Modern bar in full operation with customers and a bartender shaking a cocktail.

Bar Startup: How to Start a Bar With Owner Interviews

by

What to Expect From This Guide to Starting a Bar

Starting a bar involves many decisions and practical steps. The bullets below highlight selected areas, not everything included.

Inside the guide, you will find:

  • Startup steps: Follow an ordered sequence from concept and demand checks through licensing, location, equipment, funding, and opening preparation.
  • Industry interviews: Hear experiences and practical observations from bar owners and operators about opening and running their bars.
  • Common questions: Find concise answers on situations the steps leave open, such as buying an existing bar and location limits.
  • Daily reality: See what a typical day involves, including the parts owners often enjoy and the parts they find hard.
  • Local requirements: Learn why liquor licensing, zoning, building, fire, and health approvals, which vary by location, can shape your lease and opening date.
  • Financial planning: Plan startup costs, operating capital, pricing, and break-even logic, and see how funding and your business plan connect.
  • Equipment needs: Build a category-based equipment list covering cold storage, ice, draft systems, glassware, payments, and sanitation.

The overview below introduces what a bar offers and asks whether the lifestyle, responsibilities, and approvals process suit you before any money is spent.

Business Overview

A bar offers alcoholic drinks for on-premises consumption. Many bars also offer nonalcoholic drinks, and some include food, from packaged snacks to a full kitchen.

Your core offerings usually include beer (draft and packaged), wine, spirits, and cocktails.

Your setup may also include entertainment such as trivia, karaoke, or live music, plus private events if your space and licenses allow.

Typical customers include nearby residents, commuters, tourists, event-goers, sports fans, and nightlife customers.

Your customer mix depends on your location, your concept, and what’s nearby.

Pros to plan around:

  • Multiple concept options: neighborhood bar, cocktail bar, sports bar, wine bar, or entertainment-focused bar.
  • Several product categories: beer, wine, spirits, and nonalcoholic drinks.
  • The ability to add events if permitted.

Cons to plan around:

  • Licensing is a gating item.
  • Location and zoning can block you.
  • Build-out and inspections can expand your timeline and budget.

For most people opening a bar, the risk is not the drink list. The risk is the approvals path and getting the physical space ready.

Is a Bar a Good Fit for You?

A bar suits you if you like fast-paced, face-to-face service and can handle busy nights and responsibility no one shares.

Before you price a single drink, ask a harder question: do you want to own a business?

Ownership makes you responsible for the approvals, the lease decisions, the bank setup, and the cash buffer, whether opening day goes smoothly or not.

You’ll make decisions about safety, compliance, and the customer experience in real time.

Passion matters in a bar, but not as hype.

Setbacks show up: permits take longer, inspections find issues, and suppliers miss deliveries.

Passion helps you solve problems and keep moving when setbacks hit.

Here’s a motivation check: are you moving toward something or running away from something?

If your only reason is escaping a job, easing financial stress, or chasing status, that’s not enough.

Escape and status can be part of your reason, but you also need a real pull toward owning a bar.

Expect uncertain income at first, long hours, and responsibility you don’t share.

You’ll also need family support, basic business skills, and a runway for rent, deposits, insurance, and your first payroll if you hire.

Before you commit, read key points to consider before starting your business.

Then review how passion affects your business and decide whether you can stay steady when things get frustrating.

Talk only with owners you will not compete against, such as owners in a different city, region, or area.

Prepare your questions in advance, and use inside advice from real business owners as a guide.

Practical fit questions to ask non-competing owners:

  • What approval took the longest: liquor licensing, building, fire, or health?
  • What did you wish you knew before signing your lease?
  • What equipment caused the most surprises: ice, refrigeration, or the point of sale system?
  • What vendor relationship mattered most at the start: alcohol distributors, food suppliers, or cleaning services?
  • What would you do differently in your first 30 days after opening?

Red Flags Before You Start

A few red flags can save you from signing a lease for a space you can’t use.

Watch for these warning signs:

  • You can’t clearly confirm the liquor license path for your concept in your jurisdiction.
  • Zoning for the address is unclear or conflicts with on-premises alcohol service.
  • The space needs major remodel work to pass building and fire inspections, but the timeline and scope are uncertain.
  • You plan to serve food, but you haven’t spoken to the health department about required sinks and sanitation expectations.
  • You’re counting on live music or outdoor service, but you haven’t confirmed entertainment, noise, or patio rules.
  • Your startup budget has no operating capital reserve for delays.

If any warning sign applies, pause and verify before you commit to a lease or a build-out.

A Day in the Life of Running a Bar

Your days often run into late evenings, weekends, and holidays, and your schedule varies.

Between service, you handle ordering, inventory, staff scheduling, payroll, and cleaning.

Cleaning and equipment trouble also land on you, from keeping bars and work areas clean to calling for repairs.

What owners often enjoy:

  • Building something that is your own, from the first idea to a working bar.
  • Sharing your concept with guests and seeing them enjoy it.

What owners often find hard:

  • Late nights, weekends, and holidays that cut into personal time.
  • Regular cleaning and upkeep of the bar and equipment.
  • Stressful moments with intoxicated or dissatisfied customers.
  • Hiring and managing staff, since the people you hire shape how guests experience your bar.
  • Administrative work, such as ordering, inventory, and payroll, on top of time on the floor.

Does this daily reality fit the life you want?

Step 1: Choose Your Bar Concept and Business Model

Pick a concept you can explain in one or two sentences.

Common options include a neighborhood bar, cocktail bar, sports bar, wine bar, entertainment-focused bar, or a bar with a kitchen.

Your concept affects costs, workflow, and customer experience.

A draft-focused sports bar has different equipment and supplier needs than a small cocktail-focused spot with limited draft.

Decide what kind of operation you’re building: a single-location storefront, a bar inside a restaurant concept, or a private-event-focused setup.

Some setups require different permits and approvals. Rules vary, so confirm with your state alcohol authority and your city or county licensing office.

Step 2: Decide What You Will Sell and What You Won’t

Decide which alcohol categories you will sell: beer, wine, and spirits.

Your offering choices change both your licensing path and your equipment list.

Then decide whether you’ll offer draft beer or stick to packaged beer.

A draft setup includes a draft tower, faucets, couplers, regulators, gas cylinders, and beer lines.

Whether to serve prepared food is a separate decision with its own permits, covered in Step 11.

Step 3: Know Your Customers and Why They Will Choose You

Pick one primary customer group, such as residents, tourists, or sports fans, and build your bar around it.

Be able to state why customers would choose your bar over the options nearby.

If your plan depends on tourists, what happens during slow travel weeks?

If your plan depends on sports fans, what happens in the off-season?

Step 4: Validate Demand Before You Spend Real Money

Confirm demand before you sign a lease, so you avoid a spot that can’t support your concept.

Check local supply and demand: foot traffic by day and time, nearby employers and venues, residential density, and the number of competing bars.

Compare competing bars on capacity, hours, drink categories, entertainment, and what customers praise or complain about.

You’re looking for a clear gap you can fill, not a perfect idea.

If you can’t explain why people will visit regularly, not just once, pause and rework your concept or location.

Step 5: Build Your Licensing Critical Path

Your liquor license path often drives your lease timing, build-out schedule, and opening date.

Most bar openings involve several approvals that can block you.

Common gating items include a liquor license, a general business license, zoning approval, a certificate of occupancy for the space, and building and fire sign-offs.

If you serve food, add health department approvals.

Varies by jurisdiction. Confirm with your state alcohol authority and your city or county permitting offices.

The federal Alcohol and Tobacco Tax and Trade Bureau publishes a directory linking to each state’s alcohol beverage authority.

Then follow that agency’s retail or on-premises licensing path for your concept.

If you’re unsure, ask a local small business attorney before you sign anything.

Verify these points as you build your licensing path:

  • Which liquor license type fits your concept: beer only, beer and wine, or full spirits.
  • Whether the address is zoned for on-premises alcohol service, covered in Step 8.
  • Whether the space can qualify for the intended use and occupancy under local rules.
  • Which inspections you must schedule, and in what order.

Step 6: Pick a Legal Structure and Register the Business

Decide on your legal structure before you sign a lease or apply for a license.

Alcohol service, a commercial lease, and employees can expose your personal assets, depending on the structure you choose.

Many owners choose a limited liability structure, but the best option depends on ownership, taxes, and liability risk.

Talk with a local attorney and a tax professional before you file.

Setting this up matters in a bar because licensing and banking often expect your legal entity to exist.

Rules vary, so check your Secretary of State business registration portal for formation steps and name availability.

If you operate under a name that differs from your legal entity name, you may need an assumed name or doing business as filing.

Assumed name filings are location-specific, so confirm with your state and local filing offices.

Step 7: Get Your Employer Identification Number and Tax Registrations

You’ll usually need an Employer Identification Number for banking, taxes, and hiring.

Get your number directly from the Internal Revenue Service, and avoid sites that charge fees for the same service.

Then register with your state tax agency for sales and use tax collection if your state requires it for alcohol, food, or both.

Employer accounts for payroll-related taxes come up again in Step 20.

Step 8: Choose a Location and Confirm Zoning and Building Requirements

Confirm that your address allows on-premises alcohol use under local zoning before you sign a lease.

Then confirm the space can meet building, fire, and accessibility expectations for a public-facing business.

Ask your city or county planning or zoning office how to verify allowable use. Also ask about restrictions tied to hours, patio use, or occupancy.

If you renovate, add sinks, change walls, or change the use of the space, you may trigger building permits and inspections.

Varies by jurisdiction. Confirm with your city or county building department and fire marshal.

Before you sign a lease, confirm you can fund it using the cost, pricing, and funding steps below.

Step 9: Plan Build-Out Around Inspections and the Certificate of Occupancy

Schedule your build-out around inspections, because your certificate of occupancy often depends on the space being approved for your intended use.

If you change the space, you may need permits, final inspections, and sign-offs before you can open.

Rules vary, so check with your city or county building department on the permit process and inspection sequence.

If you serve food, contact the health department before you finalize the layout so it supports required sinks and sanitation standards.

During build-out, expect regular calls with your contractor and landlord about items tied to inspections.

Follow up with your city or county offices on permit status, and schedule each required inspection.

Step 10: Build Your Bar Equipment List and Layout

Start with the essentials: cold storage, ice, a point of sale system, glassware, and a cleaning and sanitation setup that fits local rules.

Add draft components if you will serve draft beer.

Layout affects speed, safety, and how many people you can serve without chaos.

Ask where bottles will be stored, where cold storage and ice will live, and how glassware moves to the glasswasher and back.

A simple flow runs from glassware to the glasswasher, back to racks, and then to the bar stations without crossing customer traffic.

Core equipment categories to plan for before opening:

  • Bar stations and storage: speed rails, bar mats, bottle storage, back bar shelving.
  • Cold and ice: underbar refrigerators, back bar coolers, ice machine, ice bin, scoops.
  • Draft beer: kegerator or walk-in, draft tower, faucets, couplers, regulators, gas cylinders, beer lines.
  • Beverage prep tools: shakers, jiggers, strainers, bar spoons, citrus press, blender if needed.
  • Glassware: pint, rocks, highball, coupe, wine, flutes if needed, plus racks and bus tubs.
  • Payments and back office: point of sale terminal, card reader, receipt printer, router.
  • Cleaning and sanitation: glasswasher or dishwasher, sanitizer supplies if required, trash and recycling.
  • Safety and security: fire extinguishers as required, first aid kit, cameras, exterior lighting.

Missing items such as an ice bin, regulators, or enough refrigeration can delay opening.

If you choose draft, make a plan for line cleaning, and confirm who installs and services the system before you order.

Step 11: Decide Whether You Will Serve Food

Serving prepared food can change your permits, your equipment, and your build-out.

Your local health department will likely treat you as a food establishment, so ask about plan review, required sinks, and sanitation expectations.

You may need more refrigeration, prep surfaces, and cooking equipment, plus ventilation depending on what you cook.

Rules vary by jurisdiction, so confirm requirements with your local health department and building department.

If you don’t serve food, keep your setup simple.

Some owners limit food to packaged snacks to reduce health department complexity, but rules vary.

Ask your health department how it classifies your plan.

Step 12: Set Up Alcohol Suppliers and Vendor Accounts

Start by identifying licensed local beer, wine, and spirits distributors for your categories.

Alcohol supply is usually regulated at the state level.

Many states follow a three-tier system that routes sales through licensed wholesalers.

Then set up suppliers for nonalcoholic beverages, cleaning supplies, linen service if you want it, and waste services that fit your space.

Account requirements vary by supplier.

You may be asked for proof of your entity, your Employer Identification Number, resale or sales tax registration, and liquor license status.

Get minimum order quantities, lead times, delivery cadence, and credit terms confirmed in writing before you plan opening inventory.

Step 13: Plan Your Startup Costs by Category

List your startup costs by category instead of guessing a total.

The biggest swing factors are often liquor licensing, the space’s condition, remodel scope tied to approvals, and any draft program or food service.

You also need enough cash to cover the entire approvals and build-out window.

Common startup cost categories to plan for:

  • Licenses, permits, and approvals, including liquor licensing, local business license, building permits, and signage permits as required.
  • Location costs, including deposit, initial rent, tenant improvements, and accessibility upgrades if needed.
  • Professional services, including lease review, licensing help, and accounting setup.
  • Initial inventory, including alcohol, nonalcoholic beverages, consumables, and cleaning supplies.
  • Technology, including point of sale software, internet, and payroll and accounting tools.
  • Insurance premiums and deposits.
  • Staffing, including recruiting and pre-opening payroll if you hire.
  • Signage, domain, and basic website setup.
  • An operating capital reserve, covered in Step 14.

Your most accurate estimate comes from listing everything you need and pricing it locally.

Step 14: Plan Your Operating Capital

Operating capital is the cash that covers your ongoing costs until sales cover them.

List recurring costs such as rent, payroll if you hire, utilities, insurance, inventory, and loan payments.

Plan for slow months and seasonal dips, when sales may not cover your recurring costs.

Ask your accountant how many months of expenses your reserve should cover.

Step 15: Choose a Pricing Method and Verify Rules Before Final Prices

Choose a pricing method, but verify local rules before you set final prices.

You can adjust prices after you open, but you can’t undo compliance problems.

Common pricing methods include cost-based pricing built from recipes and portion sizes, competitor-referenced pricing, and value-based pricing tied to experience and specialty products.

Your best choice depends on your concept and your costs.

Before you set final prices, verify these items:

  • Whether your city or state restricts drink specials, happy hour rules, or price advertising.
  • How sales tax applies to alcohol and food in your state and locality.
  • How you’ll handle payment processing fees and any required disclosures.

Rules vary. Check with your state alcohol authority and your state tax agency.

Step 16: Check Break-Even and Profit Potential

Your break-even point is the level of sales where your total revenue equals your total costs, with no profit and no loss.

Calculate your break-even point with your own numbers before you commit to a lease, major equipment, or hiring.

Divide your fixed costs by what each sale contributes after variable costs.

Fixed costs stay the same as sales change, such as rent, insurance, and loan payments.

Variable costs rise with sales, such as the alcohol and supplies you buy to serve each drink.

Some costs include both fixed and variable parts, so separate them when you can.

Ask whether your location can bring in enough sales volume to reach break-even.

Lenders and investors often ask for a break-even analysis, so confirm what each one requires.

For more on projections, read estimating profit and revenue for a new business.

Step 17: Choose Funding Paths That Match Your Timeline

Common funding paths include owner equity, bank financing, equipment financing, investor capital, and landlord tenant improvement support if negotiated.

Some owners also use Small Business Administration loan programs through approved lenders, depending on eligibility and lender requirements.

Build your funding plan around your approval timeline, since licensing and inspections can run long while rent, insurance, and deposits keep coming due.

Before you apply, ask each lender or investor which documents they require.

Use the Business Plan section below to pull your costs, pricing, break-even numbers, and funding plan together.

Step 18: Set Up Business Banking and Payment Acceptance

Open a business bank account and get payment systems working before you take your first customer payment.

Bank account applications often require formation documents, an Employer Identification Number, and sometimes proof of licensing.

Payment processor applications may also require business documentation and a linked checking account for deposits.

Before opening, run test transactions on your point of sale system and card readers.

Confirm that receipts print, tips work the way you intend, and deposits land in the correct account.

Step 19: Plan Insurance and Risk Coverage for Opening Day

Separate legally required insurance from commonly recommended coverage, so you find coverage gaps before you sign a lease or hire staff.

In many states, workers’ compensation is required if you have employees.

Rules and thresholds vary, so confirm with your state workers’ compensation regulator.

Commonly recommended business insurance coverages for bars include general liability, property, liquor liability, and business interruption.

Add crime or theft coverage, and cyber coverage if you store customer data.

Your landlord or lender may also require specific coverage limits or endorsements, so verify before you bind a policy.

Step 20: Decide Your Staffing Plan and Payroll Setup

If you plan to hire before opening, set up payroll accounts and employer registrations in advance.

Staffing decisions affect service, compliance, and customer safety.

Plan for enough staff to cover service and safety.

At the federal level, employment taxes apply when you have employees, and tipped employee rules can affect wage setup.

Rules vary by jurisdiction, so confirm state withholding and unemployment registration steps with your state agencies before your first payroll run.

If you use tipped staff, verify federal requirements and check whether your state has stricter rules.

Step 21: Handle Music and Entertainment Requirements

If customers can hear copyrighted music, whether recorded, live, DJ, or karaoke, you may need music performance licenses through performing rights organizations.

The license you need depends on how you use music, so confirm directly with the licensing groups.

Also check local rules for entertainment permits, amplified sound, outdoor seating, and event approvals.

Varies by jurisdiction. Confirm with your city clerk or local licensing office before you advertise events.

Step 22: Build Your Brand and Digital Basics Before You Open

Lock in your business name, domain, and professional email before you order signage or other branded materials.

Start with a clean business name search through your state’s business registration system.

Your online basics should include a simple site or landing page with your location, hours, and core offering categories.

If you plan to protect your name or logo, learn the trademark process before you invest in major branding.

Step 23: Plan Signage and Physical Setup That Fits Approvals

Confirm sign permits before you install exterior signs, because sign rules vary by city.

Check what size and lighting rules apply and whether your location has special restrictions, such as a historic district overlay.

Physical setup is also about compliance, safety, and workflow, not just looks.

Your bottle storage, cold storage, and cleaning flow should match your layout and your inspection requirements.

Step 24: Run a Controlled Test Before Opening

If your licenses and local rules allow it, run a soft opening with a limited crowd.

Test your point of sale system, card readers, ice and refrigeration, draft pours if you serve draft, and your ID check process.

A controlled test also checks staffing coverage and service flow.

Keep the crowd small so you can catch problems without pressure.

Rules vary, so confirm with your state alcohol authority and local permitting offices whether any pre-opening event has special requirements.

Step 25: Complete the Pre-Opening Checklist

You’re ready to open when approvals, equipment, suppliers, payments, and insurance are all in place.

Keep your checklist current as you confirm delivery dates for your ice machine, refrigeration, and distributor orders.

Also finish your drink list and keep documentation organized for licensing and tax records.

Use this list for your final check:

  • Liquor licensing: correct license type approved for on-premises alcohol service, with any required premises inspection completed.
  • Local licensing: general business license complete if required by your city or county.
  • Zoning and occupancy: zoning use confirmed and certificate of occupancy issued for the intended use.
  • Building and fire: permits closed and final inspections passed as required.
  • Health approvals: completed if you serve food, including plan review if required.
  • Accessibility: customer-facing areas and restrooms meet public access expectations under federal law, and local requirements are satisfied.
  • Equipment installed: refrigeration and ice running, bar stations stocked, draft system installed if applicable, sanitation setup in place.
  • Payments live: business bank account open, point of sale system configured, test transactions completed, receipts and tips working.
  • Suppliers set: alcohol distributors set up and first deliveries scheduled within your licensing rules.
  • Insurance active: required coverage in place based on your state and staffing plan, plus recommended coverages aligned with your risks.
  • Staff plan: employer registrations completed if you hire, wage setup verified, and training completed if required by your jurisdiction.
  • Music and events: music licensing handled if you play copyrighted music, and entertainment permits in place if needed.
  • Brand basics: domain secured, website basics live, and signage permitted and in place.

Business Plan

Start drafting your business plan while you complete the previous steps, then finish it once your costs, funding, pricing, and break-even numbers are in place.

Your business plan brings together your startup steps, legal checks, cost items, pricing, funding, and pre-opening confirmations.

Include your profit-potential check: the sales volume you need to cover fixed costs, how margins hold up, and how you’ll handle slow periods.

Do not invent numbers to fill gaps. Use your own local quotes, prices, and costs.

Add whatever documents each lender or investor told you they require.

Opening-Day Red Flags

Delay opening if any critical gate is still open.

Critical gates to clear before opening:

  • Your liquor license status is unresolved.
  • Your zoning use is unclear.
  • Your certificate of occupancy has not been issued.
  • Required inspections are not passed.
  • Payments are not live.
  • Required insurance is not active.
  • Supplier deliveries are not scheduled.

Opening anyway turns fixable problems into expensive ones.

Frequently Asked Questions

Can I apply for a liquor license before I sign a lease?

Sometimes, depending on your state.

Some states tie the license to a specific premises address, while others let you start parts of the process before you pick a location.

Ask your state alcohol authority exactly which steps you can begin before you have an address.

Can I keep the liquor license if I buy an existing bar?

Not automatically.

In some places, the license ends when ownership changes, so you apply for your own.

Other places allow a transfer, sometimes only if you keep the same license type.

Either way, you can’t operate under the former owner’s license, so ask your state alcohol authority before you sign a purchase agreement.

Can a nearby school or church block my liquor license?

Yes, in some places.

Some states and cities bar new on-premises licenses within a set distance of schools and churches.

Exceptions and measuring methods vary, so ask your licensing authority to check your address before you sign a lease.

Do my partners and investors need background checks?

Possibly, depending on your licensing authority.

Some licensing authorities review owners, and some also review managers.

Reviews can include fingerprints and a criminal background check.

Ask your state alcohol authority who must be disclosed before you bring in partners or investors.

Expert Advice From Bar Owners and Operators

Interviews with working bar owners and operators help you spot gate issues before you spend money.

Several of these interviews cover partners, regulators, build-out costs, hiring, and the daily workload.

Use these perspectives to pressure-test your plan and tighten your pre-opening checklist.

Tales of the Cocktail Foundation: Four Bar Owners on Opening Their Own Places

Four bar owners describe how they opened their own places, from finding partners and dealing with regulators to funding build-out surprises.

Read it to see how different owners handled setbacks and what kept them going through a long opening process.

Read the Interview

Liquor.com: Kevin Diedrich on Five Things to Do When Opening a Bar

Kevin Diedrich shares five things to do when opening your own bar.

Use it as another viewpoint to compare with what you hear from non-competing owners.

Read the Interview

Imbibe Magazine: Erick Castro on Running Polite Provisions

Erick Castro, a partner at Polite Provisions, discusses what it takes to run a cocktail bar.

Read it for an operator’s perspective on what running a cocktail bar involves.

Read the Interview

Grub Street: Julie Reiner on Opening a Bar

Julie Reiner shares advice for opening a bar in this interview.

Read it to compare her advice with what you hear from non-competing owners.

Read the Interview

Bartender Atlas: Marlene Thorne on Switching Careers to Open a Bar

Marlene Thorne left a corporate career to open a bar and discusses her challenges, daily workload, and advice on planning and hiring.

Her bar is located outside the United States, so use her advice on workload and planning, not on licensing.

Read the Interview

Related Articles

 

Sources: