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If you’ve ever spent an evening at a fun local bar, you may have wondered if you could run your own drinking establishment and be successful. With that being said, if you think you might take that idea and make it a reality, now you’re probably wondering how to open a bar in your neighborhood.
How To Start Up A Bar Business
When it comes down to it, opening a bar is a lot like starting a small business of any kind—with the added aspect, of course, of serving alcohol to customers.
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Additionally, it’s important to note that bars require round-the-clock maintenance, require significant capital to get started, and are not recession-proof. Therefore, you will want to make sure that you put in the time and effort required for strategic planning in order to successfully open your own bar.
A business plan is an important document for any type of small business. When learning how to open a bar, it’s practically a requirement.
In short, your business plan is a written plan that guides you from inception to success and will cover your company’s value proposition, location and team, the industry you are entering, your legal structure, products and services, how you plan to market yourself, financial projections and any other additional information that will guide you towards long-term growth and profitability.
Overall, this plan will help guide each of the other steps needed to open a bar—so you can refer back to it often and tweak it as needed as your plans change or pivot.
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Plus, you’ll not only use your business plan as a roadmap for long-term success, but also to attract investors and financiers, and to explain your concept to potential partners.
Use our guide to writing a restaurant business plan for more insight into creating a business plan for this specific type of industry.
As with any small business, choosing your business location is integral to your short- and long-term success. If you want to be a neighborhood bar, you better know the people you serve.
During the planning phase, you might consider contacting your local chamber of commerce to get information about your target market. Do you cater to students, blue-collar workers, the artsy crowd, or conservative suburbs?
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You may choose to work with a real estate agent who is familiar with the area and can help you find the best location at the most affordable price. Since renting or buying your storefront will be one of the biggest costs associated with opening a bar, you’ll want to make sure your real estate agent has experience working with tenants and can help you navigate the leasing process.
You cannot run a business without proper registration. The requirements to register your local depends on the city and state where your business operates. As with starting any new business, however, you’ll want to obtain an employer identification number for tax filing and register your business with local authorities.
You will also need to select an appropriate business entity type. The four most popular types of entities or legal structures are:
While sole proprietorships or general partnerships are the easiest entities to form, they offer no personal liability protection—meaning that if someone sues your business, your personal assets could be seized. Because bars tend to have greater legal risks than other businesses, you should consider forming an LLC or corporation. A business attorney who is experienced in the industry can help you make the best decision for your bar.
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Your business name should be memorable, represent your business in some way, and most importantly, not already registered by a competitor. You can check if your business name is already taken by checking your Secretary of State’s website.
You will also want to ensure that if you are making a business website, the domain name is not already taken. If you plan to advertise your business on social media sites, checking out platforms like Facebook and Instagram is also essential.
When learning how to open a bar, business owners often forget about the issues that come with permits and licenses – make no mistake – alcohol is a heavily regulated business.
First, you’ll need a license from the Alcohol and Tobacco Trade Bureau, or TTB, the entity responsible for enforcing the laws “to regulate the manufacture, importation and wholesale businesses of alcohol; tobacco production and import businesses; and alcohol labeling and advertising”. This process will take six to 12 months to complete. The TTB will need to inspect your business and conduct background checks on directors, officers and owners.
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Next, you’ll need to obtain state and local liquor licenses. If you plan to serve food, you will also need a permit from the food vendor.
Once you’ve obtained the necessary business licenses and permits, you’ll want to make sure your bar is up to code because food and liquor businesses are often subject to inspection.
Satisfying patrons can either make or break your business. That’s why it’s absolutely essential to find good suppliers for your bar.
When looking for quality suppliers, we suggest connecting with your neighboring bar owners and seeing if they can refer you to their vendors. We also recommend making a list of all the supplies you want and creating a business budget for them.
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Once you’ve checked them out, you can start shopping around. Online suppliers are also another worthwhile option as they usually have discounts, but beware – not all of them are as reliable as others. Here are a few things you should know about a supplier before working with them:
Remember, the supplier needs to be willing to work with you and understand exactly what your business needs. If you have a bad experience with a seller, don’t be afraid to look for a new supplier.
From furniture to sales software, insurance to licenses, starting your business requires thinking about getting financing for your bar.
The average cost to open a bar varies greatly depending on your location, but typically ranges from $110,000 to over $500,000. A cheaper option is buying an existing bar or opening a specialty bar (like a winery or micropub), although it can still cost you around $25,000 to get started.
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Plus, once your bar is up and running, you’ll still have significant ongoing costs for payroll, inventory, rent, insurance, and more.
So if you’re wondering how to open a bar with no money – or even if you have some start-up capital – you’ll need to consider financing options for your venture.
A good place to start is with a business credit card, which can help you cover the cost of small to medium-sized purchases while also helping you earn rewards points.
Additionally, you may want to look into business start-up loans, short-term loans, and other forms of business financing from either your local bank or an online lender. Whatever expenses you incur and your ability to pay them back should be covered in your business plan.
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Given the importance of this step, you’ll want to take plenty of time to figure out what your startup costs look like and what type of financing will work best for your bar.
The bar is meant to be a welcoming space for people who want to relax or hang out with friends. Therefore, the same principles of restaurant design can be applied to bars.
You’ll want to think about the atmosphere and how to use the space efficiently. You can set the tone of the bar by playing with lighting and choosing fixtures that set your bar apart from all the others. You’ll also want to pay close attention to how you design your bar stations; you may want to use several registers so bartenders don’t get in the way of each other calling customers.
Another major part of bar design is the top bars, which can be considered the centerpiece of your bar. Bartops are usually made of glass, stone or wooden materials, but keep in mind that each material has its own disadvantages and advantages.
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Ask any business owner in the bar and restaurant industry: Competition is fierce. People are always looking for the latest and greatest places to eat and drink.
As a bar owner, you need to develop strong marketing strategies if you want your business to last. To bring in new and repeat customers, you need to present your bar in the best possible light.
This includes encouraging customers to write honest reviews on sites like Yelp, investing in high-quality photos to showcase your drinks, and building a stunning website.
Although there are various options when it comes to POS systems for bars or restaurants, the right POS system should (at
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