Starting a bar in just 9 easy steps
Have you ever considered starting a bar? You could play your favourite songs, serve your preferred drinks and host gatherings with guests and friends.
Starting a bar can be a rewarding and exciting adventure, but it can also be challenging. Even experienced entrepreneurs don’t know how to open a bar successfully. Some people try to do this without doing enough research first, which can cause a lot of unnecessary stress and risk.
But those who take their time and consider the smaller details not only achieve their goal but can also earn a stable income and contribute to their local community.
To help you navigate the process, we've put together a checklist for opening a bar in nine easy steps:
Table of Contents
- Step 1: Write your bar’s business plan
- Step 2: Get bar financing
- Step 3: Find the perfect location
- Step 4: Obtain the right licenses
- Step 5: Design your bar’s layout
- Step 6: Invest in bar equipment
- Step 7: Buy a bar Point-of-Sale (POS) System
- Step 8: Hire experienced staff
- Step 9: Have a soft opening
Step 1: Write your bar’s business plan
The first step to starting a bar is developing a bar business plan. This is a document explaining your goals, marketing strategies and financial projections. Writing a business plan for a bar is essential for securing financing, attracting investors and guiding your decisions as you start and grow your business.
Use the bar business plan template below to ensure you have everything you need:
- Your bar's concept and theme
- A carefully chosen business name
- Your target market and ideal customer
- Your location and competitive landscape
- Your bar’s menu and pricing strategy
- Branding and marketing plans
- Staffing and organisational structure
- A budget and financial projections
You’ll need to do thorough research before finalising your official business plan. A good business plan should be detailed and specific, and show a high chance of being profitable. The better your plan, the more likely your bar will be successful. You may want to seek advice from a mentor or consultant with bar industry experience.
Step 2: Get bar financing
Once you have a firm business plan, the next step is to secure bar financing. Depending on your budget and goals, you could finance your bar through personal savings, loans from family and friends, or formal business loans from banks or other lenders.
Begin by estimating your startup costs, including equipment, inventory and licensing. Add ongoing expenses, such as rent, utilities and staff wages. Compare these totals to your revenue estimations to confirm if your business plan makes sense.
It’s not uncommon to need a loan to get started. If you don’t know how to get a loan for a bar, it’s almost the same as any other loan.
Your lender will consider your personal credit history and current financial standing. You’ll want to present a good financial plan that shows you can repay any loans or debt. Include your business budget and cash flow estimations. Even if your finances aren’t perfect, offering collateral or securing a co-signer may get you approved.
Shop around and compare rates and terms between different options before taking out a loan.
Step 3: Find the perfect location
The location of your bar can mean success or failure, so it's important to choose wisely. Consider factors like parking, foot traffic, curb visibility and nearby competition. Think about your target market and where they’re most likely to spend time.
To find the perfect bar location, start with a budget of what you can afford in rent and renovations. Big spaces are nice but typically come with more costs. Check your local zoning laws to make sure starting a bar in your chosen area is allowed.
Thinking about these factors is called a location analysis and takes quite a bit of research. You may want to work with a commercial real estate agent to make location hunting easier. Experts with experience in the bar industry can do most of the analysis work for you.
Step 4: Obtain the right licenses
Selling alcohol comes with more restrictions than most other businesses. Before you can open your bar, you'll need to obtain the necessary licenses from your local government. These may include a bar license, a liquor license, a food service permit and a bar tending license. Bar license requirements are very specific to local laws, so research them carefully.
Once you know exactly which licenses and permits you need, look up their fees, application processes, regulations and restrictions, and consequences for non-compliance.
Most regions take alcohol sales seriously. Not following their rules can result in fines, penalties, or even losing your bar. So, make sure you have met all the requirements.
Step 5: Design your bar’s layout
Your bar design and layout can have a big influence on your efficiency, customer experience and profitability.
Consider seating capacity and traffic flow when arranging your furniture and kitchen set-up. The size and shape of your location will affect which bar layout works best for you.
Think about your target audience and the ambience you want to create. Your lighting and decorations should match the theme of your bar.
If you need assistance, hiring a professional designer or architect will help create an appealing and functional design. A kitchen specialist who specialises in bar layouts will also be useful in making sure your staff have enough room to move and that the design is optimised for speed and efficiency.
Step 6: Invest in bar equipment
Once you have a layout and design for your bar, it's time to start buying your professional kitchen equipment.
Here’s a list of some items you’ll need to get started:
- Seating: stools, tables and chairs
- Bar appliances: , , ,
- Glassware: beer glasses, wine and cocktail glasses, shot glasses, as well as others for non-alcoholic drinks
- General bar equipment: bottle openers, wine openers, ice scoops, shakers and mixing tools
- Sound system: music is essential to the bar experience so make sure you invest in good quality sound
- Cleaning supplies: mops, brooms, cleaning trolleys, sponges and detergents
Getting newfrom a reliable supplier is a smart investment if your budget allows it. New equipment is more likely to have energy-saving technology, technical support and informational resources to help you get the best results.
Well-designed equipment can help reduce manual labour and speed up your kitchen and bar service. Purchasing new equipment also offers a lot of variety in terms of size and functions so you can get the exact appliance that fits your kitchen needs.
Although most people prefer to buy new appliances, if your budget is limited, you can find used bar equipment for sale at a great discount.mean that they have been slightly used, or are possibly a return from a previous customer. Show models are sometimes used in showrooms to showcase functions. Returns could mean that the packaging was damaged during transport, but the machine itself has never been used.
These appliances are usually thoroughly tested before they’re offered for sale. Because they aren’t “brand new”, they are sold at a reduced cost. They are often still covered by a company’s warranty. This is a good way to find high-quality brands at a lower price so you can reduce your start-up costs.
Step 7: Buy a bar Point-of-Sale (POS) System
Finding the best point-of-sale system for a bar that suits your needs will improve your efficiency and profitability. POS systems can manage your sales but also help with stock management and employee timekeeping.
At a minimum, you’ll want your system to track inventory, manage bar tabs and process orders. Depending on your bar layout, you may also need something mobile, like a tablet-based system that servers can carry around.
When choosing a bar POS system, consider the following:
- Cost and ongoing fees
- Hardware and software compatibility
- Features and functionality
- Availability of customer support and training
There are many options out there, so shop around to find one that best matches your bar’s needs. Some of today’s top Point of Sale systems for bars include Lightspeed Restaurant, TouchBistro and Square for Restaurants.
Step 8: Hire experienced staff
Your staff are the first people your bar visitors meet and impact the customer experience. Think about the roles and responsibilities needed to run your bar. Will you need bartenders, servers, cooks and managers and how many?
Plan bar staffing for both a “minimum” and an “ideal” staff roster. As your needs grow and you begin to make a profit, you can hire more people until you meet your ideal. Look up the standard wages and benefits for each role in your area to plan what you can afford.
Consider your local labour laws. Most bars stay open much later than other establishments, so ensure you have coverage for all hours you intend to operate. You need to know local legal restrictions about how long and often employees can work shifts.
Look at experience, availability and personality, when making final hiring decisions. Any customer-facing staff needs to be friendly and have strong communication skills. Employees who will be responsible for serving alcohol should have their bartending license as well as experience.
Check your candidates’ professional histories. Do they have experience working in bars or similar environments? Employees with customer service experience will know how to handle difficult customers effectively. More experienced staff also come with a wealth of knowledge and require less training.
Only hire staff that can prove they are trustworthy. Since bars entail access to lots of alcohol and cash transactions, it is wise to complete background and even legal checks before offering positions.
Try to create a welcoming workplace culture that values teamwork, communication and professionalism. Lead with respect, and your employees will return it.
Step 9: Have a soft opening
Before officially opening your bar to the public, it's a good idea to check how people will react to your business. A soft opening helps fix any big problems before you officially launch.
What is a soft opening? A soft opening (meaning a limited-time event) serves as a practise run before your grand opening. Soft openings help test your operations, collect customer feedback, and give you time to make any necessary adjustments.
You’ll want to market and promote your soft opening to build excitement and get a big turnout to put your bar to the test. You don’t have to offer your entire menu. Many bars only have signature cocktails and food during their soft openings.
What’s more important is the feedback and data you collect, so make it easy for your customers to share their opinions. Use what you learn to get everything in order before your grand opening.
Starting a bar can be a challenging business venture, just like any hospitality business. But also offers many rewards to those who succeed. Bar profit margins can be very high, and you’ll get to network with many different people. Follow the above nine steps to set yourself up for success and enjoy building a bar that’s both profitable and enjoyable.