How Much Money Do You Need to Start Your Own Bar?
Drinks, music and atmosphere make bars popular places to relax after work or connect with friends and family. From sports bars to dive bars, thousands of establishments operate across the country.
However, owning a bar is a very different experience compared to simply enjoying one. Here’s a comprehensive breakdown of how much it costs to start a bar.
The Up-Front Cost of Setting Up a Bar
Launching a bar in the U.S. requires high up-front costs to cover property, licensing, permits, legal fees, equipment and inventory.
1. Securing a Space
One of the first and largest expenses is finding a suitable location. You’ll need to account for the cost of securing or building out your venue. Buying a commercial property is an option, with prices in the U.S. typically ranging from $175,000 to over $850,000, depending on location, size and condition.
In major cities, costs can be much higher, sometimes reaching into the millions. Renting is more affordable up-front but comes with ongoing monthly payments.
2. Licenses and Permits
Bars must be properly licensed to serve alcohol, and the costs vary significantly by state and local law. For example, in New York, an on-premise liquor license generally ranges from $1,000 to over $4,000, depending on the type.
The New York State Liquor Authority (NYSLA) oversees the process in the state, regulates the industry, enforces the three-tier system and provides guidance for businesses. Each state has its own licensing authority with different requirements and fees, so check the regulations in your area.
3. Equipment and Technology
Outfitting your bar goes far beyond tables, chairs and glasses. Essential equipment behind the counter includes commercial ice machines, refrigerators, draft beer systems, point-of-sale (POS) terminals and security systems.
Each of these major pieces can cost between $2,000 and $10,000, depending on quality, condition and availability. Smaller essentials, such as dishwashers, blenders or glassware, can add up quickly.
4. Furniture and Decor
Furnishing your bar with quality tables, chairs, bar stools and décor is another significant investment. For a small bar, you should budget $50,000 to $80,000 for furniture and major equipment, plus $5,000 to $10,000 more for redecorating or refurbishments. These figures depend on your desired ambience and the condition of the space when you take possession.
5. Initial Inventory
Before opening your doors, you’ll need to stock your shelves. If you’re aiming for a high-end cocktail bar, plan on investing in premium spirits, wines, and quality soft drinks and beer. Sports or craft beer bars should set aside more for a wide variety of brews, including non-alcoholic options.
The sheer number of breweries, over 9,000 in the U.S., means there’s no shortage of brands to choose from. Depending on the bar’s size and concept, budgeting $5,000 to $15,000 for initial inventory is reasonable, with adjustments as demand grows.
Ongoing Operating Costs
After your initial investment, you’ll face ongoing expenses. Below are a few of the most common.
1. Rent and Utilities
Rent is a major recurring cost, especially in popular locations or major cities. Utilities are another necessity — bars consume a lot of energy for lighting, heating and cooling, and refrigeration. As utility rates rise, households are expected to pay 9.6% more for utilities in 2025 than in 2024. Budgeting appropriately is more crucial than ever to maintain your business's financial health.
2. Payroll and Staffing
Your team is the engine of your bar. Payroll needs will fluctuate depending on business volume, but it’s important to budget for at least the minimum wage — the federal rate is $7.25 per hour, though many states set higher rates. Include salaries, payroll taxes and potential benefits if you want to attract and retain quality staff.
3. Maintenance, Insurance and Marketing
Set aside money, often around 25% of your inventory cost, for regular maintenance and unexpected repairs. Insurance is nonnegotiable and generally costs $1,000 to $5,000 annually, depending on location and coverage. Good coverage protects your investment against liability, property damage and other risks.
Marketing is vital for building your customer base. An effective marketing strategy, combining digital campaigns, social media and traditional advertising, will help drive traffic and foster loyalty. Budgeting around $1,000 a month for marketing is a good starting point.
Total Costs and Funding Strategies
A significant amount of money is typically necessary to start a bar. Realistically, U.S. bar startup costs typically range from $100,000 for a modest venue to several million dollars for a high-end concept or large space. Your exact figure will depend on location, size, target market, business model and personal vision.
Funding Your Bar
There are several ways to finance your bar. Some entrepreneurs use their own savings, which is the simplest if you have sufficient capital. Saving over time can pay off, as compounding interest helps your funds grow. Many online calculators can help you determine how much you’ll need.
If outside funding is necessary, options include SBA loans, traditional banks or private investors. Regardless of your approach, a detailed and realistic business plan is crucial.
Your plan should demonstrate understanding of your market and competition, outline projected costs and revenue, present a clear use of funds, and detail how investors or lenders will be repaid. A strong plan inspires confidence and improves your funding prospects.
Many new businesses struggle to survive their first year, often due to underestimating true expenses. Careful planning and budgeting are crucial for your bar’s long-term success.
Make Your Dream a Reality
Opening a bar requires significant time, effort and capital — but with careful research, diligent planning and a realistic budget, it’s an achievable and exciting goal.
The process can seem daunting, but breaking it down into manageable steps makes it less overwhelming. Little by little, you’ll move closer to owning the bar you’ve always dreamed of opening.
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