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How to Start a Bar or Club Business

Opening a bar, nightclub or pub business is a great way to give your customers the perfect place to meet, drink and socialize. The combination of a good location, friendly staff, great selection and the right ambiance can really help set you apart and make your bar successful.

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    Plan Your Bar or Club Business


    Before you start your business, there are a few key areas you need to focus on. You will need to establish whether there’s a demand for your bar or club business services, look at potential benefits and pitfalls, understand how your business finances might look, and ensure everything is in order.


    In short, you need a business plan — here’s how to think about your business idea.

    Do Market Research and Validate Your Bar or Club Products and Services

    Before you launch your bar or club business, you need to understand if there’s a demand for what you’re selling. That means carrying out market research and “validating” your products and services. Here’s how to go about it:

    Find market research reports for bar or club businesses


    These types of businesses rely almost completely on locality and location, so understanding the residential and tourism markets in your region is critical.

    Check out your competitors in the space

    Having competitors is a good thing as it shows there’s a market. Additionally, in the bar and club scene there’s generally plenty of room for a niche establishment that provides a unique reason for customers to drink there.

    Talk to patrons

    Speak with potential customers to understand what they want from your bar or club and find out what’s currently missing in the local area.

    Identify your business’s unique selling points (USPs)

    These are the areas that will set you apart from competitors and encourage customers to come to you. This will mainly be driven by the type of bar or club you choose to run.

    Get involved with business communities and discussion groups

    Ask questions about bar or club businesses and meet up with other owners. You can find links to some excellent discussion groups later in the article.

    Understand Your Bar or Club Business Model and Financial Projections


    All businesses need a business model, which details the way you will generate sales, provide services and make money. Think about your business model now, because it’s better to have that in place so you can start acquiring customers and generating revenue from day one.


    You will also need to look at financial projections for your bar or club business. What are your expected sales and revenues? What is your profitability? How much money will you keep in the business to grow it? How much will you pay yourself and others? If you can, try to plan your revenue out for the next month, three months, year, and two years.

    Write a Business Plan for Your Bar or Club Business


    Finally, you should put your business plan together. Business plans do vary slightly, but they should cover the following areas:

    01

    An executive summary with the most important points from your business plan

    04

    An executive summary with the most important points from your business plan

    07

    How you will market and sell your offerings

    02

    Your goals and what you hope to achieve with your bar or club business

    05

    An overview of how your handyman business is structured

    08

    Financial projections, revenue and profitability

    03

    A description of your business, background information, and contex

    06

    Your business model

    09

    Appendices

    We’ve got the perfect guide to writing your business plan.

    Right Business Structure

    Setting up Your Drinking Establishment

    Once you've legally created your bar or club business you’ll need to get some other things in place.

    Your Bar or Club's Location

    Where are you going to run your business? Will you work from home, get an office, use a shared working space or something else? In most cases, unless you are planning to store products, it’s best to start an Amazon business from your home.

    Marketing a Bar or Nightclub

    You will probably need to build a website and should also get professional branding, marketing and business cards.

    Employees

    You will almost certainly need to hire employees to help you out. Staff turnover in the bar and club business tends to be high and positions are not very well-paid, so expect to always be on the lookout for new servers and bar staff.

    Equipment Needed

    Running a bar or club is all about the furniture, fixtures and fittings. You’ll need to outfit your space first and then develop a good inventory of the stock you’re going to be selling. Depending on what your bar does, you may need other specialized equipment like commercial cooking and kitchen facilities or brewing gear.

    The Complete "Start Your Business" Checklist

    A Clear and Comprehensive Guide to Starting Your Business the Right Way

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      Requirements for Maintaining Your Bar Business

      There are certain forms and legalities you need to follow to keep your business in good standing.

      1

      File an Annual Report

      Most states require all businesses to file a report once a year. This report has details of any major changes to who owns a business and other major impacts on a business’ legal status. We can file your Annual Report on your behalf.

      2

      Pay Estimated Taxes

      You will be expected to pay estimated taxes on what you plan to earn in the current business year. Typically, you will need to pay estimated taxes in April, June, September and January (of the following year).

      3

      Renew Business Permits and Licenses

      Your business will probably have several licenses, permits and other regulations. These typically need to be renewed every year.

      4

      File Your Taxes

      You will need to file your taxes once a year.

      5

      Pay Payroll and Sales Taxes

      If applicable, you will need to make payroll and sales tax payments on a regular basis.

      6

      Prepare Your Taxes

      You will need to work with your accountant to prepare all the taxes you need to pay.

      Hiring Employees for your Bar, Nightclub, Pub, or Other Drinking Establishment

      Since you won’t be able to run your bar or club solo, you will need to hire employees. Additionally, because bar and server wages are typically very low and supplemented with tips, expect to have a fairly high staff turnover. This could mean you spend a lot of time interviewing and hiring. See our 10 tips on hiring employees.


      Your bartenders will be mixing and pouring drinks, which means their speed, efficiency and pour accuracy will all have a direct impact on your profitability. For that reason, it's vital to train your bartenders well. Be aware that both over-pouring and theft can be fairly common in the bar and club industry, so try to hire people you know you can trust.

      Report employees as "new hires"

      In most cases, you will need to report the hiring of employees to your state.

      Pay employees

      On a raff and workers typically receive a low hourly wage which is supplemented by tips from patrons.

      Get worker's compensation insurance in place

      As listed above, you will need to make sure you have proper worker compensation insurance to cover injuries, illness, medical costs and the like.

      Make sure your employees can work in the U.S

      Your employees must be legally able to work here. Carry out background checks and ensure they have any necessary legal documentation.

      Get an Employer Identification Number (EIN)

      Contact the IRS and let them know you will need an EIN for your bar business. This is a number you will use to file and pay your taxes. We put together this guide to getting your EIN.

      Withhold income and payroll taxes

      You will need to calculate and keep back income tax so you can pay the appropriate bodies. You will also need to pay the employer portion of the payroll tax.

      Learn about legal requirements

      You do have certain responsibilities and requirements for hiring employees. In addition to getting a proper employment contract in place with them, you have a duty to provide them with a safe working environment, proper training, regular pay and certain other criteria. OSHA covers your health and safety requirements, while the U.S. Department of Labor provides information on other responsibilities.

      Useful Online Tools for Your Restaurant Business


      Here are some really great online tools for managing your restaurant business. They will reduce the time you spend on administration, help you to collaborate with others and free up your time to grow and manage your new venture.

      Project Management

      Productivity

      Marketing Automation

      Customer Relationship Management (CRM)

      Customer Support

      Human Resources

      Website Development