How to Open a Bar
How to open your own bar
Apart from the usual steps of a business plan template a bar needs also a creative approach, as it includes design, a conception and a full branding strategy to survive financially and be attractive to more and more people.
What does a bar business plan look like
At this point you know that a business plan template is the first step for any entrepreneurial journey.
You need a business plan, not only to know how much does it cost to open a bar, but also to present it to your possible investors in case you need to ask for a loan.
Of course, every business sphere adapts their business plan to their needs and particular characteristics of trade.
But there are things that every entrepreneur should know and reflect in their business plan from the very beginning to make sure that the average cost of opening a bar does not get out of proportions.
Business plan for a bar OUTLINE:
- Introduction that briefly describes your business
- Company analysis: more detail description of your future business
- Industry analysis: information about general industry trends
- Customer analysis: define your ideal client or buyer
- Competitors analysis: state how different you are from your competitors
- Marketing plan: design and describe your marketing strategy
- Operations plan: explain and show how you will run your business
- Management: describe who are your managers or staff members
- Financial plan: design a financial forecast for your business
- Additional information: any extra information that is relevant to your business
How to find the right location to open a bar
Once you figure out the concept and branding to start your own bar, the next step is to define what business structure you want to follow.
For that it is necessary to explore all the possibilities from renting a place to buying one.
- Renting an existing bar might seem the easiest option at the beginning, but it needs a previous thorough investigation in order to understand what do you need to open your own bar in this place.
- You might have to visit it several times at different times of a day, talk to the service, analyse the clients and pay attention to the cleanness of the establishment and other important characteristics.
- Building your own place from zero is usually the most laborious, but also comforting way to start your own bar.
- It is advisable that you first consult possible architecture and construction companies to obtain information on how much does it cost to build a new bar, including the construction or rebuilding plan, permits, and mind additional costs, they always arise on a construction site.
- An intermediate option is to remodel an existing bar, so you can adapt it to your bar conception and consider how much does it cost to build a new brand and attract new customers for an existing bar.
- In this case the most important thing is to take care of the transition, whether you want to make a smooth transition or close and reopen under a totally different name.
Create a brand for your bar
Opening a bar can be even fun, specially when it comes to the part of branding and creating a concept for your place.
First you have to put out your idea for the bar in general terms, that is called the conception of your new business.
The next step is to define your brand identity, which is giving the initial general though a precise shape and colour.
Every detail should be thoroughly considered and registered, because you might not like it at the beginning, but change your mind later.
Start by studying all the possible types of bars that can be opened nowadays, but remember it is not the limit.
You can create your own bar business concept totally out of the box.
How to decide which bar you want to open
In reality there are several defined business models for a bar, the rest is left to the imagination of the owner.
In order to get some orientation in the bar and restaurant industry before you can open your own bar you can have a look at the list below:
- A regular neighbourhood bar that recreates a home atmosphere, where you can grab a bear with a friend or have a nice chatty-chat dinner with your fiancée or a family lunch. The good news about such type of bars is that you can purchase an already existing one and avoid the high cost of starting up a bar from a scratch. In order to know how much exactly it costs to run a bar like this you can also get informed by speaking with the previous owner. Things that you have to look closely at in this situation is the locations of the pre-existing bar and its capacity.
- A beer brew bar, which has a very restrictive target public on one hand, but on the other it seems to be quite an appealing business as beer consumption is one of the most popular drinking habits, specially among men, so you barely will be out of clients. Besides, you can brew your own beer, which can save you some money on the average cost of its supply.
- A sports bar is another attractive option for those who want to start up their own bar business. In this case equipment, decor and a broad range of menu offer is a must if you want to get your returns as fast as possible. Additionally, the premises and location can play a decisive role in the average income flow in a long o short term.
- A sophisticated bar can seem as a gorgeous and exciting idea, but can represent quite a difficult business and marketing strategy and definitely needs a higher investment in order to set up your bar right away. On the contrary, if you choose your location accordingly to your target audience interests, it can truly bring you a high level of profits in a long run.
- A clubhouse has the advantage of going from small to medium size, so you can decide how much you want to spend on running your own bar monthly or annually from the beginning. For this matter the major expenses for nightclubs and clubhouses lay in the realm of marketing, so you will have to study the competence, analyse the market and choose well your location.
- A speciality bar is an establishment that focuses on a specific topic such as a cigar or wine, or a martini bar. The downside of such establishments is that it is difficult to predict how much it will cost to run a bar that has such a specific target audience, because it depends on your ability to market the place, for which you should run a previous consumer research, or handle your clients, including the choice of drinks you can offer.
Legal concerns when opening your Bar
There are three common possible ways to open up a bar, which differ slightly as for insurance liability coverage mainly.
So before even thinking about loans and financial side of your business project, you should clarify what type of business structure you want to have and how it will affect on the cost of running your bar.
- Sole proprietorship seems to be the most common structure when it comes to small bar or speciality bar industry, because it requires the least amount of paperwork and has the lowest start up cost You just need to realize some basic procedures in the local tax agency and register your business according to the state and local regulations, in order to obtain a business identity number and start getting profits asap. The negative side of such a business entity is that all the legal responsibility lies on your shoulders as an owner of the bar.
- A partnership is second most appealing business structure among bar owners, as it seems less risky to share the investment or loss costs of a starting up a bar with someone. But you have to understand that in this case you will be legally responsible for any actions that the other person might take perjuring themselves and you at the same time. Many mistakes and surprises can be avoided if you take time to elaborate and review your partnership agreement.
A LLC or Limited Liability company has become a very popular option to set up a bar in food industry over the last decade, as its structure allows bar owners separate themselves from the bar as a legal entity. So if there were to be any legal claims or problems the owner would not be liable. The issue with the LLC is that it significantly affects the cost of starting up a bar because it requires more paper work and obliges you to pay a high fee to the State at the beginning and during the year. It also has a negative effect on the cost of running your bar in general as it implies paying more taxes.
How to keep your bar finances up to date
Managing a bar is far from being easy, specially if you are more concerned with the management and how the bar or the room is being handled. You can easily oversee new investment opportunities or unpredicted loss situations.
That is why contracting an accountant or having your own software in order to keep track of how much money your bar makes a day or a month is a very wise decision.
Financial software can help you to foresee possible expenses and predict profitable areas of growth.
Even if you have already contracted services of a consultancy or have your friend or a relative handling the bar’s income flow, it is always a good idea to have a structured and regular system to put your numbers into perspective and know exactly what is going on in your business financially.