How Much Does a Bar Cost to Open?

So the COVID-19 pandemic is finally waning, and you’re ready to open up the bar you’ve been dreaming about. The expenses associated with running a business vary depending on several factors, and you should be aware of them before taking on a new venture.

As you get ready to open up a bar, consider these 3 big influencers of your budget.

The Cost of Starting a Bar

1. Location

Where do you plan to start this new venture? Not just the state, but the local jurisdiction matters too. City business taxes, for example, usually hover between 5 to 10K. Meanwhile, whether you plan to rebuild an existing space or from the ground up matters. Taking over where similar businesses used to operate will likely mean that you don’t have to invest in a lot of the core requirements that health inspectors have for the floor plan, like ventilators and certain-size doorways.

Building from scratch can cost more than 100K; if you rent, you’ll pay less before opening but it will also vary wildly depending on how well-trafficked the area is. Rent is high in big cities where people flock; but the costs may be worth it if there’s not a lot of competition nearby, and the customers will definitely come to you. Take all of this into account as you consider where to open your bar.

2. Bar Licensing

You’ll definitely need liquor licenses, but did you know that you may need separate ones for beer, wine and liquor? Fees differ between cities and states too. Getting your bar licenses all up to date can cost anywhere from hundreds to thousands of dollars. You may want to start saving early or adjust your budget depending on the associated fees of starting a new business.

The type of bar you run matters since you need different kinds of alcohol licenses anyway. You could open a wine bar, brewery or the hottest social hangout. Each different choice affects what you’ll need to run legally. And even then, liquor sales aren’t the only thing to fill out an application for. Check out ten hospitality licenses you’ll need before opening.

3. Size

Where you open and what kind of bar you want to run both influence the ideal size of your business. Do you want multiple venues? Maybe you plan to start in a big city, meaning you’ll probably have less floor space to work with. However, physical size isn’t the only kind to consider.

It also refers to your staff. Ideally, have at least six months’ payroll ready before opening, so there’s time to become solvent. This could equal anywhere between 50 to 100K depending on how many employees you hire, and whether you plan to offer competitive wages too. Your staff also plays a role in the cost of insurance, so take all of this into account when planning your new business.

How to Open a Bar on a Budget

All of these opening considerations can seem daunting—and expensive. Budgeting will help smooth the takeoff.

Keeping a clean and straightforward budget lets you track the bar’s health over time, and permits a long-term plan for growth. A strong budget streamlines operations down to what you need for success, so you can reduce some of these hefty costs of doing business. Learn better budgeting skills with a smart Point of Sale system that can analyze sales reports to save you both time and money.

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