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 01, 2021 — 5 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 swanky lounge or a laid-back sports bar, 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 natural business demeanour.

This guide helps you put your daydream into action and lays out everything you need to know about how to open a bar.

A Checklist for Opening a Bar

Here is a checklist of the actions to take before you open your bar’s doors.


The Economics of Opening a Bar

Every aspiring bar owner dreams about a popular establishment that makes great money for their pocket. But before you jump ahead, you have to plan for the startup costs of 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 minimize your costs from the get-go?

Don’t overthink your drink menu. Create a simple menu by offering a few drink options. Complex drink lists often fluster customers and create more inventory to carry.

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

Minimizing waste at your bar can save quite a bit of money. Spilled drinks, drinks made incorrectly, and spoiled ingredients are considered waste and can really add up. If you see a rising trend in these, it might be time to reassess employee training.

Bar Technology

Guests at your bar expect short wait times and quick service. Lousy payment systems with painstakingly slow processing times won’t cut it, so it’s important to invest in a robust POS system for your bar.


Your point-of-sale system should be integrated with a payments processor and use hardware that can take any form of payment, whether it’s cash, magstripe card, EMV chip card, or mobile payments (like Apple Pay).

Additional POS 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:


Visit our Square for Restaurants POS Demo page  to see how we make running a bar easier.

Understanding Inventory

After you open a bar, it’s time to talk to suppliers about ordering inventory.


Start off by determining what type of alcohol you need. Whether you’ve decided to serve beer, wine, liquor, or a combination of the three, most bars offer three levels of quality in their selection: well/house, call, and premium.

So 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.

Next, evaluate your drink menu and create an ingredient list of additional items you need, aside from the alcohol. This gives you a better idea of your inventory’s breadth and where your ingredients overlap.

Now it’s time to think about how much to order. You need to forecast the amount 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 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 grow in popularity, you start to reap the benefits and see your bar profit. But you can also actively tweak 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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