How to Start a Bar/Club

As we've discussed, the bar/club industry can be a pricey undertaking. Because of the high failure rate, you may come across desperate bar owners willing to take a low purchase price just to get out of the business. You'll also find that startup costs for bars vary depending on size, location and target market. So we can't give you a concrete amount for what you can expect to pay to start your business.

We spoke with one entrepreneur in California who spent $25,000 taking over someone else's bar business. Another bar owner in Florida spent several million dollars starting his club (and he didn't even build the building!). The numbers vary all across the board. Your bar's size, location, type and concept will make your startup costs as individual as your business.

However, the chart below will give you some idea of what you'll be looking at--from the low end to the high end. Again, you could buy an existing bar that would nullify all the numbers on our low-end chart or start a large-scale club that's off the map from our high-end numbers. You'll have to do some research to find out what your bar will cost based on your concept, size and location.

Here are the startup costs for two hypothetical bars. The first, Night Owl, is a tavern with a maximum capacity of 100 people and serves only beer and wine with a limited menu. Night Owl has annual sales of $327,416. The second, Neverland, is a 1,000-person-capacity nightclub with a full-service bar. Located in the downtown area of a metropolitan city, Neverland has annual sales of $976,132.

Expenses Night Owl Neverland
Rent (security deposit and first month) $3,250 $6,125
Leasehold improvements (heating/air conditioning, electrical, plumbing, painting, carpentry, sign, flooring, smoke detectors) $18,000 $65,000
Equipment/fixtures $43,000 $212,000
Licenses/permits $35,000 $45,000
Beginning inventory $22,000 $38,000
Phone/utilities deposits $150 $375
Payroll $5,550 $18,730
Grand opening marketing $1,000 $3,000
Legal services $425 $1,150
Accounting $250 $650
Insurance $450 $2,350
Miscellaneous expenses (add roughly 10 percent of total) $12,907 $39,238
Total Startup Costs $141,982 $431,618
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