How to Open a Bar

How to Open a Bar
Whether you are a master mixologist or an enthusiastic entrepreneur, you may have questions about how to open a bar. This guide explains the essentials.
by Square Jan 02, 2021 — 6 min read
How to Open a Bar

As a creative entrepreneur and a social butterfly at heart, you may have always dreamt about opening a bar. Whether it be a bustling wine bar or a relaxed beer garden, the liveliness and social aspect of the industry have always captured your interest, and now you want to take the plunge.

Deciding to open a bar is exciting, but you probably have some questions. After all, the complexity of opening up can be tricky, regardless of your expertise or entrepreneurial nature.

This guide will help put your dreams into action and lay out everything you need to know about how to open a bar.


A checklist for opening a bar

Here is a detailed checklist of the actions you’ll need to take before you open your bar’s doors for the first time:

The economics of opening a bar

Every aspiring bar owner dreams about a popular establishment that makes them great money. But before you jump ahead, you have to plan for the costs and financial impacts of running your bar.

While the initial cost of your bar depends on the type of establishment you open, there are a few essentials every bar needs:


Unfortunately, expenses don’t just disappear once you open a bar. You need to think about operating costs as well. Examples of operating costs include:


All of these costs require careful oversight and management so your budget doesn’t balloon. So why not think about clever ways to minimise your costs from the get-go?

Don’t overthink your drink menu. Create a simple and flavourful menu by offering a few drink options, and don’t skimp on the classics that everyone enjoys. Complex drink lists often fluster customers and mean you need to carry a greater volume of inventory. You can also offer seasonal specialties or items on a regular basis. An added bonus of testing drinks is that a changing menu will keep your customers returning for more.

Use your POS analytics software to run regular sales reports in order to make cost-effective decisions when opening a bar. Use this data to assess which drinks are selling and which drinks aren’t, and then you can update your menu accordingly. You can also assess your busiest and slowest hours to create a more efficient employee schedule.

Minimising waste at your bar can save quite a bit of money. Spilled drinks, incorrect orders and spoiled ingredients are considered waste and can really add up, increasing cost in your profit and loss statement. If you see a rising trend in these, it might be time to reassess employee training.

Taking payments

Guests at your bar expect short wait times and fast service. Slow and cumbersome payment systems with painstakingly slow processing times won’t cut it, so it’s important to invest in a robust point of sale (POS) system for your bar.


Your POS system should be integrated with a payments processor and use hardware that can accept any form of payment, whether it’s cash, Visa, Mastercard, eftpos, American Express, JCB cards, or mobile payments (like Apple Pay and Android Pay).

Additional features designed for bar operations can improve your daily processes. Specific things to look for in a point-of-sale system for your bar include:

Understanding inventory

After you open a bar, it’s time to talk to suppliers about ordering inventory. A regular glance in your stock room to determine how much inventory you have may seem like a simple way to manage inventory, but the reality is that bar inventory can be a much more complex scenario.


Your first step is to determine what type of alcohol you need. Whether you’ve decided to serve beer, wine, liquor or a combination of the three, most bars offer a basic level of variety in their selection: house, on-tap and top shelf.

You may also want to consider what qualities of liquor you plan to offer. For example, if you are making a drink that is vodka based, you can offer three different brands of vodka to your customer. You can also apply this to wine: Have three different kinds of pinot noir on the menu, so customers have options at different price points.

Your next step is to evaluate your drink menu and create an ingredient list of additional items you need, aside from the alcohol. This may include mixers or ingredients for cocktails, such as syrups or fruit. This gives you a better idea of your inventory’s breadth and where your ingredients overlap between different beverages.

Now it’s time to think about how much to order. You need to forecast the volume of drinks ordered each night for the week and calculate the alcohol and other ingredients that will be used. This may be difficult when first starting a bar, but after the first week you can use your POS analytics to forecast inventory on an ongoing basis.

While it may be tedious, you should keep a close eye on the inventory life cycle and learn how to improve your inventory at the bar to cut costs and prevent waste.

Making money at your bar

With everything laid out, you may begin to wonder how much money a bar owner makes. When first starting a bar, the money you make is likely to go right back into running the bar. And that’s okay.

As you begin to build your brand and watch your bar’s popularity increase in the local area, you start to reap the benefits and see your bar profit. But you can also actively make adjustments to your day-to-day operations to boost your profits:


The Bottom Line is brought to you by a global team of collaborators who believe that anyone should be able to participate and thrive in the economy.


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