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Do you dream of opening a bar? Whether you’d love to own a lively sports bar or a swanky speakeasy, you may feel ready to take the plunge.
It’s a good time to do so. According to IBISWorld, industry revenue for bars and nightclubs in Canada has increased by an average of 11.3% annually over the past five years, reaching $2.9 billion in 2025. That’s even with shifting consumer preferences — Canadians are increasingly choosing to consume alcohol at home — and stiff competition from restaurants and other entertainment outlets.
Going to a bar is about much more than the drinks, after all. When you offer friendly service, create a great atmosphere and turn your bar into a local hub, you give people the chance to connect and share experiences. This step-by-step checklist covers how to open a bar in 2025 and maximize your chances of success.
How to open a bar: Your step-by-step checklist
- Conduct market research
- Research the licences and permits you need
- Research funding options for your bar
- Choose a concept and name for your bar
- Choose a location
- Create your business plan
- Choose the right bar POS system
- Find liquor suppliers
- Create a menu
- Manage your inventory
- Design your bar layout
- Buy the equipment
- Hire and train your staff
- Market your bar
1. Conduct market research
When first considering how to open a bar, you need to make sure you can stand out in a sea of options. Start with market research to understand the local bar landscape and explore recent shifts in consumer preferences. For example, an NIQ report showed sales of non-alcoholic beverages increased by 24% between 2023 and 2024. Offering mocktails and non-alcoholic beers can help you tap into that trend. Or take the espresso martini, which has been dominating social media and underscores the demand for elevated cocktails.
Analyze different types of bars in your area. Look at their menu, pricing and typical customer base. A wine bar that serves tapas caters to a different clientele than a pub where people watch hockey, and they each have distinct price points.
Here are a few examples to compare:
- Sports bars
- Cocktail lounges
- Wine bars
- Nightclubs
- Pubs
- Themed bars
Not sure where to start? Use this checklist to gather information:
- Target market: Is the bar packed with professionals enjoying happy hour? Is it a student favourite on Friday nights? Does it attract an elegant crowd?
- Bar type: What kind of bar is it? Maybe it’s a sports bar with lots of screens, a cocktail lounge with DJ nights, a wine bar with passionate staff, a buzzy nightclub, a neighbourhood pub or a uniquely themed bar. Take note of the details.
- Location: What is the neighbourhood like? Is the bar accessible by public transit? What is around it? Look for indicators that there’s strong foot traffic.
- Timing and seasonality: When does the area seem most vibrant? Maybe it’s when there’s a sporting event or on summer weekends when patios are open.
- Market saturation: How many similar places exist in the area? What about in the city? Can you envision people wanting more than one option, or does it seem like there are already too many?
- Opportunities for improvement: Pay attention to what’s missing or what could be done better, from more local craft beers on tap to late-night food options for people leaving nearby venues.
Choosing your niche is a big deal. It needs to make sense from a demographics standpoint, carve out a space in a crowded market and align with your expertise, whether you’re a master mixologist or a wine aficionado.
2. Research the licences and permits you need to open a bar
Since there isn’t a single liquor licence for the entire country, opening a bar in Canada means navigating provincial or territorial regulations. Get familiar with the rules in the province or territory where you intend to operate when researching how to open a bar, as they can vary:
Liquor licences and permits
- Ontario: Liquor licences and permits in Ontario are issued by The Alcohol and Gaming Commission of Ontario (AGCO). Licences are location-specific and moving location requires a new application. The application fee is $1,055 for a two-year term or $1,355 for a four-year term.
- Alberta: Liquor licences and permits in Alberta are granted by The Alberta Gaming, Liquor and Cannabis Commission. Class A licences apply to a liquor service in businesses open to the public, such as restaurants, pubs, nightclubs and bars. The application fee is $350.
- British Columbia: Liquor licences and permits in British Columbia are divided into distinct categories: restaurants need a Food Primary licence, whereas bars and clubs need a Liquor Primary licence. You’ll need to spend $2,200 on the application fee for a Liquor Primary licence and another $2,200 when the licence is issued.
- Quebec: Liquor licences and permits in Quebec are managed by the Régie des alcools, des courses et des jeux (RACJ). Costs are variable based on the capacity of your bar. You’ll also need an occupancy permit in Montreal to conduct commercial activity in the city. Note that many application forms are only available in French.
Unlike liquor licences, which are issued by provincial or territorial boards, food safety permits are municipal/regional. You’ll have to contact your public health unit to get one. Your staff will also need responsible alcohol service training. Again, the requirements vary based on your province or territory. Here are a few examples of the permits or training you may need to have in place to open a bar in Canada:
Food safety permits
- British Columbia: In British Columbia, you’ll need a Health Operating Permit, which you can obtain through your health authority.
- Alberta: In Alberta, you can apply for a food permit through Alberta Health Services.
- Ontario: In Ontario, you’ll be working with your city or regional public health unit, like Toronto Public Health.
- Quebec: In Quebec, food permits are issued by the Ministère de l’Agriculture, des Pêcheries et de l’Alimentation du Québec (MAPAQ) but you don’t go through a local health office the way you would in Ontario.
Responsible alcohol service training
- British Columbia: Staff must complete a Serving it right course.
- Alberta: Anyone selling, serving or delivering alcohol needs ProServe liquor staff training.
- Ontario: The standard training program here is Smart Serve.
- Quebec: Staff must go through the Service in Action program.
3. Research funding options for your bar
Opening a bar isn’t cheap. Beyond licences and permits, you’ll need capital to cover costs like potential renovations, kitchen and bar equipment, furniture and décor and inventory. You’ll also need to hire employees.
Research funding options to ground your vision into reality. Will you be using personal savings? Applying for a small business loan or looking into a business line of credit? Other routes include private investors, which may want to partner with you or own shares of your bar.
Government grants can also help you get your business off the ground. For example, the Canada Small Business Financing Program is open to Canadian businesses with annual revenues of $10 million or less.
There are also provincial funding programs available, such as Investissement Québec, and resources like Small Business Centres Ontario, which provide access to funding and assistance with grant and loan applications.
If traditional funding routes don’t work out, there are other options, such as crowdfunding platforms, community investment groups and even vendor financing from beverage suppliers like breweries or distilleries that want bars to carry their products.
4. Choose a concept and name for your bar
Now that you’ve identified your target market, wrapped your head around important regulations and looked into financing, it’s time to choose a concept and name for your bar. Your vision should be based on the people you want to reach and any gaps you’ve found in the market in your area. Let’s say that an up-and-coming neighbourhood with new condo developments is attracting younger people with spending power, but there are no trendy bars around. You may think a fun champagne and burger bar would be a hit.
You might open a gastropub near a music venue to provide concertgoers with a mid-range place to grab a bite and drink before a show, or you might envision a small wine bar in a residential area. Whatever you pick, build your brand around your concept, from the décor to the menu and everything in between. If you import wines from female-owned wineries around the world, tell the owners’ stories on the menu. If you want people to feel at home in your pub, furnish it with cozy seats that go with an eclectic décor filled with thrifted treasures and host trivia nights to build a sense of community.
Come up with a name that’s easy to say, fits the mood of your bar and will make people want to come in. You’ll need to create a website for your bar, so verify availability and register your domain before settling on a name. Conduct a Nuans search the Canadian government’s business name and trademark search tool) to make sure the name is not taken by another business, and consider trademarking for extra brand protection.
5. Choose a location
Location can make or break the success of your bar, so weigh up your options carefully. Foot traffic is everything when thinking about how to open a bar— look for pedestrian-friendly areas that attract crowds. Easy parking and public transit access also widen your reach.
Even if your bar is accessible to people from different areas, you still want it to stand out in the neighbourhood, and it can also benefit from being located near complementary businesses. For example, a craft beer bar could thrive next to a stadium. But if you’re the third craft beer bar in a two-block radius, you might want to reconsider your location or find a fresh twist to grab the attention of customers.
Just because you love a location doesn’t mean that it can operate as a bar. Consider municipal requirements and make sure that the space is in a zone that allows alcohol service before signing a lease.
6. Create your business plan
A bar business plan solidifies your vision and position in the market, maps out a viable path to profitability and can be used to secure funding. Start by identifying your ideal customer, from demographics and lifestyle to spending habits. Flesh this out in detail, as it will influence every aspect of your business and every choice you make, from your location to your menu and marketing strategy.
Include financial projections such as how much you expect to spend on startup costs like licences, renovations, equipment and initial inventory. What will your monthly expenses roughly look like between payroll, rent and marketing services? Calculate your break-even point, which is the stage at which revenue equals costs. This will help you understand how many sales you need to make to turn a profit.
Since rent is one of your biggest fixed costs, you’ll want to negotiate lease terms that account for renovation time and rent increases. Ask about your renewal options, and get a lawyer to review the lease before you commit.
7. Choose the right bar POS system
A POS system for bars can speed up service through features like tab management, bill-splitting and built-in tipping. Look for a POS that lets you easily manage different menus and add items, which comes in handy when you have happy hour pricing or other specials.
A POS system also acts as a central hub to help manage operations effectively with sales and inventory data syncing in real-time, and integrating with tools like accounting software or staff scheduling platforms.
Look for a reliable bar POS that feels intuitive to use, whether you’re a new hire or a less tech-savvy team member. It needs to include easily accessible technical support if any issues arise, since you don’t want to find yourself unable to take payments on a packed Saturday night.
8. Find liquor suppliers
Finding the right liquor suppliers to stock your bar is another foundational step. Again, there are regulations to navigate. In most provinces, alcohol must be purchased through a government-run distributor, like the SAQ in Quebec, the LCBO in Ontario and BCL in British Columbia.
But some provinces also allow private wholesale for specific products. For example, if you want to offer a highly curated wine list, you can work with a private agency to purchase imported wines.
When shopping around, compare pricing and product range and keep factors like delivery frequency, minimum order quantities and bulk discounts in mind, as they can affect both your operations and bottom line.
Always keep records of all purchases and sales — a bar-friendly POS system like Square can automate that process for you — to meet provincial liquor control requirements and avoid penalties in the event of an inspection.
9. Create a menu
It’s time to flex your creative muscles and create your menu. Imagine your ideal client browsing your offerings. What kind of signature drinks and staples do you want them to discover? Will you be serving food or offering food and drink pairings ?
Danforth Sidebar leverages its food offerings to attract people outside of concert nights (the bar shares a wall with the iconic Danforth Music Hall). “We’ve done a lot of work to keep elevating our food program and keeping that quality up,” says general manager Ben Rickerby. “The food gives someone a reason to go to Sidebar for dinner or date night even when there’s not a show. We are so well tied to the music, but I think we still have to kind of build our own brand too.”
Think strategically, too. A well-designed menu can attract new customers, like when a guest posts a picture of a beautiful and unique cocktail on social media, or it can boost repeat visits with seasonal and themed specials that are only available for a limited time. Don’t forget to balance practicality with creativity and factor in the price of ingredients.
10. Manage your inventory
As a bar owner, managing inventory can get complex. You need to estimate the amount of drinks ordered every night and figure out how much alcohol and other ingredients you’ll need.
A bar POS like Square includes inventory management tools or integrates with popular inventory software. You can manage stock in real time and see exactly what’s being used and when. You get daily stock alerts and can set up automatic processes like reordering items when quantities get low. Analytics help you forecast inventory more accurately to cut costs and prevent waste.
With the right tech and data, you can track pour costs and spillage as well as train your staff on best practices like the first-in, first out (FIFO) principle, where you use oldest inventory items first and keep fresher ones for later.
11. Design your bar layout
Your bar layout can optimize workflows and enhance the customer experience, like when you place the bar in a way that gives bartenders a good view of incoming guests. To maximize efficiency, keep tools, glassware and ingredients like bitters and garnishes within easy reach.
Map out the customer flow to make sure all paths are clear for both servers and customers, and that there’s plenty of comfortable seating. Go through the steps a customer would take once they enter the bar, from the main entrance to the bar area or a table, and from the dance floor to the bathroom. Have people walk around and ask for feedback. Take fire, safety and accessibility standards seriously to ensure the safety and comfort of your team and patrons.
12. Buy the right equipment
With a solid plan in place, you can buy necessities like bar counters, refrigeration, glassware, ice machines or draft systems. If you’re unsure where to start, a bar equipment list helps you make the most of your budget and invest in durable, commercial-grade appliances and accessories, such as energy-efficient refrigerators and high quality cocktail shakers.
Prioritize purchases that impact the customer experience and your operations. For example, you don’t want your ice machine to break down, so it’s worth investing in a reliable one. But you might decide to save on glassware by starting with basics and upgrading later.
Keep your menu in mind to help you identify where to focus your budget. Maybe you’ll need blenders for frozen cocktails and a high-quality espresso machine to serve coffee, or maybe you’ll focus on getting a commercial-grade wine cellar to preserve bottles.
13. Hire and train your staff
Hiring employees is an exciting milestone. The team you choose will shape the customer experience and influence word-of-mouth and online reviews. Here are a few of the roles you might consider hiring for:
- Bartenders: Mix and serve drinks, engage with customers and maintain and manage the bar area.
- Servers: Provide table service, taking orders and bringing drinks and food from the bar and kitchen.
- Barbacks: Assist the bartender by prepping ingredients, restocking or cleaning.
- Host/hostess: Manage reservations, greet customers and seat them.
- Security personnel: Check IDs, manage crowds and maintain a safe environment.
- Manager: Oversee all staff scheduling and training, daily operations, inventory management and send reports to the owner.
- Kitchen staff (if applicable): Prep, cook and plate food and keep dishes and glassware clean.
Train your staff for success. Focus on great customer experiences and responsible alcohol service. Make sure everyone knows the menu well. Brief all team members regularly and use systems that make it easy to keep track of changes and specials. Square’s bar POS syncs all data in real-time to save time and reduce errors, and, if you serve food, the Kitchen Display System (KDS) keeps communication flowing between the front and back of house.
14. Market your bar
These days, social media can turn your bar into a hotspot. Share engaging content that showcases what makes your concept unique, from photos of eye-catching cocktails to videos of the vibe on busy nights. Create a sense of community with events, happy hours or theme nights, from hosting trivia night at a pub to guest DJs at a nightclub.
Set up a Google Business profile to show up in search results and on Google Maps, as people often research terms like “bars near me” when looking to go out. Get involved with your community to put your brand in front of new audiences, from sponsoring events to teaming up with other businesses for joint promotions or inviting local influencers to visit your bar.
Reach out to local media to share your story or any special initiatives you’re working on. Getting featured on a list of the best bars to discover can put your bar on the map.
Build relationships with customers to encourage repeat visits. Tools like Square Marketing and Square Loyalty help you stay connected with your customers through incentives, promotions and targeted email campaigns.
Opening a bar takes more than a passion for mixology or nightlife. But if you follow the steps above, you’ll have laid a solid foundation for success.
How to open a bar FAQs
What age can you open a bar?
To open a bar, you must be of legal serving age, which is generally the same as drinking age. In Canada, you can legally drink at 19 in most provinces and territories, except in Alberta, Manitoba and Quebec, where the drinking age is 18. Note that in Ontario, you can serve alcohol at 18 even if you haven’t reached drinking age yet.
How much does it cost to open a bar?
How much it costs to open a bar varies greatly based on the commercial space you occupy, the real estate prices in your area and whether you’re leasing or buying. To give you an idea, recent Toronto listings show a pub on the market for $450,000, while a nightclub lease is listed at $27,175 per month. In a smaller city like Ottawa, commercial spaces are more affordable — a monthly lease for a restaurant in the downtown core can range between $7,000 and $15,000.
While real estate is the biggest factor influencing the cost of opening a bar in Canada, you’ll also have to budget for furniture and decor, kitchen and bar equipment and potential renovations, which can add tens of thousands of dollars to your initial investment.
Liquor licences and permits can cost between $350 and $2,200 depending on your location. And you’ll have to account for ongoing expenses like payroll and marketing.
How long does it take to get a liquor licence?
The provincial agencies in charge of liquor licences don’t always give firm timelines. According to Falcon Law, getting a liquor licence can take about 10 to 12 weeks in Ontario. In Alberta, the AGLC licensing portal notes that it can take four weeks to process applications. Give yourself extra time and apply a few months early, as there are steps like inspections, public notices, floor plan reviews and background checks, which can all affect the speed of the application process.
Are bars profitable?
Yes, bars in Canada can be profitable, but the profit margins tend to be thin. According to recent Statistics Canada data, operating expenses for the food services and drinking places subsector rose 13.3% year over year in 2023, pulling the operating profit margin down to 3.6%.
Maximizing efficiencies is necessary as a bar owner. An integrated bar POS like Square can help you and your team work smarter, protect your bottom line and deliver experiences that keep customers coming back.
