
How to Open a Bar
Many people dream of opening a bar because it seems exciting, profitable, and simple. While the first two can be true, running a bar certainly isn't easy. Opening a bar requires as much preparation and hard work as any other establishment and without any guarantee of success. Entering the process with realistic expectations and industry knowledge enables you to avoid common pitfalls. This guide answers the question of many late-night conversations: "how do I open a bar?"
Table of Contents
Making Your Bar Business Plan
What do you need to start a bar? As with any entrepreneurial venture, you should start by creating a plan. Writing a business plan will help you solidify your ideas and help you catch any issues with your concept before you encounter them. The following steps are a basic checklist for creating a business plan to establish your bar.
Step 1: From Dream to Concept
Every business starts with a vision, but before moving forward with opening a bar, you should decide on a concept that brings something unique to the community. Do you want to create a neighborhood pub offering food, a cozy, craft beer-focused bar, or a vibrant nightclub in a busy area?
Creating a menu is another essential step in deciding on a concept. Bar menus may seem simple since beverages are the main focus, but if you plan on opening a kitchen, they can end up being more complex than some restaurant menus.
Step 2: Do Your Homework
You shouldn't commit to a location or menu until you can conduct a market analysis. A successful market analysis includes a target market with demographics of customers you want to reach, a competition analysis, and an evaluation of your market's demand.1 This may include collecting some of your own data in the area you want to start a bar. Although time consuming, this process is important in the long run and can help you avoid financial disasters, such as opening a nightclub in an area better suited for a tasting room.
Step 3: Get Ready to Advertise
Once you know what kind of bar you're looking to open, you can create a marketing plan. Websites and social media are low-cost means of spreading the word; when properly managed, they can be used to build relationships with customers and give your business a positive reputation. You should advertise your bar before its grand opening to ensure potential customers know about the new venue; make sure to set a firm opening date so they know when to visit.
Step 4: Manage Your Bar's Money
Creating a budget for your new bar will help you determine the amount of money to procure for opening a bar. This will depend largely on whether you're acquiring an existing business or starting from scratch. Most projects end up being more expensive than originally expected because of unanticipated setbacks, such as legal obstacles and construction delays. It might take a while for your establishment to break even and longer still for it to become profitable.
Your budget should account for operating costs, licenses and permits, wages, and any food or alcohol products. If possible, pad your budget with more funds than you anticipate needing.2
Step 5: Finish Your Bar Business Plan
Now you're ready to write out a business plan. If you also don't have the necessary capital to pay for your bar, you will need to fund your business through business partners, investors, or loans. You'll need your well-crafted plan to show any potential investors. The U.S. Small Business Administration provides a more in-depth look at writing a business plan.3
Legalities & Licenses for Your New Bar
After creating your business plan and acquiring your building, you must secure a liquor license. Alcohol laws vary from state to state, and some areas have a limit on how many liquor licenses can even be issued. As stated in this article about obtaining liquor licenses, "[some] states' prohibition-era quota systems have created highly competitive markets in which liquor licenses are often traded at prices as high as a quarter-million dollars or more." Even if you do not live in a quota state, being approved for a liquor license can take several months, so you should apply for yours as soon as possible to ensure you have one in time for your establishment's grand opening.
Property and general liability insurance are necessities for any business, but bars and other establishments that serve alcohol should also acquire liquor liability insurance, which helps protect from lawsuits brought against your company because of altercations or accidents involving intoxicated patrons.4 Familiarize yourself with local bar laws to ensure you get the proper degree of liquor liability insurance to protect your business.
The Alcohol and Tobacco Tax and Trade Bureau offers more information about other legal considerations of starting a bar,5 such as registering your business's name, getting a tax identification number, and securing state licenses and permits.
Equipping Your Bar
After you've secured a location for your business, finalized your menu, and taken care of any legal necessities, you can begin the fun part: equipping your bar. If you sell food, you will need to invest in commercial kitchen equipment. Otherwise, focus on outfitting your establishment with the right beverage equipment.
How to start a bar: Equipment checklist
Ensure these bases are covered before opening day:

Refrigeration & Ice

Equipment that keeps your drinks fresh and cold is crucial to your bar. Purchasing quality refrigerators and ice makers is the best way to avoid warm drinks, which are unacceptable in a bar setting. Back-of-house and underbar refrigerators—as well as back-bar units, bottle coolers, and wine refrigerators—will keep beverages at ideal serving temperatures.
With several different types of ice available from commercial ice makers, finding the right one for your drinks can elevate your guests' experiences. Larger cubes are great for presenting high-end liquors and have a large surface area, which sustains cooling and slows melting. Half-cube ice is better for soft drinks, while nugget and flake ice both work well in frozen cocktails.


Glass chillers can elevate your drinks even further. Couple a glass chiller with a draft beer system to cultivate a loyal customer base, capitalizing on the growing popularity of craft beers.
Underbar Equipment
Having the right Underbar Equipment will streamline service and make your bartenders' jobs much easier. From drainboards to sinks with blender dumps, it's important to have accessibility to water and drains. You'll also want to ensure plenty of glass storage is available, whether it comes in the form of cabinets, shelves, or hanging racks.

A soda gun and filler station will eliminate the need for soda bottles and cans, freeing up valuable bar space. An ice bin/cocktail unit is another vital piece of underbar equipment, and some models have a convenient sink to help keep the bar area tidy.
Investing in a couple speed rails for holding your most popular liquors will keep those frequently used spirits within easy reach for quick service. Underbar glass washers significantly reduce the labor required to keep a steady supply of at-the-ready glassware. Bottle cap catchers and openers also speed up bottled beer service.

Blenders & Mixers

Commercial blenders are critical components in any bar setup. Most bars also need frozen drink machines for margaritas and daiquiris. The temperature at which alcohol freezes depends on the proof of the liquor: the higher the proof, the lower the freezing point. Before purchasing equipment, check the unit's spec sheets to determine whether it will be suitable for frozen alcoholic drinks. Almost all bars, however, will need to invest in at least one quality drink blender. You want to make sure the blender is rated for crushing ice; many brands have models with powerful motors and specialized ice-crushing blades.
Glassware & Displays
Merchandising liquor displays can add a visual element to your bar, but you'll need to verify you have a variety of drinkware designed specifically for the spirits you plan to serve. Rocks, high ball, pilsner, and shot glasses, as well as beer mugs and pitchers, can be placed on shelves for aesthetic effect. Likewise, stemmed glassware for wine, martinis, and margaritas can be hung by the stem in wire or wooden racks for display and easy access. Bucket servers, coolers, carafes, and stoppers can enhance wine service.

Finishing Touches & Inventory Control

Liquor portion control pourers help control inventory by metering the amount of liquor that comes out in one pour, preventing wasted profits from improper pouring. There are some specifications as to how these pour units can be used, so make sure to check local codes when using store-and-pour containers for storage.
Adding finishing touches to cocktails can be done efficiently and stylishly with bar top dispensers. Specialty spoons and muddlers help prepare leaves for mojitos and oranges for old fashioneds, while signature margaritas are completed with glass rimmers.

Payment Folders & Trays

Finally, you'll need to equip your wait and bar staff with the items they need to best serve their customers. Ensure your wait staff has cash carriers, trays, and coin holders to establish a smooth payment process.
Finding the right equipment to start your bar will help give you a leg up when opening day comes. With the proper preparation and an engaging concept, you can move towards establishing your bar as the next hot hangout spot.
References
- 7 Steps for Successful Restaurant Market Analysis. ChowNow. Accessed November 2024.
- The Average Startup Costs for a Bar. Houston Chronicle. Accessed June 2016.
- SBA Business Plan. Small Business Administration. Accessed June 2016.
- Insurance Coverages Needed by a Bar. About Money. Accessed June 2016.
- Starting a Business. Alcohol, Tobacco, Tax, and Trade Bureau. Accessed April 2020.