What You Need to Know to Open a Bar in New York City

By Heather Holland on December 9, 2013 7:52am 

Slideshow
 Seasoned bar owners share their tips on how to open a successful bar in the city.
How to Open a Bar in New York City
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NEW YORK CITY — Joe DiPietro discovered he had little idea how to run a bar the night he opened No Idea Bar.

He had ordered no cranberry juice, didn't have enough ashtrays to go around and ran out of single dollar bills partway through the night.

“We really didn’t know how to run a bar," DiPietro, 50, said about opening the now-closed Flatiron favorite 21 years ago.

To spare would-be bar owners from making the same mistakes, DiPietro and other nightlife entrepreneurs recently shared their tips on opening a successful watering hole, from finding investors to hiring reliable staff.

Small details are important, the seasoned bar owners said. Buy cheap light bulbs because you're going to need a lot of them, even in a dimly lit bar. And pick a location near a bank, so you don't have to travel far to deposit your nightly haul, they said.

It's important to remember you owe your livelihood to the people you serve, even the customers who are rowdy and difficult to handle, they said.

“It’s tough to swallow that the fighters and pukers are the ones who really pay your bills," said DiPietro, who closed No Idea and opened a similar bar in Chelsea called One Star. "You have to be idiot-proof."

Pig 'N' Whistle owner Ken McCoy, Bar Great Harry owner Ben Wiley and DiPietro said nearly anyone can open a bar in New York — as long as they follow these five tips:

1. Make Your Mistakes on Someone Else's Dime

Before opening your own bar, why not learn the ropes while someone else pays the bills?

Get a job as the manager of a bar, which will give you the chance to learn the basics, including making staff schedules, ordering inventory and tracking cash flow, said McCoy, 37, who lives in Connecticut with his three kids.

“If you get the opportunity to go from being a bartender to being a manager, take it,” McCoy said. “On a very base level, you can make mistakes on someone else’s dollar. But really what you can do is learn.”

McCoy was 11 years old when he got his first job, packing empty bottles into cases at his uncle’s nightclub in Ireland.

He moved up the ranks, working as a bartender in New York and then getting promoted to manager at the Pig 'N' Whistle location in Midtown. He joined the business as a partner in 1999, he said.

Now, McCoy owns Pig N' Whistle's three locations, at 922 Third Ave., 497 Third Ave. and 951 Second Ave.

“You learn a lot as a bartender, but you’re behind the bar looking out,” McCoy said. “That’s very different from being on the other side looking in, or when you’re downstairs in the office and you have to think of everything.”

2. Convince Investors to Give You Money

Unless you're independently wealthy, chances are you'll need some help putting together the six-figure sum needed to open a bar in the five boroughs.

After exhausting your friends and family, search for investors who want the cachet of owning a local hot spot but aren't going to demand a big return right away, McCoy said.

McCoy suggests asking 10 investors to pitch in $50,000 each, with the promise of a 2 percent stake in the bar's profits.

"Many of these...investors are looking for the prestige in owning a bar or restaurant," McCoy said. "They probably make little to no return and probably expect very little [too]."

For a bare-bones bar in Brooklyn, be prepared to spend at least $200,000 to start up, according to 34-year-old  Carroll Gardens resident Ben Wiley, who owns four Brooklyn bars with his brothers Seth and Mike.

Wiley opened Bar Great Harry, located at 280 Smith St., six years ago, and went on to open the bars Owl Farm, located at 297 9th St., Mission Dolores, located at 249 Fourth Ave., and Glorietta Baldy, located at 502 Franklin Ave.

“If you go with anything less than $200,000, you’re asking for problems,” said Wiley, 34. “But that’s because our bar is on the small scale. If you want something bigger…[or] you tack on a kitchen to all of what [you] do, you’d need a half-million, easy."

Startup money covers construction, furniture, inventory, labor costs and more. The amount will depend on where the bar is located and whether you've leased a gutted space or one that's already set up as a bar, McCoy said. 

“It all depends on how big the space is, how much you want to invest there and the quality of equipment you’re getting,” McCoy said. “If you’re taking over a place…you’d need maybe $25,000 to $50,000 for a couple of extra TVs and paint.”

In Manhattan, expect double the cost — even for a basic bar without a kitchen, according to DiPietro.

“I’m not investing in a kitchen, artwork or even two-ply toilet paper,” DiPietro said. “Still, there’s probably no chance you can do it for under $400,000 in Manhattan.”

3. The Community Board Will Grill You — Be Prepared

It's possible to get a liquor license in New York City without the support of your local community board, but it helps to get board members on your side.

While the State Liquor Authority ultimately has the power to issue liquor licenses or deny them, community boards play an influential advisory role — so it's worth doing your best to impress, bar owners said.

"It's like going to the principal when you were a little kid," Wiley said. "You gotta dress up, you gotta go over it and answer questions, and you're nervous as s--- and your voice shakes and you get grilled."

The best way to get a green light from the community board is to be honest and take responsibility for any problems that might come up, McCoy said.

“When I was opening up here [in Midtown, the community board] tried to block me,” McCoy said. “They were having some issues with a couple of bars up the street.

“We’re selling alcohol. We're going to have problems. So I said to them, ‘I can’t promise there won’t be a problem at the Pig 'N' Whistle, but what I can promise is that if there is one, I’ll deal with it.”

First-time applicants should be prepared for the community board to negotiate the bar's hours of operations. Many community boards want new bars, especially by unproven owners, to stop serving alcohol by 2 a.m., even on weekends.

“It’s just a matter of convincing them that you’re not a bad person,” Wiley said. “Your record speaks for itself. That’s where neighborhood relations, and not burning bridges, and being friendly to cops comes in…it all comes back to you.

“If you go up and you’re honest, and you tell them what you’ve done in the past, who you are — they might hem and haw, but at the end of the day, they’re probably going to say yes," he added.

4. Push for Free Rent — Or at Least a Good Deal

Don't sign a lease you can't afford — and do your best to get free rent if you're putting a lot of money into the property, bar owners advise.

“If you’re taking a raw space and you’re going to invest $400-, $600-, $800,000, whatever it might be, is the landlord going to allow you free rent to do major construction or capital improvements to his building?” McCoy said.

“Sometimes the landlord will want a little more rent but they’re willing to give you a longer term, or they’ll shorten up the term but give you a lower rent,” he added.

It's important to be realistic about what you can afford, Wiley said.

“You want to get it as low as possible and [the landlord] wants it as high as possible, but he also wants a good tenant that’s going to pay that rent," Wiley said.

“If he asks for $20,000 a month and nobody can pay it, what good is it doing?”

Don't settle for a lease that won’t give you enough time to build a name and turn a profit, Wiley said.

“I won’t sign a lease for less than 10 years,” he said. “I’ve heard of people doing five-year leases and you’re just not going to make the money.”

5. Good Bartenders Are More Important Than Good Drinks

The staff can make or break a bar, so choose wisely and pay well, Wiley said.

“When I have new hires, I always tell them ‘I’m more concerned with your friendliness than I am with how good your margarita is,'” Wiley said. “You can teach that, and plus a bad drink will taste better if it’s served with a smile.”

Another thing to consider is trust. Even with security cameras and managers, there are always opportunities for bar employees to steal from you, Wiley said, which is why he only hires people he knows or people who have been vouched for by colleagues or friends.

“I’ve been a bartender longer than I’ve been a bar owner,” Wiley said. “There are ways you can scam people, so I have to look at somebody and be able to trust them.”

Above all, keep your employees happy. It's good business, DiPietro said.

“Let them make their own mistakes and forgive them,” he said. “I’ve worked hard to keep the staff happy and comfortable. Good vibes will ooze out from behind the bar and affect the whole atmosphere.”

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