How To Start A Bar
This article provides you with plenty of information about starting a bar. Let’s begin by going over the steps to starting a bar.
Our next step is to examine some considerations to help you determine whether a bar is right for you and finally, we will review some resources to assist you in starting and operating your business.
Let’s get started.
Followed by:
- What To Consider Before Starting Your Bar
- Bar Considerations
- Bar Resources
How To Start A Bar
Follow the steps below to start a bar
1. Research the industry
The more you research your business before starting it, the better off you’ll be. You’ll be able to make informed decisions and pick up tips and insights to help you now and in the future. So, let’s look at the next four sections that can help you effectively research your bar before you start.
a.) An Inside Look at an Established Bar
The best information you can get is from people already in the industry. They are qualified, they have experience, and they can guide you. Let’s look at a few ways to get this information.
Bars for sale:
Look into bars for sale and contact the owners to discuss the business opportunity. When making contact, let them know that you’re planning to start your own bar, but before you do, you’re looking into the possibility of purchasing a bar that’s already in operation.
Before you meet with any business owners, you will want to create a list of questions and prepare for the meeting.
When meeting with business owners, you want to keep an open mind because you may find an opportunity that makes sense and is a better route to take than starting your bar from scratch.
When you meet with the business owner, You want to start a conversation. The questions to ask should be related to their experience with the business. This breaks the ice and allows the business owner to open up to you. It also allows you to learn more about the business owner.
Your questions may resemble the following:
- What made you want to start your own bar?
- What do you like most about running a bar?
- If you had to start over, what would you do differently?
- Why do you want to sell your business?
- What advice can you give me for taking over your business?
After asking the above questions, you can get into more details about the business, for example:
- How much revenue did your bar earn last year?
- How much of that revenue was profit?
- What are the most pressing problems you face when running a bar?
- How much debt is owing on the business?
- How many employees do you have?
- How much did you pay in salaries last year?
- What’s the best type of equipment to have?
- What are the mistakes to avoid?
- Etc.
Don’t forget to ask the questions on your list.
The information you receive and touring multiple businesses is priceless. Again you’re getting information from people that have the experience and expertise to run a bar.
Franchise Opportunities:
Your next step is to search for business opportunities related to the bar and nightclub industry. Again, you will create a list of questions before meeting with the company representatives. Many of your questions may already be answered in their presentation with a franchise opportunity. Still, it doesn’t hurt to have your own questions ready.
Asking for Advice From Bar Business Owners:
In the section, contact bar owners out of your area. Tell them how you found out about their business, and you will be opening your own bar. Ask them if they would be willing to schedule some time to give you some advice about opening your own bar. Assure them that you will not compete with them and that your location is distant from theirs. Also mention, you would be open to staying in contact to brainstorm ideas and share information once your business is up and running so you can both benefit.
Many will resist your offer because either they’re too busy, view you as a threat, or they may feel no one helped them when they were starting out for those that do help you and give you advice that can turn into a long-term business relationship or even a friendship.
Published Interviews:
Search for published interviews by Bar business owners and go through each one to find tips, insights, and valuable advice. Some of these people leave their contact information. You may even want to contact the person using the example above to ask questions and develop a professional relationship.
If you go through all the examples above, you will have expert knowledge that you can’t find unless you spend years to gain that experience yourself. So why not spend a few weeks going through the exercises? Then whether you purchase a business, start a franchise, or start from scratch, you’ll have priceless information. Search Results Related to Interviews From Bar Owners.
For more on the above methods, see An Inside Look Into The Business You’re Considering.
b.) Expand Your Knowledge of the Bar and Nightclub Industry
Keeping up to date with the bar nightclub industry is a good practice. There are many ways of doing this. You can subscribe to newsletters, publications, blogs, follow experts on X, Facebook, LinkedIn, etc.
The information is there. All it takes is organizing the information you want to follow and scheduling time, for example, once a week or at least once a month, to review to go over the information.
Click Here for the Latest Publications Related to a Bar.
c.) Choosing a Location
The location you choose to open your bar strongly affects how successful you will be in running your business.
You must find a site that is convenient for your customers. Locating in a region with no demand or a saturated market will restrict your growth.
Another consideration when it comes to this type of business is the cost.
For example, imagine locating on a busy downtown Street in New York. Getting a location in that area will cost you an arm and a leg. On the other hand, locating somewhere out in the country won’t do you any good either.
So you have to weigh the pros and cons of the cost for the area. Of course, you want to have a lot of people coming into your bar, but at the same time, you have to be able to pay the lease, rent, or mortgage, and other expenses. For more, see Choosing the Best Location for Your Business.
d.) What Type of Bar Will You Start?
You need to consider what type of bar you’ll be starting.
- Will you be offering drinks only?
- Will you offer light food, such as sandwiches, fries, hamburgers, etc.?
- Will you be setting up your bar as a nightclub setting or focus on a restaurant type of setting?
- Will your bar have a theme?
There are many options to consider. However, to set up your bar correctly, you must have a plan before starting. It’ll be easier to complete the start-up phase when you know your setup.
2. Choose a Business Name
The name you choose for your bar is a critical step. You need a name that is memorable, appropriate, and catchy. The name you choose today will be the name you have for as long as you’re in the business. So you want to take some time to choose the right one because it’s rare for a business to change its name.
Some online resources will help you choose a name by providing examples. You can use these to get your creativity flowing.
I suggest listing 10 to 20 candidates for a business name. Then put your list aside for a few days and return to it. Because you’ll have a fresh perspective.
Once you’re back, choose the top five names on your list and see if they’re available along with a matching domain name.
With your list of the final business names available for registration, print them out to see how they look on paper. Use the name in sentences to see how they sound and test the pronunciation. Get some feedback from some friends and colleagues. For Bar Name Ideas, See Google’s Latest Search Results.
3. Legalizing Your Business
Your business must be legal before you start any activity. Every state and location has variations in the laws for setting up a business; therefore, you want to check with your state/province and city hall to get detailed information. Next will go over a few points to keep in mind that will give you an overview of the process.
a.) Decide on a Legal Structure
There are different structures you can choose from to set up your business. Many new business owners start as a sole proprietorship because it’s the easiest to set up and the least expensive. However, a sole proprietorship offers the least liability protection for your assets, and it’s worth noting that you cannot have a partner if you’re registering a sole proprietorship.
Other popular structures include a corporation and a limited liability company LLC.
These types of structures are separate entities in the eyes of the law.
Therefore if your business goes bankrupt or you’re served with a lawsuit, your personal assets are not at risk because the business and you are separate entities.
When it comes to registering a business, my preference is to use a lawyer, the advice of an accountant, or use a company specializing in structuring businesses. I’d like to ensure everything is 100% complete and legal. For More, See How To Register Your Business Using These Resources.
b.) Get a Tax Id
You will most likely need a tax ID when starting a bar, especially if you have employees.
Again, if you’re using a professional’s advice or setting up your business, they will advise you or apply for your tax ID as part of the setup process. For more see Here’s How To Get A Business Tax Id
c.) Local Permits and Regulations
In addition to registering with your state or province, you will need to head down to City Hall to see what regulations you need to abide by locally. You will also need to apply for a liquor license to set up your bar. Visit the Licensing and Permits Page for More Information.
4. Create Your Corporate ID
Your corporate ID includes business cards, signage, logo, letterheads, envelopes, business checks, website, etc. It is an essential part of branding your business. However, you must have a professional design; an unprofessional one reflects badly on your business.
Even though a complete corporate ID package can be expensive, you can get by with a logo, business sign, and business cards for now. Then, once your business gains some traction, you can add the rest of the components.
For More See:
How To Design A Business Logo – Make it Good It Might Last Years.
How to Design Business Cards That People Will Pay Attention To
Business Signs – Have a Look at These Ideas.
A Complete Introduction to Corporate Identity Packages
5. Equipment
You will want to spend some time researching the best equipment for your bar. Focus on effectiveness instead of price because you want the equipment to perform effectively.
If you conducted any of the exercises at the beginning of this article where you speak with business owners, you might have already picked up some tips on the type of equipment to use. That’s a good starting point, and you want to conduct your own research and maybe speak to some dealers to get a better idea of the brand and types of equipment you’ll need. Click Here for the Most Recent Google Search Results Related to Bartending Equipment.
6. Estimating Your Start-up Cost
No one can tell you what it will cost you to start your bar. This is because unless you have a detailed plan of the type of bar, size, theme, and the types of customers you’ll be serving, you won’t be able to get an accurate estimate of your start-up cost.
Once your plan is in place, you can begin your start-up estimate. Keep in mind many issues will not be apparent until you get pricing. Then, the other issues will show up, and you can add them to your estimate.
For more see Estimating Start-up Costs: Are You Missing Anything?
7. Writing a Business Business
A business plan is an important document for any business. It has two main benefits that will go over next.
Benefit number one:
Your business plan forces you to consider many aspects of starting and running your business. Therefore it forces you to be clear about your plans. Once you’ve created it, it’s a document you can use as a roadmap. It’s also a document you want to review from time to time and update either the plan or your business strategy, or both.
Benefit number two:
If you’re considering investors or obtaining financing to start your business, you need a business plan. A lender will not process your loan application without a professional business plan.
Options for creating a business plan:
You can use a template to create your business plan. Another option is using software that guides you through each section. Finally, you can hire a professional business plan writer to create your document for you.
It’s worth noting whatever method you take, you are the one who needs to provide the information, so there will be a lot of issues to consider. For more, see How To Write A Business Plan.
8. Banking Setup
Choosing a bank
You’ll need a bank to deal with when you open your business. Many new entrepreneurs will open an account with their existing bank. However, personal and business banking differ, so you want to choose the right bank. Another consideration is it’s not so much about the bank you choose but the relationship with your banker.
A competent banker who understands your business can help you in many ways, including managing your finances, approving loans, and helping you when you’re in a financial mess.
You will want a bank in your area because you will be dealing with cash and don’t want to keep a lot of cash on hand. I’d rather make daily deposits. If your bank is an hour away, it doesn’t make any sense to make daily deposits you want something in your vicinity for convenience. For more, see our page on How To Choose A Business Bank.
Acquiring a Merchant Account
You will need a merchant account to process payments from your customers when they use debit or credit cards. Depending on your sales volume will determine the risk factor involved with a merchant account. Again if you have a good relationship with your banker, they can help you with the application and approval process. See How To Open A Merchant Account for more information.
9. Get the Funding for Your Bar
You have come a long way once you reach this point of the start-up process. Now it’s time to make copies of your business plan and contact lenders for a business loan.
Before you start, it’s worth mentioning banks view new business loans as high-risk. Many new businesses fail in the first few years of operation; therefore, a bank would rather loan money to an established business with a good track record.
If your loan is declined, find out the reasons and address what you can before moving on to the next lender instead of getting disappointed. If you’ve seen multiple lenders and your loan is declined multiple times, you may want to look for an SBA back lender where the government offers security to the lender if your business goes under.
Another option is looking for investors for the start-up funds you need. Also, look at our post on Getting a Small Business Loan.
10. Software Setup
The software you choose can be a blessing or a curse. You’re on the right track when you find software that will help you streamline operations. However, many times new business owners will purchase the wrong software and try to adapt their business to the software, which is something to avoid. You want the software to work for you instead of the other way around.
Take the time needed to research the software packages out there. For example, some packages will be specialized for bars and nightclubs that may be appropriate, or you may opt for a combination of software packages. Be sure to check out the reviews and see if a demo is available. Check Out Google’s Latest Search Results for Software Packages Related to a Bar.
11. Get Your Bar Insured
You must have the right insurance before starting any physical activity in your bar. That includes when you’re setting up your bar and not ready to open your doors to the public.
I suggest you speak to a competent insurance broker with a background in nightclub, bar, and restaurant business insurance.
You may also want to consider interruption insurance, which covers revenue if your bar shuts down due to a fire, flood, or other incidents. For more, see our page about business insurance.
12. Bar Office Setup
Take some time to plan the setup of your office. The more successful your bar becomes the more time you’ll need to spend in your office managing the business. Therefore, you want a functional, comfortable, and fully equipped office. For more, see, Here Are Considerations for the Setup of Your Office.
13. Choosing Suppliers
Choosing a supplier is an important step because your supplier does have some control over your business. A reliable and competent supplier will ensure you have all the supplies you need to service your customer. On the other hand, a supplier that constantly lets you down will lead to poor customer service.
It’s important to develop a good working relationship with your supplier.
For example, if there’s a shortage of products that you depend on, a good relationship with your supplier will give you a better chance of getting your share of the supplies you need.
Treat your suppliers with respect and think of them as part of your team. Also, make sure they are benefiting from doing business with you. If you are always trying to get the best deal and keep your suppliers from making money, you won’t be the best customer for them. For more see, How To Choose a Supplier You Can Depend On
14. Create an External Support Team
An external support team can be extremely effective. Your support team is not on your payroll. Instead, you pay your members, either on a retainer contract, by the hour, or by the job. You will use your team for advice, services, or both.
Your team may include the following members:
- Lawyer
- Accountant
- Marketing Specialist
- Business strategist
- Business Consultant
- IT consultant
- Web designer
- Etc.
It’s important to stay in touch with your team of advisors and build a relationship. You can keep in touch with an email or phone call from time to time. When you stay in touch with your team members, they will be ready to help when you need them.
For more see, Building a Team of Professional Advisors for Your Business
15. Hiring Employees
In the early stages of operation, you may be planning on doing everything yourself, and if possible, that’s not a bad idea if it doesn’t affect customer service.
Eventually, you must hire people to help you operate or manage your bar.
It’s important to hire the right person for each position. Keep in mind that it’s easier to hire than to fire. And firing someone is an unpleasant experience.
When hiring, don’t focus on the hourly wage. Instead, calculate the yearly cost to get a better perspective. If you consider it, a team of just 5 people can cost you in the six-figure range!
For more on hiring, see How and When to Hire a New Employee.
What To Consider Before Starting
In this post section, you’ll find points to consider before starting your business. Take a few minutes to consider them. They may change your perspective.
Is Running This Business Right for You?
Many people dream of starting their own business. For various reasons, including:
- To be their own boss and in control.
- To get away from having a job.
- To Benefit from the lifestyle of owning a successful business.
- Possessing a passion for the business.
Of the reasons above, the one that stands out for me is being passionate about the business. Passion is a driving force you’ll need to overcome obstacles and succeed in business. Without passion, you’ll be thinking of an exit strategy rather than solutions when problems arise. For more, see Reasons To Start a Business
Do You Have the Skills
Have you considered whether you possess the skills to operate or manage your bar?
The good news is that you can develop the skills or hire someone. You can take a course for running a small business. You can take courses for bartending.
Another option is to hire a bartender and Learn to run the business as you go, and use your external support team for advice when making big business decisions. For more see, Do You Have These Essential Skills Needed To Run a Business?
Is It Better To Start From Scratch or Buy One?
We talked about speaking with business owners at the beginning of this article. This section will review a few of the pros and cons of buying a business rather than starting from scratch.
Pros:
- When you purchase a business already in operation, you bypass the start-up phase, which takes a lot of guesswork, planning, and unexpected costs.
- You start to generate revenue the day you take over the business instead of waiting to build a customer base.
- When you purchase a business, you acquire goodwill, including the customer base, the reputation of the business, and any assets the business has acquired.
Cons:
- Purchasing an established business is usually more expensive because of the goodwill.
- You purchase the good part of the business and inherit the flaws, which could be a bad reputation, poor customer service, excessive expense, etc.
- If you want to take the business differently, the existing customer base may not like it. Therefore, it may be better to start from scratch instead of changing the direction of an established business.
Click Here To View a Bar Listed for Sale From Google’s Search Results.
Should You Consider a Franchise?
A franchise can be thought of as a business in a box. Everything is taken care of for you. Your bar’s appearance, operating procedures, marketing, and advertising are outlined. Essentially, all you have to do is follow corporate’s instructions.
If you have your own ideas for business or operating your bar and a franchise, it’s not the course to take because everything is standard across all locations, and you can’t deviate from that.
When getting into a franchise, you have to remember that there will be ongoing franchise fees as long as you own the business, and you’re very restricted when making any changes unless approved by corporate. To Browse the Marketplace for Bartending Franchise Opportunities, See the Latest Google Search Results. Also, see, What You Need To Know About Owning a Franchise.
Resources
In the post section, you will find resources you can use when starting your business and when it’s up and running. You may even want to consider bookmarking this page so you can return to use the resources anytime you need them.
Industry Trends and Statistics
Trends and statistics are an excellent way to see how an industry is doing. You’ll get an overview and understand whether the industry is on the rise or declining.
You can also come up with ideas. For example, if there is a common problem in the industry and you can find a solution, that will give you a competitive edge. You may also find something you’ve missed and can incorporate it into your business.
Click Here for the Latest Google Search Results Related to Trends in the Bar and Nightclub Industry.
Industry Terminology
You must be aware of the terms used in the bartending industry. You may gain this information from years of experience, but why wait? The information is out there. All you have to do is use it.
Search Results Related to Terminology in the Bar and Nightclub Industry.
Associations
Joining an association can be beneficial. You’ll get tips and insights into the industry, plus educational material and a consistent stream of news. Some associations also offer vendor discounts and host events to attend so you can network with others in the industry.
You may also want to consider joining your local Chamber of Commerce to get to know the business people in your area and bring awareness to your bar.
Click Here To View Associations Related to the Bar and Nightclub Industry. You May Also Want To Check Out Our Page for Tips and Insights About Joining a Trade Association.
Top Established Bars
By studying the top bars, you’ll understand the competition and gain ideas for what you should include in your bar. You may also find an element that’s missing in the industry, and if you can incorporate that into your business, that will give you a competitive edge. To gain a firm overview, you must review many businesses to identify trends.
Search Google for the Top Bar in Your Area.
Marketing Tips
A business without customers will soon close its doors. Your business is your customer base. Without marketing, it will be difficult to gain any customers.
There are thousands of marketing tips out there for marketing a bar. Just review the tips and see which ones make sense to you that you can put in place and test.
Have a Look at the Latest Articles for Marketing a Bar.
Bartending Tips
Whether or not you are a seasoned bartender or not it’s always good to keep up-to-date with the industry and see what’s being published related to bartending. The key to this process is not just to look at the tips once but to schedule time, for example, an hour a week or at least once a month, to go over the latest marketing tips related to bars and bartending.
Have a Look at the search results for tips related to bartending.
Books
Books are another great resource for expanding your knowledge of running a bar. What’s great about nonfiction books is you can scan the table of contents and go to the chapter that contains the information you’re looking for.
You may even want to build your own library, for example:
- Books on customer service in the hospitality sector.
- Books on bartending.
- Marketing books.
- Business management books
- Etc.
Anytime you have a problem or are looking to expand in an area or improve, you can grab the book off your shelf and get the information you need.
View the Most Recent Google Search Results for books related to Running a Bar.
News
Keeping track of news related to the bar and nightclub industry is another source of information you should take advantage of.
Naturally, it doesn’t make sense to wait for a topic on the evening news, but you can use a site like Google News to see what stories are in the media related to bartending and nightclubs. Just type in your keyword, and you’ll get a list of the latest, archived, and related stories.
See Google’s News Search Results Related to the Bar and Nightclub Industry.
Videos
YouTube has new content published every day. So not only is it a channel for entertainment, but it has also become a great resource for learning.
Sure, some videos aren’t worth watching, but many have excellent information. So why not take some time to see what videos are available for running a bar.
Also, keep an eye out for the videos on the sidebar that YouTube will recommend related to your topic. They are worth looking into because you may not have considered those topics related to your keyword. See the Most Recent Videos Related to Running a Bar