There are currently over 59,000 registered bars and nightclubs in the United States — which shows steady growth over the past five years. If you’re a lover of food and drink keen to open your own bar, you’re likely excited yet daunted by the prospect. With careful research and hard work, however, you’ll be in the right position to start a profitable and successful business.
Get the right licenses and permits
Research the licenses and permits you need to open a bar in your chosen area. It can often be difficult or expensive to obtain a new license in some cities or counties. In San Francisco, for example, getting a new bar license is virtually impossible, so most people purchase an existing bar that already has a license. If you’re able to get a liquor license, you’ll need to determine the type you need — this varies on jurisdiction and bar (cocktail bar, food, no food, entertainment, etc.). You’ll also need other licenses like a music license, health, and safety permit, food-handling license, and building permits if you plan on renovating.
Liquor liability insurance provides protection from the risks that inevitably come with serving alcohol to patrons. If a drunk customer gets into a physical altercation and harms another customer or drives home under the influence, resulting in injury or death, you could end up embroiled in a devastating lawsuit, and potentially found to blame. Although liquor liability insurance can be expensive, it’s well worth the investment to protect yourself from lawsuits that may leave you bankrupt. Workers comp insurance is another important consideration: it protects you financially if an employee injures themselves on the job. With this insurance, medical care, lost wages, legal fees, and settlement payments will all be covered.
Opening your own bar doesn’t come cheap. To make sure you can afford it financially, work out your initial starting costs, in addition to the ongoing costs of keeping the business running smoothly. Most budding entrepreneurs require capital to get things off the ground, and some rely on generous investors when first opening. Alternatively, you may want to consider taking out a business loan. In addition to covering opening expenses, business loans can also help later down the line for things like renovating or marketing.
Opening your own bar is an ambitious and complex, yet rewarding, endeavor. By researching licensing, insurance, and funding options, you can better ensure your chance of success.