People think opening a bar or restaurant is easy. They drive by, see a packed house, and assume it’s a license to print money. They look at the crowd, the drinks flowing, the music blasting, and think, “These guys are killing it.”
What they don’t see are the bills stacked higher than the bar tabs; the payroll bleeding out the back door; the food costs chewing margins down to dust. They see the two golden hours on a Friday night, not the dead Tuesdays where the only sound is an ice machine humming. They see three nights slammed, not the other four when you’re praying for bodies in seats.
From the sidewalk it looks like a cash machine. But from the inside it’s a slow bleed, a grind that eats savings, time, and sanity. That illusion is why so many people throw themselves into this business with blind optimism. And it’s why most of them end up broke, bitter, and wondering what the hell just happened.
We’ve been on both sides of it. With decades in the business, we’ve lived it, consulted on it, and yeah, even been dragged onto good and bad reality shows. Those shows mostly suck, but here’s the kicker: the only thing they actually get right is the obvious waste and the obvious neglect. Everything else is manufactured drama. But the busted ice machines, clueless owners, and cash hemorrhaging night after night? That part is all too real.
The key to everything comes in “the why”. Oftentimes “the why” starts with a lie, not a malicious bad intentioned lie, a different type of lie. And it makes all the difference in whether or not a bar will succeed.
The Lies People Tell Themselves
Lie #1: “It’s simple.”
Math is math, right? Buy a beer for $2, sell it for $7. A burger patty costs $2.50, the bun another $0.50, toppings maybe $0.25. You flip it for $12. Easy money.
Except it isn’t. That’s arithmetic, not business.
What gets left out of that cute little equation is logistics, labor, rent, insurance, utilities, marketing, broken equipment, credit card fees, taxes. It doesn’t account for the time you spend chasing down an invoice because your vendor “forgot” to deliver lettuce, or babysitting a manager who calls in sick the second the patio fills up.
The beer math looks sexy until you realize your payroll for the week is 30 percent higher than expected because of overtime. The burger looks profitable until you factor in waste, spoilage, and the fact that half your staff likes to “taste” fries during prep.
Owning a bar isn’t buying low and selling high. It’s managing chaos. Every night is a Broadway show, and the curtain goes up whether you’re ready or not. Guests don’t care that your fryer exploded or the dishwasher quit. They just want the burger hot, the beer cold, and the lights working. And if you can’t deliver that, the math doesn’t matter.
Lie #2: “I was born for this.”
Translation: I love to eat, drink, and host. I love being the life of the party. No — you want to be the cool kid. You want the status that comes with owning a place people talk about. And status-seekers are the first to get crushed.
Real operators don’t fall for that illusion. They invest in hotels, arenas, casinos — places where scale and predictability protect the margins. Bars and restaurants? They’re vanity projects dressed up as investments, and the industry eats those alive.
The Weight of the Lift
Here’s what dreamers don’t get: the lift required to succeed in hospitality is heavier than almost any other business.
Yes, profit margins can run between 5–25 percent. But most sit-down restaurants are scraping at 3–6 percent net. And most owners can’t even answer two questions before signing a million-dollar loan:
How much money do you actually want to make?
Would you still open this place if you never set foot in it? If it made money but you couldn’t show it off, would you still care? Nobody gloats over their dentist’s office — they just cash the checks. Bars only make sense if it’s business, not vanity. Most people just shrug, and that shrug costs them everything.
The “stats” you see about restaurant failure — on TV, in blogs, in articles — are garbage. They swing depending on the economy, the market, and whose intentions are aligned with the larger goal. What matters isn’t the numbers, it’s the why.
The Endless Show
One of the hardest truths about this business is that you’re only as good as your last show.
Look at Broadway. No matter what happens — an actor gets sick, a light rig fails — the show goes on. There are backups for backups. There’s no room for apology, because every audience is brand new.
Hospitality is the same. Every night is opening night. The curtains rise, and you’re on. Food has to be prepared. Drinks have to be poured. Service has to hit. Guests don’t care if your dishwasher quit, or the fryer died, or your bartender is hungover. They came for the show, and if you can’t deliver, they won’t come back.
Opening a place isn't a success. Surviving the run is, and most people never grasp that.
Why You Should Run a Subway Franchise Before a Bar
If you want to learn business fundamentals, don’t start with a bar or restaurant. Start with a franchise.
Go buy a Subway for $150,000. It’s paint-by-numbers: the SOP is handed to you, the marketing is built in. It’s a basic menu that doesn’t change. You’ll still get screamed at because the bread isn’t baked right or the sandwich doesn’t look like the picture. And you’ll still feel the pressure of payroll, labor, and consistency.
Multiply that stress by a 10-page menu, 200 seats, and marketing that depends on you. That’s a restaurant. That’s a bar. And if you can't handle a Subway, you’ll never survive it.
Ego vs. Ecosystem
The harshest failures are vanity projects. The names on the door — “Mike’s Tavern,” “Gigi’s Place” — say it all. These owners didn’t build a business; they built a monument to themselves. And the market burns them for it.
Hospitality isn’t about you. It’s about humility and gratitude. Gratitude that a guest chose to spend their money with you. Humility that they could’ve gone anywhere else. Forget that, and you’re finished.
Even industry vets who take the leap to open their own spot — the chefs, bartenders, managers — often fail because they only know one slice of the ecosystem. A chef might own the back-of-house but ignore the front. A bartender might know spirits but not spreadsheets. This is a system. If you don’t understand every piece — or partner with people who do — the house collapses.
Passion is important, but passion is gasoline. It can inspire staff, but without knowledge and discipline, it burns the place down.
The Financial Gut Punch
Let’s strip the fantasy away.
Most new owners expect 15–20 percent net profit. The reality: 3–6 percent. Landlords don’t care that it rained for two weeks and your patio sat empty. Payroll doesn’t care that your AC blew out. Bills don’t stop.
We’ve watched owners go months without paying themselves just to cover their team. Investors? Half of them know they’ll lose their money and treat it like a vanity play. The other half demand six-month paybacks and first rights on future outlets. Both end up miserable.
Why Some Still Win
Yes, people succeed. Danny Meyer opened Union Square Café without restaurant experience. Nick Kokonas came from derivatives trading and partnered into Alinea. Steve Ells launched Chipotle with culinary training but no operational background.
What did they share?
Humility: knowing what they didn’t know.
Preparation: respecting every position and learning every job. (At TGI Fridays, new managers once had to work every single role before running the floor — that’s real prep.)
Partnership: surrounding themselves with people who filled their blind spots.
That’s what separated them from the masses.
This brings us back to “the why.” This is one of the first items successful operators tackle: why you should get into the business, and what you're looking to achieve.
In an episode of “Invest Like the Best,” Danny Meyer said, “I was more interested in turning those into your favorite restaurant. And in order to make it your favorite restaurant, we not only had to be really good at what we did, but we had to be even better at how we made you feel. We had to make you feel like we were on your side, which is hospitality.”
That was his why, and it was clear. Obviously making money was vital, but everything started with a clear directive and then the why dictated the how.
Get past the ego and the superficial aspect of everything and find your why, and if that why is “I like to eat out,” just know that you’re not setting yourself up for success. But if the why has meaning, purpose, and comes from a true place you can succeed — even if it’s to make money — that why will dictate the how, and so long as all that is clear, you can succeed.
Hospitality is brutal, but it’s not impossible. Chase ego and you’ll get crushed. Chase status and you’ll get humiliated.
But here’s the catch: unless you admit that the animal of ego and vanity lives in all of us, you’ll never be free of it. It’s all hierarchy. Maybe that hunger comes from skipping the traditional college route, or maybe it’s just the need to belong to something bigger. Either way, status is in the bloodstream of this industry.
And you know what? That’s not a crime. Jean-Georges loves the applause. Thomas Keller takes the praise. Gordon Ramsay thrives on the spotlight. Even your neighborhood bar owner lives for the moment the regulars say, “This place is special.” We all want it. We all take the high.
The danger is getting stuck there.
Admit the vanity, own it, then move past it. That’s when you can finally lock in on the real work of being of service, creating escapism, and building nights people remember because they felt alive, seen, and valued.
Do that, and your brand becomes bigger than your ego. Bigger than you. That’s the only game worth playing. Everything else? Just noise. And noise won’t keep the lights on.