How to Find Partners to Run a Bar
You have to decide to run a bar; you have to decide whether it’s worth it to you to share your dream to make it come true. Having a partner is like getting married. You must love (or at least like), trust, and respect each other, and be willing to compromise. If you can get away without having a partner, go for it!
A partner is an investor in your company who owns part of the company and assists in running it.
If you can’t stand the thought of sharing power and want to run your bar your way but still need financial backing, you can always find a couple of silent partners (investors who only supply money and have little say in the operations). When you pay investors back, they go away!
How to find potential business-partner candidates
If you decide you need to take on a partner, here are some places to start looking:
Consider looking to your family. Maybe Mom, Dad, Grandma, Granddad, sisters, brothers, or your rich Uncle Walter will be willing to back your business.
Adding the stress of borrowed money to already complicated relationships can be a recipe for disaster. Make sure you’re ready for the consequences of getting involved in business with your family. You don’t want to lose their support during what’s sure to be a tense time in your life.
Look to friends with knowledge and interest in the industry. If you’ve worked with them before, you may already know their philosophies and work ethic. If they match your own, you could do well together.
Consider a former employer. If you have a great working relationship with a bar owner you worked for, he may be interested in helping you get started with your own place.
Too many partners lead to too many bosses and, inevitably, to failure! Five partners often means they bring five spouses, and now you have ten opinions and suggestions. It could get tough.
How to establish terms you can live with
Most people make investments to gain a return on their investment: They expect your business to make money. You must set up a written agreement for when and how your investors will recoup their investment with you.
There’s no right or wrong way to pay back every investor. Most people have specific things they want. Both sides have to compromise to reach an agreement you can both live with. And the sooner you pay them back, the sooner you get to keep all the financial rewards and lose the headache of answering to partners.
Here are some things to consider when you’re figuring out how you want to structure your arrangements:
What rights do partners have? You should figure out who’s responsible for what tasks or areas of the restaurant, who makes which decisions, and who reports to whom.
Who owns how much? Make sure you identify who owns how much, no matter what the contribution, including money, time, or both. Spell out the details of your arrangement clearly so that no one has any confusion.
Who gets a salary? Spell out who gets a salary and when it starts. Often, as you’re building a business, the owners take a small salary (or sometimes no salary) until the business has the money to spare. Make sure that you resolve all financial issues clearly and to the satisfaction of all parties involved.
How long will it take to repay any loans? Create a written plan to return loans to investors. Be sure to include details about any interest they’re entitled to.
Which partners are silent? Everyone has an opinion, and you must clarify how your decisions will ultimately get made. Your first line of defense is to discuss, persuade, and then compromise. But the occasion will arise that requires one person’s opinion to win the day. Write down who has final say in these situations before you start your business.
What happens if someone wants to get out or someone dies? Make sure that you have an exit procedure outlined in your agreement. Usually, one partner can buy the other out, either in a lump-sum payment (all the cash handed over at once) or over time.
Do not give the place away when looking for partners. Create relationships you can live with.
Make sure your lawyer reads every sentence in all agreements, and make sure you know what you’re signing. Don’t let your dream become a nightmare by agreeing to terms and conditions you can’t live with.