the afternoon, followed by bar takeovers and parties in the evenings. It was free to attend for anyone working in hospitality.
On the third day of the show two separate seminars tackled the subject of setting up your own venue: Behind the Bar: Ownership, Innovation & Flavour; and From Bar Back to Bar Owner.
Speaking at the first seminar Mari Chierchia and Kim Toft, owners of Daddy Marmalades in Glasgow, gave attendees a number of tips to consider when they are thinking about taking the decision to open their own place.
These included being clear on why they want to open their own venue, speaking to other bar owners to get as much advice as possible and making sure they are prepared for the volume of work that will be required when opening and running a place of their own.
Among the pitfalls of running a business highlighted by the Daddy Marmalades owners were ‘hidden costs’ such as accountant, legal and licensing fees and even the surprising cost of appliances such as fire extinguishers.
“There’s all these little things,” said Kim. “You don’t need to be an accountant, but asking as many bar owners as you can is really important. Just about the little costs. They’re so little and there’s so many of them that one bar owner won’t be able to tell you them all. So it really is important to speak to as many people as possible.”
Mari added: “For us there was loads of hidden costs. When we were opening the bar, we sat down and said ‘how much money do we need to keep aside for X, Y and Z?’ And then when we actually opened there were costs that crept up.”
Missing family events and the need to have an unshakeable sense of self belief were other challenges highlighted by the pair. But they also stressed that bar ownership is more than worth it, if you are prepared to put the work in.
“The short answer is it is 100% worth it,” said Mari. “I think everybody should back yourselves, open your bar. Look into the financial sides, but I believe that every single person in this room and beyond can open their own bar, if they really want it enough.”
Kim agreed, saying: “I don’t like subscribing to that sense of ‘it’s up to you’, but part of it is. It depends on how much you are willing to do, to be blunt about it. But it’s 100% worth it. I love it.”
That was echoed later the same day, when Iain McPherson of Panda & Sons and Nauticus, Will Ford of The Wildcat and Satyr and JJ Goodman of London Cocktail Club took to the stage to discuss their own experiences setting up and growing their businesses.
Goodman, who owns bars across London and the south of England and recently opened his 25th venue, said when he opened his first bar in 2008 he lost money for nine months straight.
“You should budget for that, by the way. Not budgeting for that is really sleepless,” he quipped.
He went on to advise people considering opening their own bars to work for both independent businesses and larger chains, to get experience of creativity as well as structured companies and back-of-house operations.
On the subject of raising money for a first bar, all three speakers lamented the difficulty of securing money from banks – particularly for a first venue – with McPherson and Goodman both extolling the virtues of fixed repayment loans from friends and investors (Goodman, additionally, offers his investors a small amount of equity in the venue).
And the panel agreed that, for a first venue, taking on a smaller unit is a good idea.
“Sometimes bigger isn’t always going to equate to more sales,” said McPherson. “I think if you are going to do your first one, maybe look at doing something that’s slightly smaller. Because you want to feel like there’s an atmosphere with maybe five or ten people. It gets easier for people to invest (after the first bar) and then you can scale up from there.”
He also advised aspiring business owners to be careful with their cash, even when things start to go well.
“Don’t just splash the cash like it’s never going to end,” he said.
“Really think wisely about your money. Maybe open a second bar. Buy your apartment. Get assets. Because it’s not always going to be rosy forever, so plan for the worst when things are going well.”
