How Much Does It Cost to Open a Bar?
So you want to open a bar? Before you dive in, let's talk about economics. What factors affect the cost and how to maximize your initial investment.
I think we have all had those daydreams of owning a bar. The quintessential neighborhood bar. The fanciest cocktails in the city. Award-winning service and a soundtrack that you control.
The bar industry seems dreamy in many ways… or does it?
Before you run into opening an establishment of your own, there are many things to think about. The cost should be a top priority. How much does it really cost to open a bar?
Unfortunately, I can’t give you an exact breakdown of costs. But I can give you the industry average cost where possible and a list of considerations that need to go in your itemized budget.
Note: this article is about your initial costs to start a bar from scratch. This isn't a deep dive into operating costs or ongoing costs. Your bar business plan should account for the average startup costs you expect to spend. Then it should detail staff salaries, bar inventory and unexpected expenses.
Here’s What We’ll Cover:
Bar Startup Costs to Consider
Ah licensing! The bureaucracy involved with opening a bar is enough to make anyone run away. It is very fun to make a Pinterest board for your gastropub decor. Filling out heaps of paperwork is not so fun.
Licensing is broken down into two camps. Business licensing and bar-specific licensing.
- Business Licensing
- Business License
A business license is a permit issued by the government. It allows your company to legally conduct business in a specific geographical jurisdiction. The registration fee is only $50. The filing fee depends on your expected revenue as a business. It ranges between $25-500.
Your insurance premium is widely variable on location and expected turnover.
- Business License
- Bar-Specific Licensing
- Liquor License
This is the big one! There is no bar without alcohol. Well…there is. It’s called a smoothie bar. If you want to sell hard liquor you need a liquor license. The bad news is that this can be one of the most expensive costs you have. It depends on the extent of your liquor sales. A beer and wine license can be as little as $3000. It’s not unheard of for a full liquor license to cost $12,000-400,000. Crazy right?
It varies from state to state. Speak to local bars in the area to get the full truth.
- Food and Victualing License
If you intend to serve food, you’ll need the appropriate licensing from your local government. Again, it varies widely from state to state.
- Entertainment License
Want a television for your sports bar? Or a band for your speakeasy? Or even the radio (remember those)?
You’ll need an entertainment license. Costs depend on the type of entertainment you want to offer. Live music is treated differently from background music.
- Liquor License
Real estate will likely be your largest expense. The perfect location for your bar is so important. Where is the best footfall? What neighborhood do you want to locate your bar in? Who are your likely customers? How much are they likely to spend?
It’s difficult to say what a good bar location could cost you. It all depends on what a good bar location means to you!
Bar Equipment and Furniture
After you find the perfect location, you need all the trimmings.
- Bar seating
- Tap beer
- So much glassware
- Restaurant POS systems (Point of Sale)
- Kitchen and bar appliances
- Entertainment systems like televisions and vending machines
- Security systems
- Bar decor and construction costs
- Alcohol and food cost
Of course, the number of things you will need to make your bar your own depends on the type of bar. Is it a sports bar? Is it a gastropub? Is it a speakeasy wine bar? Your needs will differ wildly from each other.
You have a location. You’re licensed. Your bar looks fancy and ready for patrons.
Now to find them! Marketing creates business success. A great bar startup is no use to anyone if it’s completely ignored.
A solid marketing strategy relies heavily on free methods in the beginning. Social media makes it relatively easy to get your name out there without too much expense. That said, you may need to invest in loyalty programs or discount deals to get the first folks through the door.
It’s a good idea to understand the average bar startup costs before you get into opening one. The best way to get accurate bar startup costs is to ask local bars for their honest advice. Each place may have different values because each offering is different. When you have a clear number, you can seek funding to make your dream a reality.
For more guides like this, check out our resource hub!