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How to Open a Bar in 2020: Capital Needed to Setup a Bar

Filed in Articles by on March 16, 2020

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How to Open a Bar in 2020: Capital Needed to Setup a Bar.

How to Open a Bar: Perhaps, you are among those who have this love for business and being an entrepreneur then I guess you have a lot of business ideas going through your mind, one which might likely be to start up a bar where you gain a feeling of fulfillment by being able to provide people with the relaxation, taste, and fun they desire with your business idea during the weekends most especially.

How to Open a Bar 2019

Bars require around-the-clock maintenance, a good chunk of change in the bank to start, and aren’t recession-proof. More importantly, the environment you create has to tightly fit the people that will bring life to it. This article definitely will meet your curiosity and answer your questions on how to set up a bar and them types of bar you might want to venture in.

Step 1: Create a Business Plan

A failure to plan is a plan to fail. A business plan is an important document for any kind of small business. When planning how to open a bar, it’s practically a requirement.

Your business plan is a written plan that takes you from inception to success and will cover your company’s value proposition, the location and team, the industry you’re entering, your legal structure, products and services, how you plan to market yourself, financial projections, and any other additional information that will point you toward long-term success.

This plan will help guide each of the other steps in the process of how to open a bar. Refer back to it often and tweak it as necessary as plans change or pivot.

Step 2: Find the Right Location

Just as with any small business, choosing your location is integral to your short-term and long-term success. If you’re going to be the neighborhood bar, you better know the people you’re serving.

During planning, consider contacting your local chamber of commerce to get information on your target market. Are you catering to college students, blue-collar workers, the art crowd, or conservative suburbanites?

Step 3: Secure Funding

From booths to point of sale software to insurance to licenses, getting your bar idea off the ground requires some serious bank. You can easily spend tens of thousands of dollars in a small town, or millions in a bigger city. While the popular notion is to have one year of rent saved up.

If you don’t have that kind of startup capital, look into financing options for your venture. A good place to start is a business credit card, which can help cover the costs of small- to medium-sized purchases while also helping you rack up reward points.

Step 4: Obtain Licenses and Permits

First, you’ll need a license from the Alcohol and Tobacco Trade and Tax Bureau (TTB), the entity responsible for “regulating alcohol production, importation, and wholesale businesses; tobacco manufacturing and importing businesses; and alcohol labeling and advertising.” This process will take anywhere from six to 12 months.

Once you obtain the necessary permits and licenses, be sure your bar is kept up to code as these businesses are often subjected to inspection. It’s one thing to learn how to open a bar. It’s another to learn how to re-open one after shutting down for health code violations.

Step 5: Prepare to Work Tirelessly

Advertise the grand opening weekend. Set aside a marketing budget. Get involved in community events. Launch direct-mail campaigns and utilize social media.

Opening with great fanfare helps to create a buzz, and buzz will help spread word of mouth. Get promotional products. Work with the local liquor and beer distributors to provide you with swag for customers.

Everyone likes getting stuff for free, even if it is a cheap T-shirt. It may look easy, but running around making life fun for patrons is physically and mentally exhausting. There are many long days and nights. In short, the bar business is no path for those easily burnt out.

What’s Your Bar Type?

Before you get started on the actual nuts and bolts of creating your dream bar, you have to decide what kind of establishment you’d like to own. Let’s take a trip through the various kinds of bars–from neighborhood bar to large-scale club–and see which one is right for you.

Neighborhood Bar.

Conceptually, the neighborhood bar is still an American version of the English pub. You’ll find them everywhere in the United States. If you own this kind of place, you can expect to know many of your regular customers. As on the TV show “Cheers,” you may find yourself taking phone messages for customers or cashing their paychecks.

It’s because of the friendly atmosphere that neighborhood bars are successful. Some of these pubs open as early as 6 a.m., and they sometimes close earlier than other bars–depending on the clientele. This type of bar is perfect for small-scale entertainment options, such as darts, pool tables, video games, and jukeboxes.

According to the experts we interviewed, the startup cost for this kind of bar ranges widely, depending on the size and concept, but mostly on location. You can buy an existing neighborhood bar in a small town for $20,000, or you can spend a million dollars building a brand-new one in a big city.

Sports Bar.

Depending on the establishment’s capacity, sports bars can be a specific version of the neighborhood tavern, or they can take on a life as big as a club. You may have the latter in mind, but your market research may point to the former.

Generally, sports bars offer some kind of menu options, such as sandwiches, burgers, pizza, sandwiches, and appetizers. Since the main attraction is sporting events, sports bars have televisions in view of every seat, sometimes all tuned to different channels.

Audio and video technology comes into play, with some owners spending a large percentage of their revenue on keeping up with the latest in technology–from satellites to big-screen TVs. As with neighborhood bars, startup costs and revenue potential vary widely, depending on the size, concept, and location.

Brewpub or Beer Bar.

In a brewpub, you can brew your own beer right on the premises. In a beer bar, you can offer a large selection of different types of beer, including microbrews produced elsewhere. It’s often easier to get a liquor license for a brewpub or beer bar than a full-scale liquor license since you don’t need a fully stocked liquor bar.

Since you’re creating your own product in a brewpub, you also have the ability to control what you make and sell–from quality to quantity. The startup costs of a brewpub can be quite high–from $100,000 to $1 million–because of the brewing equipment you need to have. If you produce a popular beer, you have the opportunity to grow into a very successful operation.

Beer bars tend to have lower startup costs, which can often mean obtaining a less expensive, fixed-price license from your state government. Beer bar startup costs range from about $20,000 to $100,000, depending on size and location. The revenue potential depends on the geographical location and drinking trends in the community.

Specialty Bar.

Specialty bars, which concentrate on one type of libation, from wine to martinis, or theme, like cigar bars, are gaining popularity. Although some specialty bars focus on only one drink category, there must be a wide variety available within the genre. Take martinis: They have become very popular due to the variety they offer.

The traditional martini still has a solid appeal if made with quality vodkas and gins, but other mixes, like sour apple martinis, have expanded the martini-drinking base, especially among women. But even with their increased popularity, martinis are still looking up at wine.

Specialty bars tend to stay small and intimate in size and are located in more sophisticated neighborhoods. The costs and revenues you can expect to find when opening a specialty bar depend mostly on the type of product you serve and your location.

Club.

Like the neighborhood bar, nightclubs can take on a number of different personalities. You can open a small cocktail lounge with a jukebox or a tinkling piano in the corner.

A medium-sized club might look like a neighborhood bar during the lunchtime hours, then spring to life with a popular band at night. Or if you have a big enough budget, your club might be a large dance club where the most fashionable people and hippest celebrities hang out every weekend

Most successful clubs draw on a city population of 500,000 or more. If you’re in a small town or suburb, you may not have the customer base to open a large dance club. Market research is key.

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CSN Team. 

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