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How to Start a Bar/Club

How to Start a Bar/Club

Be the toast of the town, the life of the party--and a successful entrepreneur? Yep. You can have it all when you open a bar.

Entrepreneur Magazine

Across the country, this is probably the most popular type of bar you’ll find. There are a lot of neighborhoods out there, but you might find that there is room for one more in your area. According to the experts we interviewed, the startup cost for this kind of bar ranges widely, depending on the size and concept, but mostly on location. You can buy an existing neighborhood bar in a small town for $20,000, or you can spend a million dollars building a brand-new one in a big city. Not coincidentally, the amount of revenue these businesses produce varies greatly, depending on your bar’s location and capacity.

Sports bar. Depending on the establishment’s capacity, sports bars can be a specific version of the neighborhood tavern, or they can take on a life as big as a club. You may have the latter in mind, but your market research may point to the former. It’s important to do your homework!

Generally, sports bars offer some kind of menu options, such as sandwiches, burgers, pizza, sandwiches and appetizers. Since the main attraction is sporting events, sports bars have televisions in view of every seat, sometimes all tuned to different channels. Audio and video technology comes into play, with some owners spending a large percentage of their revenue on keeping up with the latest in technology—from satellites to big-screen TVs. As with neighborhood bars, startup costs and revenue potential vary widely, depending on the size, concept and location.

• *Brewpub or beer bar.* Studies have shown that although consumers are drinking less alcohol, their tastes are becoming more discriminating. As a result, microbrews are more and more popular. In a brewpub, you can brew your own beer right on the premises. In a beer bar, you can offer a large selection of different types of beer, including microbrews produced elsewhere. It’s often easier to get a liquor license for a brewpub or beer bar than a full-scale liquor license, since you don’t need a fully stocked liquor bar.

Most brewpubs only sell their own beer options on tap (draft beer), with a few selections of bottled beer options, too. Since you’re creating your own product in a brewpub, you also have the ability to control what you make and sell – from quality to quantity. The startup costs of a brewpub can be quite high – from $100,000 to $1 million—because of the brewing equipment you need to have. If you produce a popular beer, you have the opportunity to grow into a very successful operation.

Beer bars tend to have lower startup costs, which can often mean obtaining a less expensive, fixed-price license from your state government. Beer bar startup costs range from about $20,000 to $100,000, depending on size and location. The revenue potential depends on the geographical location and drinking trends in the community.

Specialty bar. Specialty bars, which concentrate on one type of libation, from wine to martinis, or theme, like cigar bars, are gaining popularity. Although some specialty bars focus on only one drink category, there must be a wide variety available within the genre. Take martinis: They have become very popular due to the variety they offer. The traditional martini still has a solid appeal if made with quality vodkas and gins, but other mixes, like sour apple martinis, have expanded the martini-drinking base, especially among women. But even with their increased popularity, martinis are still looking up at wine.