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Opening a bar is exciting, but without a clear understanding of startup costs, even the best concepts can struggle to succeed. Careful financial planning helps you set realistic expectations, avoid overspending, and build a business that lasts.
Startup costs for a new bar range drastically from £20,000 to £1million. These figures cover everything from licensing and build-out to staffing and marketing, with the most impactful factors on cost being location, bar type, and size.
Before diving in to the detail, here are the key elements that will shape your bar costs:
- Bar type and concept
- Staffing and training
- Location
- Licenses and equipment
- Marketing and technology
Understanding bar startup costs
When planning your budget, it’s important to separate one-time expenses from ongoing operating costs:
- One-time costs include licensing and permits, lease deposits, renovations, design, and equipment purchases.
- Ongoing costs include rent, payroll, utilities, inventory, and marketing.
A healthy budget balances both. Underspending upfront may save cash in the short term, but risk long-term sustainability if equipment breaks down, staff turnover is high, or your venue can’t keep up with demand.
Key cost drivers by bar type
The type of bar or pub you decide to open influences the size of the space you need as well as other costs. Here are a few bar options you can consider:
Sports bar or pub
Sports bars or pubs are usually found in dense areas of a city and serve as a great spot for large groups to meet up, watch a match and hang out. Beer is the primary focus for sports bars, but many also have spirits and wine. Food is typically served which can be a major cost driver in addition to entertainment such as TVs, pool tables and dartboards.
Space and seating can also be big startup costs, however a more relaxed interior can help to keep the total down. Most sports bars have busy hours that align with games, so revenue is typically higher during major sporting seasons.
Wine bar
A wine bar is an elegant establishment where people can come enjoy a variety of wines and light appetisers in smaller groups. The focus of the wine bar is usually on the bar itself, with limited seating in a cosier space. Sommelier staff and premium wine inventory drive up costs but can allow for higher margins.
Cocktail bar
Known for their hyperlocal environment and mixologists that craft exquisite masterpieces, cocktail bars have become wildly popular to open up. Limited seating space creates an intimate vibe, alluding to exclusivity. However while you may reap the benefits of renting a smaller space, the interior design and ingredients are higher-end and therefore more costly compared to other bar types.
Nightclub
A nightclub is an establishment for nighttime entertainment like live music, DJs, and dancing. You should look for an outsized space that can generally accommodate a larger group of people. Nightclub owners spend a good portion of their money on decor, lighting, and a variety of staff including security, front-of-house, cleaners and bar staff. In most cases, a nightclub requires the most funds when getting off the ground.
Your dream bar could also fall somewhere in between these categories, and that’s okay. The most important thing is to determine your target market and then understand what elements you need to make that bar successful.
Factors that influence bar startup costs
Leasing, buying, or building a bar
Leasing an existing bar space can be more cost-effective than building from scratch, especially if it comes with pre-installed plumbing, bar fittings, and kitchen facilities. Buying or renovating requires larger upfront investment for décor, supplies, technology, and furniture.
Location
Location drives both startup and ongoing costs. City-centre bars face higher rent, licence fees, taxes, and staffing costs but benefit from more foot traffic. Suburban or regional locations typically have lower running costs but may require heavier marketing to attract customers. Either way, the location costs can vary, with rent typically being the biggest contributor.
Food service vs. drink-only establishments
Bars that also serve food need kitchen equipment, chefs, and food safety licences. While costs are higher, food service can increase revenue and help capture lunch and dinner trade.
Bar operating costs
Monthly overheads include utilities, insurance, cleaning, and waste disposal. Don’t forget entertainment licences for TV, music, or live performances. These can add significant costs but are essential for certain concepts, such as sports bars or nightclubs.
Technology and equipment
Essential purchases include glassware, refrigeration, mixers, and cleaning equipment. A dedicated bar point-of-sale (POS) system) is also vital for managing tabs, split bills, inventory, and sales reports while keeping the payment process ultra-smooth. Look for a payment processing solution that accepts any form of payment, so you aren’t losing out on potential customers. This includes being able to accept cash as well as magstripe cards, EMV chip cards, and mobile payments like Apple Pay. By integrating a seamless POS alongside other tools, you could make a major improvement to revenue – London’s oldest wine bar, Gordon’s has saved over £10,000 with Square.
Professional service costs
Plan for legal and licensing support, accountancy or bookkeeping fees, and insurance (liability, property, workers’ compensation etc.). These professional services protect your business and help you stay compliant.
Funding options
Most bar owners use a mix of funding sources. Common options include traditional bank loans, Square Loans, investors, crowdfunding, or personal savings. Weigh the repayment terms and ownership implications carefully.
Hiring and training staff
The number of staff you hire, and the roles they take on, will significantly affect your bar’s costs.
First, you want to think about the bar manager. Some owners take on this position themselves when first opening, while others hire a trusted individual to help drive the bar’s success from the outset. A good bar manager should have industry experience – ideally in the type of bar you’re opening – so that they can oversee purchasing, manage bar inventory, and keep operations running smoothly
Behind the bar, you’ll need bartenders who are legally licensed to serve alcohol, as well as bar runners, who keep things moving by cleaning, restocking, and maintaining supplies throughout the night. You’ll also need to hire kitchen staff including sous chefs, line cooks, and servers if you plan to offer food.
Speciality bars, like wine bars and cocktail bars, may require additional industry experts like sommeliers and mixologists.
You should decide how much to pay your employees in advance and keep rates consistent across roles. Hourly wages are common for bartenders and servers, while managers, sommeliers, mixologists, and chefs are more likely to be salaried.Once you hire your employees, the next steps are to onboard all staff members, set up payroll so everyone can get paid, and think about the training that each will need to complete their roles effectively Integrating Square Team Management with your POS system is the simplest way, and allows new hires to hit the ground running.
It takes less than a half hour to onboard the staff on the POS system. People who have come from other POS systems say that the Square system is by far the easiest to use.”
Joss Webber → Owner, The Pigs Nose Inn
Marketing costs
Without a strong marketing plan, even the best-run bar can struggle, but initial efforts can get pricey. It’s important to understand which marketing channels are available to you and come up with a custom strategy that aligns with your goals.
Start with hyperlocal tactics that pull new, local customers into your bar and build brand awareness. These include social media, review platforms, and local advertising. Paid digital ads and events can also boost visibility. Finally, use email marketing tools like Square Marketing to expand your customer reach, automate campaigns, and track results in real-time.
Bar startup cost FAQs
How much does it cost to open a bar in the UK?
Opening a bar in the UK can cost anywhere between £20,000 and £1 million, depending on the size, location, and concept. Smaller neighbourhood bars are at the lower end of the scale, while city-centre nightclubs and large venues with entertainment facilities can reach the upper range.
What is the cheapest type of bar to open?
The cheapest type of bar to open is typically a small, local neighbourhood bar. These venues keep costs down by operating in smaller spaces with lower rent, minimal décor, and basic equipment. They focus on inexpensive drinks and don’t require costly entertainment systems or extensive renovations, making them much more affordable than cocktail lounges, wine bars, or nightclubs.
Do I need a licence to run a bar?
Yes, you need several licences to legally run a bar in the UK. The most common include:
- Premises licence – allows alcohol sales from a specific location
- Personal licence – held by the designated supervisor to authorise sales
- Music and entertainment licence: to play recorded or live music
- Gaming machine permit – for slot or fruit machines
- Television licence – if showing TV or live sports
- Food hygiene certificate – required if serving food
What are the monthly costs of running a bar?
Bar monthly running costs vary widely, but generally include rent, staff wages, drink and food stock, utilities, insurance, licensing fees, cleaning, and marketing. Location, size, and staffing levels have the biggest impact, with small bars in suburban areas costing far less to operate each month than large city-centre venues.
Are pubs profitable in the UK?
Yes, pubs can be profitable, but success depends on strong management and a clear business model. Figures from 2023 indicated that a typical pub in the UK had a profit margin of around 12.5%, though this varies with location, operational efficiency, and customer offering. Many profitable pubs increase earnings by offering food, events, or accommodation alongside drink sales.
The cost to open a bar ultimately depends on how you decide to allocate your spending within these five categories. So before you dive in, assess the specific costs for your bar and create a realistic budget. Be sure to include your assessment and analysis in your bar business plan, so you have a place to reference your goals. Then make sure you follow that budget to the letter.
