But if someone else has a similarly named bar and it's far away, don't worry about it. Assuming the bar is established and ready to launch, there are possibilities for excess returns. Earlier, we mentioned the importance of investing in the right tools and systems for a smooth operation. You focus on these 11 essential elements of opening a bar: Long, detailed business plans are usually only required if you need funding from a bank. However, bar ownership is not for everyone—the long work hours, high startup costs and already saturated market mean opening and running a bar can be a considerable challenge. BONUS TIP: "Theme bars have higher costs of entry, so make sure your train-themed Little Engine That Could bar is going to succeed. You can have the best concept, but customers won't come if they don’t know you exist. A cocktail bar can have higher prices while a local neighborhood pub probably can't, Keep it simple. Check employee bags and packages when coming in and going out. A variable cost is a corporate expense that changes in proportion to production output. Running a business is no easy feat, but Square is here to help. Mismanaging your startup costs can be detrimental to your business, so how much does it cost to open a bar? Success in this business depends upon the owner and staff being able to manage the myriad of tasks and little details that add up to a great dining and entertainment experience for customers. It is widely accepted that bars can make between 200%-400% on drinks served, providing attractive margins for bar owners. Additionally, having analytics software allows you to evaluate your sales, look for trends, and better forecast inventory. Dismiss any employee who is caught stealing or breaking a law, with no second chances. Whether you manage a pub or nightclub, the challenges of running a successful bar go far beyond just keeping customers' glasses full. What furniture will you use? Focus on executing a small number of dishes to perfection rather than having a large menu that the cook staff executes inconsistently. Barriers to entry are the costs or other obstacles that prevent new competitors from easily entering an industry or area of business. Then visit them. Woodwork Restaurant learned the importance of these systems the hard way. However, these numbers are all based on averages and do not take into account the sweat equity needed to start and run a successful bar. All rights reserved. An added bonus of testing drinks is that a changing menu keeps your customers coming back for more. An easy way to generate buzz in the community and intrigue new visitors is to create a signature drink exclusive to your bar. To successfully run a bar, you need to use an effective inventory management tool for better visibility into what’s in stock and what needs to be ordered. Your research shouldn’t end there. For example, the bar & grill could host a pet adoption event in its parking lot one Saturday morning before the establishment opens for the day.