I’m an entrepreneur who’s started (and failed) a shit load of businesses over the years. As an entrepreneur my mind is always thinking about new business ideas, especially since moving out here to Asia.
While traveling through developing countries it’s not hard to think of ideas… What doe’s this city need that I can provide? Can I import something? Export something? Provide a service that doesn’t already exist? Can I take an existing idea and do it better? The possibilities are endless.
One idea that always ends up on the expats list is “open a bar.” Hell I’m guilty of this as well. I always think to myself, hey I like hot chicks and cold beer! I’ll open a club! How hard could it be?
Rent a cheap space in the tourist trap. Put some chairs, TVs, music equipment. Hire pretty girls to serve cheap drinks.
Party and hang out with cool people all night. Then fuck my pretty waitresses bare back on a pile of cash every night. Life is good! 😀
Well, the reality of owning a bar is very different. Here’s five reasons why opening a bar is a horrible idea.
#1. Owning a bar is a job.
This is a business that demands your attention full time. You can forget about traveling and spending the weekend on the beach.
The fact is running a bar is extremely time consuming. Someone has to be there to manage the place. So that means you or someone you trust.
So that’s the dilemma… Who do you trust enough to leave a big pile of money laying around and be confident it will be sitting there untouched when you return? If you have a person in mind then good for you… I don’t.
Chances are, if you own a small bar you will have to be there 24/7 to make sure it’s running properly. Then you will keep whatever cash is left over after payroll and expenses. In a small bar this will be shit money…
I guess everyone has a different idea about what is a good salary… What do you think you should be paid for working 80+ hours per week? The answer is easy for me…
I would never work that much. I’d rather scrape together a few grand a month online while I do whatever I want all day.
#2. You have to deal with people.
OK maybe you’re an outgoing guy who loves chatting with tourists and making new friends. That’s great! You can still go out drinking and hang out with people without owning a bar.
If you run a bar you will have to manage the staff. I owned several businesses before and let me tell you, managing employees is a pain in the ass.
The fact is, nobody gives a shit about your business as much as you do. They just want to get paid their salary and go home. Most employees do just enough work to not get fired.
It’s extremely hard to find good employees who are willing to put in the extra effort to help you grow your business. It’s you that is up late at night worrying about paying the bills.
Now consider who are going to be your employees… Will they be uneducated twenty year old girls from some rice farm who are willing to work for $200 per month salary???
Yes I’m sure they will be on time for work every day without causing any drama or headaches… Good luck with that. I’m not even going to touch on the cultural differences between you and your employees…
Now consider who will be your customers… Backpackers who puke all over your floors and overdose on heroin in your bathroom? Crazy drunken thugs who want to break your bar to pieces and practice their Muay Thai skills on your other customers?
Managing a bar is often like babysitting adults… Both the staff and the customers. If someone is loud, annoying or dangerous at a bar I can just walk away… Not my problem! You don’t have this option if you are running the show.
Then there are other issues with crime… My friend owns a popular night club in America and there was a shooting outside… Some guy got killed and the police shut his club down.
The incident had nothing to do with his business but since they were outside in the parking lot his club was in the headlines next to MURDER. That’s bad for business.
Bars and nightclubs attract drama. These types of situations rarely happen at a coffee shop in the morning.
#3. Brick and mortar businesses don’t scale.
Brick and mortar businesses suck. The reason they suck is because they don’t scale. By scale, I mean you can’t grow them exponentially. They are “slowlane.” I highly recommend you all read The Millionaire Fastlane by MJ DeMarco for more info on starting the right kind of business.
Whether you own a bar, a barber shop, a massage parlor or a sandwich shop, it’s all the same shit… No scale. Your bar can only do business on a local level.
Meaning, a bar in Phnom Penh can’t sell a beer to some guy in New York City unless he travels to Cambodia, walks down your street and decides to step inside for a drink.
It’s the same with a barbershop. Can a barber have 1,000,000 customers in one month? I doubt it… Even if he’s the best in town his customer base is limited to whoever happens to be walking past his shop and how many customers he can handle in a day. Then he will be trading his time for money by working his ass off every waking moment.
The exception to this is franchising a brick and mortar business. This is a great way to scale but it’s difficult to use this business model with a random small bar. You need to have a unique idea and really run with it.
I don’t think all brick and mortar businesses are bad. If you don’t care about getting rich and you just want a place to hang out all day then go for it. Just understand that most brick and mortar businesses are nothing more then a job with shitty pay and extra stress and liability. Even if you decided a brick and mortar business is for you I believe there are better options then a bar.
I’ve decided I will never do business on a local level here in Asia. Fuck that! I’ve heard too many horror stories from business owners first hand. Corruption and bribes are a part of doing business out here and people always have their hands out…
Then god forbid you are actually successful and people find out… Rent increases, bribes go up and your competition wants you out of town… It’s an uphill battle for foreigners opening a business out here.
It can be done… I’m not one of these negative people who shits on peoples dreams. Just understand what you are getting into if you’re considering this.
#5. Running a bar is an unhealthy lifestyle.
Do you really want to hang out in a bar all day and night? Not me. Sure I love to party and drink but I also take weeks off at a time. It’s nice to have that option.
My friend owns a very successful nightclub in America. I don’t remember ever being there without seeing him. He’s ALWAYS there walking around, talking to staff, chatting with customers… He’s not mopping floors and serving drinks but he’s watching the people that do like a hawk.
You have to spend time in the business or your staff will get sloppy. You know how it goes… Security let’s all his friends in for free. A bartender sees a group of her friends and pours a round of free shots…
There’s fifty dollars that just came out of YOUR pocket. Now imagine this happens several times every night. Your staff doesn’t care about your bottom line and little things like this will make your business hemorrhage money each month.
I can’t imagine anything that’s worse for your health then hanging out in a bar every night. Loud music, second hand smoke, drinking every night. Going to bed at dawn and sleeping until 3:00PM. That lifestyle would age you quick… And forget about having a social life outside of the bar.
A bar can be a fun and profitable business but it’s not for me. I’d rather just enjoy the bars as a customer and not have to worry about the daily grind of running the business.
Buying a bar is an idea that pops into every mans head while traveling through Asia. My advice is be more creative. Offer a different kind of product or service to tourists coming to this region. Think outside of the box. Cambodia doesn’t need any more shabby ass little bars selling 50 cent pints of warm Angkor beer.
Start a Business Online.
You best option is to do business online. Find a product you can ship. Think of a service you can provide. Teach someone a new skill. Entertain people. Start providing value to the world. What can you help someone with???
The internet is wide open for anyone to make money and the opportunities are endless. You can start a website for free. You can market it for free by writing, shooting youtube videos, doing podcasts, using social media.
Now for an example, what if you wrote an eBook and sold it online? Could 10,000 people purchase it this month? Of course it’s possible.
They can purchase it while you are sleeping, traveling, working out or spending time with loved ones.
You would have no staff to manage, no rent and utilities to pay, no corrupt officials to bribe, no bar room brawls with drunken backpackers. You are free to travel as you please and you answer to no one. That sounds pretty good doesn’t it?
I have some more information about making money online coming soon. Please subscribe for updates if you haven’t already!