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How much does it cost to start a bar?

Summary

Starting a bar can cost way more if you're starting from scratch. Total startup costs for a bar that rents or leases its location are estimated to be between $110,000 and $550,000, depending on the size. Already established bars for sale provide a potential owner with startup costs of as little as $25,000.

Summary

Starting a bar can cost way more if you're starting from scratch. Total startup costs for a bar that rents or leases its location are estimated to be between $110,000 and $550,000, depending on the size. Already established bars for sale provide a potential owner with startup costs of as little as $25,000.

Overall costs and breakdown of owning a bar

Owning a bar can be pretty profitable. Beer and ale represent 42% of the sales with hard alcohol at 31%.  And wine brings in another 10%.

The average revenue per employee for a bar establishment is roughly $75, according to Statista, making it an attractive business for an entrepreneur. But, there are over 65,000 bars in the U.S. alone, so it can get pretty competitive.  

From a profit and loss perspective, running a small indie bar would cost around $110,000 initially to rent and prep the place. Usually you’ll have to spend $4,500 for a liquor license (depending on where you’re at). You’ll probably need around $6,000 for inventory, bringing the total cost to roughly $121,000.

Once you’re open for business, you’ll probably have to spend around $13,000 on staff, $6,000 on rent., If we round up, you’re looking at monthly costs close to $20,000. 

How much money you can make owning a bar

What you can earn depends on size, location and other factors. But all that being said, some estimates you could make between $25,000 and $30,000 a week. This is assuming average-priced drinks of $8, average main dishes of $13 and average appetizers of $6. (which if you’ve been to any bar recently, tends to be the standard). 

Costs of buying an established bar

One way to reduce the costs of opening a bar is buying a space that is already established as a bar: Investopedia notes that buying an established bar can drop expected startup costs to as low as $25,000.

Buying an established bar gives you other advantages:

  • Infrastructure that reduces equipment and construction costs.
  • Insights on business potential based on the previous tenant’s performance.
  • Information on operating costs.

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