financial costs of opening a tiki bar

hello tiki central,

long story short, I've recently returned to Ca (inland empire) to assist with aging/ailing parents after 2decades in the pacific nw. I grew up going to the tiki-ti and continued that love by frequenting hale pele up in the nw. Now that I'm back south, and unemployed for the first time ever... I'm realizing that I dont want to work for anyone else again. With that said, I've noticed an empty storefront in a couple of areas that could serve the tiki community well. If I were to consider opening a quality tiki bar, what ballpark of $$$ would I likely be looking at? Any help would be appreciated. thanks!!

I don't know anything about operating costs but I know that the Inland Empire (other that Palm Springs) is a Tiki wasteland. I am in Ontario (taking care of an aging aunt and uncle) several times a year. I'd stop by for a drink

I think your best bet might be purchasing an existing bar with a liquor license and converting it to a tiki bar, rather than starting from scratch. Search "bars for sale in [town/county]" and see what comes up. Location is going to make up a big part of your costs -- cheaper to open a bar in Calexico than Malibu.

[ Edited by arriano on 2023-11-08 15:28:17 ]

Arriano, what do you know about my neighboring city Calexico? LOL

Haha - I know from my oracle that Calexico, while more convenient to border access, is slightly cheaper property wise than Malibu. [end of knowledge]

[ Edited by arriano on 2023-11-09 08:07:28 ]

Caveat: I have never opened a bar, but I know people who have. A from-scratch liquor license is insanely expensive to obtain (states vary widely on this, but the one thing they all have in common is that it is expensive). That's why many bars open in spaces once occupied by failed bars--often the extant liquor license is tied to the space and is conferred with the lease. This website will be helpful with specifics:

https://www.abc.ca.gov/licensing/license-fees/

I listen to a great deal of bar/cocktail/industry podcasts and $60-$100K seems to be a common range for opening a regular bar. One group manage it for just $20K but they were opening a faux dive bar and were DIYing everything themselves. And that's for non-themed bars. Tiki is way more costly, with the price of lauhala, bamboo and thatch being the most basic expenses. Wooden carvings, masks, custom lights and fish floats aren't cheap. Jade tiles are even less cheap. That's why the maligned "tiki-lite" is so popular among bar groups with no real stake in tiki culture--they want to jump on the trend because "tiki is hot" but balk when they see the cost to do it right.

Time is also a major consideration that overlooked. Plan for a year between when you lease the space and open. That sounds crazy, I know. But you've got to pay rent on that space even if you're not open and that means hemorrhaging money the entire time. You're thinking, "That's crazy! I can be open within a couple months, max." Veteran bar owners never say that. The build-out will take at least triple the amount of time you allocate. Doesn't matter if you are investing sweat equity yourself or hiring contractors. Plumbing and electrical needs to be done by certified professionals. Then there are the inspections. I have a friend who is trying to open a new tiki bar in my town. He's DYIing most of it himself, with some assistance from the community. He wanted it opened by June. Delays blew past that date. The space has been essentially complete since September, but various inspections have required changes. And subsequent inspections have required different changes. It's maddening. And this guy had a business plan and strategy that was informed by others who'd opened tiki bars in the past.

I had another friend who intended to open a tiki bar in Austin. His group had financing in place and a crazy amount of furnishings and decor amassed in storage. They had swizzles produced and even a short run of custom mugs. The venture collapsed after several years of trying because they could not secure a space. Leases fell through on some, others they were outbid on. And again, these guys weren't novices--they had industry experience yet it all went for naught.

Adrian Eustaquio (PolynesianPop) had his own tiki bar in the works. He never spoke of it much but there were investors and they had a concept and a space. It was happening. Then negotiations broke down for the space they were trying to lease (that's my recollection, but I certainly have no deep insight). They lost that space and were dejected, starting over from square one. Then a couple weeks later COVID happened and everything shut down. Turns out they dodged a huge bullet on that one.

We all have fantasies about opening our own commercial tiki space. I'll admit I have toyed with the idea. But the best way to accomplish this is to start with a BIG pile of money and dependable income from another source. I'm not trying to discourage you, but opening any bar is not easy. Opening a tiki bar is exponentially more challenging. Good luck!

LOL

It almost seems like it would be cheaper to open an unlicensed bar and pay the fine.