Startup costs for bars
Bar startup and operating costs are essential for any bar. There are many other factors you can consider as a business owner. These are some places you can start to plan for the future.
- Liquor licence: This license is a vital first step in opening a bar. Although the process and cost to obtain a liquor license vary from one state to another, you must prepare an application detailing your bar’s type, hours, how you operate, whether you make your alcohol and if customers can bring their alcohol. This process can take several weeks to complete, and the cost of the license may range from a few hundred to tens of thousands of dollars, depending on where you live. You might have to wait until there are enough liquor licenses available in certain areas.
- A business license is required by every state and certain cities to operate. This license certifies your establishment’s safety for the public. The cost of this license can range from $25 to several hundred. You can find a guide to state-by-state business licenses here.
- Foodservice licenses and live entertainment licenses Although not necessary for all bars, these tasks are important to start with if you plan to host food service or live entertainment in your bar. Costs and processes will vary depending on the state and city regulations.
Begin with the basics and move on to the more specific items that will enhance your bar’s atmosphere and style.
- Refrigeration While the type of refrigeration you choose will depend on your location’s capacity, most industrial fridges used in bars and restaurants cost less than $1,000.
- Glassware Prices are up to you. You can buy large quantities of inexpensive glasses, partner with a local business, and make custom glassware for your location.
- Furniture: Customers will likely need somewhere to sit or lean at their bar. This cost will vary depending on what type of bar you want. As you are looking to increase your staff, consider tables or high tops with QR codes so customers can order additional rounds.
Type of bar
You can choose the type of bar that you want to open. This will affect the space required and the cost of opening a bar. These are some bar options that you might consider:
A new bar: First, you need to decide whether you are starting a new bar or taking over an existing one. A new bar will likely have higher startup costs, but it will offer more flexibility to make your own space.
An established bar: If your goal is to get up and running with low startup costs quickly, you might consider a bar that was previously owned and operated. There are many ways you can make it yours.
Dive Bar: This well-known bar focuses on the basics and leaves out all the frills. This is where simplicity and authenticity are more important than fancy decor and expensive cocktails. A dive bar allows guests to relax and enjoy cheap drinks. Size and seating are the biggest expenses.
A sports bar is a great idea if you love large spaces with lots of TVs and tasty wings. These bars can be found in densely populated cities and are a great place for large groups to meet up to watch a match or hang out. Sports bars tend to serve beer as the main focus, although many offer liquor and wine. A sports bar often serves food. Owners of sports bars focus their spending on space, seating and entertainment factors such as TVs, dartboards, pool tables and TVs. Food prep is another important cost driver since sports bars are often busy during games.
Wine bar: An elegant establishment that offers a selection of wines and light appetizers to a smaller group. Wine bars are usually centred around the bar, which has limited seating. Your staff can be a significant expense because you have to hire wine specialists and sommeliers.
Cocktail bar These bars are well-known for their unique environment and talented mixologists, making them wildly popular. A small bar with quality liquor and interesting additives is essential for a cocktail bar. The intimate atmosphere created by the limited seating creates a feeling of exclusivity and intimacy. Cocktail bars only offer liquor and have a small wine selection. Although renting a smaller space may be advantageous, it is important to consider the interior design and the ingredients when setting the mood at a bar.
Nightclub: An establishment that offers nighttime entertainment such as live music, DJs and dancing. A larger space should be available that can accommodate more people. Owners of nightclubs spend a lot of money on lighting and decor and the number of employees required to operate them. A lounge is the most expensive to start up.
Bar costs will be affected by the number of employees you hire and what roles they fill.
The bar manager is the first thing you should think about. Bar owners often assume this role when they open their first bar. Some bar owners hire trusted staff to drive their success.
You want someone with experience in the restaurant business, especially the type of bar that you are looking to open. This will ensure that the bar manager knows how to buy stock and manage bar inventories.
The location of your bar will impact the kind of clients you get and the vibe you create. It can also affect the cost per square foot.
A few factors affect the cost of your area:
- Real estate around your location
- The foot traffic
- The space’s size
- It already has all the amenities you need
- What date was the last time this site was renovated?
Technology and the POS system
Technology that you use to open a bar will ultimately save time and help you create a seamless flow in your day.
Think about the time you waited at the bar to receive a payment. Customers can be frustrated by limited payment options, system glitches, or long processing times.
Your bar won’t attract customers without a solid marketing plan. However, it can be costly in the beginning. It is crucial to know which marketing channels you have — such as email, social media, and paid digital marketing — so that you can create a strategy that meets your needs.