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Guide on How To Open a Bar

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Josh Reynolds

Published on June 4, 2024

Guide on How to Open a Bar

Want to open a bar? Get ready for an exciting, challenging, and rewarding road. You’ll be creating a space where people can unwind, socialize, and have a great time, and while it can be tough at first, it’s worth it. Running a bar gives you the chance to work in a lively environment, meet new people, and be part of your local community's nightlife. Plus, bars can be seriously profitable — often more so than restaurants. This guide will show you how to open a bar, from planning to pulling the trigger.

How To Open a Bar: Making Your Business Plan

A strong business plan is your path to success as a bar owner. This plan helps you outline your vision and strategy, making sure you're ready for each step. Your business plan should include a clear mission statement that defines your bar's purpose and values. To build this statement, run a competitive analysis to understand your market and what will make your bar stand out. 

When planning, financial projections are key — they help you plan your budget, estimate startup costs, and predict future revenue. A small business loan can be essential for covering these initial costs and making sure that you have enough capital to get started.

Start a Bar Business: Choosing Your Structure

Picking the right business structure is a big decision because it affects your legal and financial responsibilities as a bar owner. Common options include sole proprietorship, partnership, LLC, and corporation. Each has its own pros and cons. For example, a sole proprietorship is easy to set up, but it doesn’t protect your personal assets. An LLC or corporation offers liability protection but can be more complicated to manage. 

As a new business owner, it’s a good idea to talk to a legal professional to help you decide the best structure for your bar. That way, you’ll have expert guidance that can shape the future of your business venture.

Secure Funding and Loans

Next on the opening a bar checklist is funding. Running a bar takes a lot of money — you need capital for renovations, equipment, inventory, and initial operating costs. There are several ways to get the funds you need, including personal savings, bank loans, investors, and small business loans. Keeping a solid credit score is key because it affects your ability to get loans and good interest rates.

What Licenses Do You Need To Open a Bar?

Knowing how to open a bar starts with getting acquainted with the industry’s regulations. You’ll typically need a liquor license, a food service permit if you plan to serve food, and possibly a music license if you’ll have live performances or play recorded music — which you almost definitely will want to do to create the right ambiance. The process for getting these licenses can take time and varies by location, so start early!

Choose the Ideal Bar Location 

Picking the right spot is key when you start a bar business. Think about factors like foot traffic, your target customers, rent costs, and zoning rules. A spot with lots of foot traffic and easy access will draw more customers in. 

A real estate agent who knows commercial properties can help you find the best location. Make sure there's enough parking and that the area fits your bar’s style and audience.

Design the Interior and Atmosphere