How to Start a Bar

Written by Dave Lavinsky

How to Start a Bar



How to Start a Bar

If you’re looking to start a bar, you’ve come to the right place since we’re going to show you exactly how to do it.

We’ll start with key bar industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we’ll discuss keys to not only starting a (insert name) business, but succeeding in it!

And definitely check out our bar business plan template if you need a business plan to start or grow your bar.

How big is the bar industry?

There are 64,354 bars in the U.S. that generated $25 billion in revenue last year. This represents an annual growth rate of 1.0% in the past 5 years.

What are the key segments of the Bar Industry?

The main segments of the industry are mixed drinks and beer. The other segments of revenue include:

  • Sale of meals and nonalcoholic beverages
  • Sale of wine drinks
  • Other (accommodation, cigarettes, rentals and packaged liquor)
  • Admissions to special events and nightclubs, including cover charges


What external factors affect the Bar Industry?

A number of factors affect the performance of the Bar Industry. These drivers include:

  • Consumer spending: This year, consumer spending is expected to increase which means that Americans would tend to spend more for products and services, which includes goods and services in the bar industry.
  • Consumer Confidence Index: A raise in consumer confidence index is expected this year. This means that consumers will tend to increase spending for entertainment and leisure.
  • Per capita expenditure on alcohol: This means increased alcohol consumption by the consumers. This is also expected to increase slowly in the present year.
  • Healthy eating index: As health awareness increases, there is also a growth in the healthy eating index of the consumers. This means there is an increasing number of people who limit their alcohol consumption. This is expected to increase this year and will negatively affect the bar industry.

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What are the key customer segments in the Bar Industry?

The key customer segments in the bar market are as follows are all relatively equal amongst those aged 25 to 54. Those aged 55 and over and those aged 25 and under also account for a small portion of industry revenue.


What are the key costs in the Bar Industry?

Purchases – This category eats up the largest portion of the industry revenue.

Wages – It is estimated that more than a quarter of the bar industry’s revenue account for wages.

Other – This includes expenses like insurance, accounting, office, licensing, rent, etc.

What are the Keys to Launching a New Bar?

1. Determine your bar type
Know what type of bar you want to own – neighborhood bar, dance club, live music club, sports bar, resto bar, etc. Your entire business plan will center around this so make sure to consider every factor that would affect the business that you are planning to start.

2. Choose a name
Your bar name will greatly affect your popularity. Choose a name that people will remember and that will allow them to recognize what your type of bar your business is. Make it trendy, something that would appeal to the current generation.

3. Find a location
Build your business in an accessible location. Make sure not to operate within residential areas to avoid complaints from homeowners especially if you are planning to start a night club. Consider asking the opinion of establishments or households around your desired location before you spend your money on it.

4. Get the proper licenses
Aside from business permits and licenses, know the regulations in your state for bars and comply with its requirements. Some require permits for food and certain beverages so get in touch with your local regulatory departments and Alcohol Beverage Control. They will help you in determining which food and drinks are allowed to be sold in your bar.

5. Hire employees
Look for people that have previous experience in the bar industry. This will save you more time in training them. Aside from skills, check your applicant’s personality, work history, and health background. It also helps to interview your applicants personally so you can assess them better before letting them in your business.

6. Execute a Strategic Marketing Plan
The goal of a bar’s marketing plan is to ensure long-term success. Employ an integrated strategy that will reach your target market segments. Utilize marketing, public relations, advertising and sales efforts to gain brand recognition and ultimately drive revenue.

7. Control Inventory and Costs
Profitability analysis and inventory control is an important task of every bar owner, which must be carried out regularly in order to prevent theft and reduce unnecessary costs.

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Bar Business Plan Template and complete your business plan and financial model in hours.

What are the Typical Startup Costs for a New Bar?

Bars startup costs range from $140,000 to $450,000.

How much do Bar Operators make?

The average salary for bar owners is $98,000.


Helpful Videos

Top 10 Bar Drinks

The Number 1 Success Secret To Bar & Restaurant Business


Additional resources in the Bar Industry

For additional information on the bar market, consider these industry resources:


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