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Opening a bar requires significant planning, time and financial investment. From sourcing funding, finding the right location to hiring and training staff and acquiring the right licences, there are a lot of different moving elements to opening a bar. This article will provide a brief <\/strong>overview of what you need to open a bar, with particular focus on opening a fixed site premises. It is advisable that you conduct more in-depth research on all the individual aspects of opening a bar before pursuing it, especially if you plan on opening a mobile business.\u00a0\u00a0<\/p><\/div>\n\n\n\n A bar is an establishment that sells alcoholic beverages such as beer, wine and spirits. They are typically open from the late afternoon\/evening until the early hours of the morning though this can vary depending on the type of establishment and premises licence. There are many different types of bars including:<\/p>\n\n\n\n In the UK \u2018bar\u2019 and \u2018pub\u2019 are often used interchangeably however they traditionally refer to different establishments. A pub is a public house which typically serves alcohol and food. The buildings themselves are usually very old and they are often seen as foundational parts of local communities. Whilst there is no strict definition of a pub, the Campaign for Real Ale<\/a> (CAMRA) defines a pub as a premises that:<\/p>\n\n\n\n This is an intentionally broad definition that seeks to be as inclusive as possible by recognising that many different licensed premises can be classed as pubs. However, there are some instances in which a licensed premises would not fall under the umbrella term of a pub. <\/p>\n\n\n\n Comparatively, a bar is an establishment that serves alcohol, typically limited food and may charge people for entry. The term \u2018bar\u2019 refers to the counter where drinks are prepared and served. Bars usually have less of a tie with the local community and may instead be positioned in more populated areas of a city, engaging with timely trends to entice new customers. This article will refer to bars and pubs in the same context however, if you wish to open a pub you must do additional research to see what alternative steps you may need to take in order to open one. <\/p>\n\n\n Below you will find guidance on the steps you can follow to open a bar. It\u2019s important to note that these steps are a guide and need not be followed dogmatically. <\/p>\n\n\n\n When opening any independent hospitality business the main driver, and simultaneously the main blocker, is often funding. This can impact the speed at which you move, the type of premises you open and whether you are able to operate at all. Without adequate funding you may find that the other steps needed to open a bar become significantly harder. Whilst funding is not the first step in the suggested process below, it\u2019s advisable to always keep costs in mind to ensure they remain manageable and realistic. <\/p>\n\n\n\n You do not need to follow the steps below in the same order, however it may help the process to feel more manageable when used as a general guide. You may find that certain elements come up in several steps as they factor into several decisions. In this instance, feel free to go back to previous steps and add further detail if necessary. <\/p>\n\n\n\n A strong business plan is the blueprint for what you want your business to be and what you want to achieve. It should be comprehensive and detailed, but written in clear and accessible language so that anyone can read it and get a feel for who you are. Whilst a business plan is not a prediction of the future, certain things should be set in stone before you start writing it. For example, before writing your business plan you should know what kind of bar you want to open, the area you would like to open in and whether you want a permanent bricks and mortar site or a mobile business. It\u2019s important that you make these decisions in advance as they may impact your financial projections, marketing strategies and what kind of licences you need.\u00a0<\/span><\/p>\n <\/p>\n Additionally, if you are planning on taking out a loan to fund your business, your business plan may be needed to secure funding. If so, prospective lenders and investors will want to see a clear vision and a document that shows a strategic plan for the future.\u00a0<\/span><\/p>\n <\/p>\n Writing a business plan requires thorough research and this is especially important when opening a bar as it is a very competitive industry. Taking the time to conduct market research before writing a business plan helps you to identify who your target audience is, what they are looking for, how much they are willing to pay and who your competition will be. You can also use your business plan to highlight what will make your bar unique and how you plan on achieving that.\u00a0<\/span><\/p>\n <\/p>\n When writing a business plan it\u2019s beneficial to consider:<\/span><\/p>\n <\/p>\n <\/p>\n Using this information you can collate a clear and comprehensive business plan that includes the following:<\/span><\/p>\n <\/p>\n The start-up costs for opening a bar can be substantial and so it\u2019s vital that you carefully consider funding. The amount of capital that you will need will depend upon the type and size of business that you are hoping to run. Smaller, mobile bars can be set up in a relatively cost effective way whilst larger, bricks and mortar premises will require significant investment.\u00a0<\/span><\/p>\n <\/p>\n A conservative estimate for the cost of opening a bricks and mortar bar in the UK is between \u00a320,000 and \u00a31 million however, as mentioned, this can vary greatly depending on the type of bar you open as well as its location. These figures also include staffing, renovation, marketing and licensing costs. As such, <\/span>all <\/b>factors must be considered when looking at initial start-up costs so that you can create a realistic business plan.\u00a0<\/span><\/p>\n <\/p>\n When planning your finances you should separate out one-time costs from operational costs as this will impact how much money you will initially need. One-time costs will typically cover things such as deposits, renovations and equipment purchases. Ongoing costs will typically cover things such as rent, payroll and supplies. Once the bar is up and running and earning money, ongoing costs will likely cover themselves. However, you will need capital to cover one-time costs that accrue before the business has started to make any money.\u00a0<\/span><\/p>\n <\/p>\n One-time costs may include:<\/span><\/p>\n <\/p>\n Ongoing costs may include:<\/span><\/p>\n <\/p>\n It\u2019s important to find a balance between one-time costs and ongoing costs. Finding cost effective alternatives for one-time costs may seem like a good idea to begin with but this could cause expensive problems down the line. For example, buying cheap equipment will reduce some initial costs, however if that equipment is faulty and requires regular maintenance or replacing that will increase ongoing costs.\u00a0<\/span><\/p>\n <\/p>\n It\u2019s vital that you are realistic about your financing needs as this will undoubtedly impact how much funding you secure and where you secure it from. There are many different ways you can secure funding to open a bar. The type of funding that you get will impact what kind of bar you open and may impact other aspects such as the location of your business.\u00a0<\/span><\/p>\n <\/p>\n Bar funding options that are available in the UK include:<\/span><\/p>\n <\/p>\n <\/p>\n As mentioned above, financing is the main driver behind opening a bar. You must be realistic about how much initial capital you need and how much you can afford to borrow, if you choose to get a loan. It\u2019s also beneficial to budget a \u2018safety net\u2019 of sorts to keep your business afloat in the first few months where revenue may be less stable.\u00a0<\/span><\/p>\n <\/div>\n Any business that wants to sell or supply alcohol in England and Wales must have an alcohol licence to do so. The types of alcohol licence that a business may require are as follows:<\/span><\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n A <\/span>premises licence<\/b> is a permanent licence that is granted to a specific location. It authorises the use of any premises (as defined by the <\/span>Licensing 2003 Act<\/span><\/a>) for licensable activities as defined in Section 1 of the Act. These activities include:<\/span><\/p>\n <\/p>\n <\/p>\n Personal licences<\/b> allow an individual to sell alcohol on behalf of any business that has a premises licence or a club premises certificate. You are not required to have a personal licence to work in a pub or bar however, premises that are licensed to sell alcohol must have a designated premises supervisor who holds a personal licence.\u00a0<\/span><\/p>\n <\/p>\n Members\u2019 clubs can operate under <\/span>club premises certificates<\/b> instead of premises licences. However, to be classified as a club for the purpose of the certificate a group must meet <\/span>several conditions<\/span><\/a>.\u00a0<\/span><\/p>\n <\/p>\n You may also need to consider the following:<\/span><\/p>\n <\/p>\n Temporary Event Notice (TEN)<\/b> \u2013 If you\u2019re organising a temporary event and want to serve or sell alcohol, provide late night refreshment or put on regulated entertainment you\u2019ll need to complete a TEN. This enables you to temporarily carry out licensable activities on unlicensed premises in England or Wales.<\/span><\/p>\n <\/p>\n Additional licences and permits that a bar may need before it can legally operate include:<\/span><\/p>\n <\/p>\n Music licence<\/b> \u2013 If you plan on playing copyrighted music at your bar, whether that be recorded or live entertainment such as a band, you\u2019ll need to have a licence from <\/span>PPL PRS<\/span><\/a>. The cost of the licence will vary from business to business and sector to sector. The PPL PRS offers a rough outline of costs which can be found <\/span>here<\/span><\/a>. Pubs and bars that are 400 sqm or less and wish to play music via a radio can expect to pay an annual fee of around \u00a3360 plus VAT, however this could increase for larger venues. Many pubs save money by not playing music which means they do not need to have a licence. It\u2019s vital that you acquire a licence if you plan on playing music as PPL PRS fines can become costly.\u00a0<\/span><\/p>\n <\/p>\n Insurance <\/b>\u2013 As a place of business it\u2019s advisable to take out insurance to protect you and your business. Public liability insurance is popular amongst small businesses and covers them for claims made against them by members of the public. <\/span>Public liability insurance is not a legal requirement but it\u2019s good practice to have it in place.<\/b> If you plan on hiring individuals to help run the business you will need employer\u2019s liability insurance (EL). You must get EL insurance as soon as you become an employer, to cover you for at least \u00a35 million and from an authorised insurer. EL insurance helps businesses to pay any compensation if an employee is injured or becomes ill because of their job. <\/span>EL insurance is a legal requirement and businesses can be fined \u00a32,500 for every day they are not properly insured.<\/b> Businesses do not require EL insurance if they only employ family members or someone who is based outside of England, Scotland and Wales. It\u2019s also advisable to get building or commercial property insurance and contents cover to protect the physical building from any issues.\u00a0<\/span><\/p>\n <\/p>\n FSA Registration<\/b> \u2013 In the UK any business that stores, serves or sells alcohol is legally classified as a food business and therefore must <\/span>register<\/span><\/a> as such with the Food Standards Agency (FSA). You must register your business at least 28 days before you start trading. As a food business you are legally required to ensure that staff receive appropriate <\/span>food hygiene training<\/span><\/a>. Comprehensive training ensures that you are legally compliant and that customers are kept safe. Upon registering as a food business you will be subject to a hygiene inspection by an Environmental Health Officer (EHO) from your local authority. This inspection will determine your <\/span>food hygiene rating<\/span><\/a> and may impact custom as customers are more likely to patronise bars with higher food hygiene ratings. You can learn more about how to prepare for an inspection <\/span>here<\/span><\/a>.\u00a0<\/span><\/p>\n <\/p>\n You may also require a signage permit depending on the size and location of any outdoor signage that you have and your local council\u2019s regulations. Additionally, if you plan on making significant changes to a property you may require planning permission for the intended changes.<\/span><\/p>\n <\/p>\n The list above is not exhaustive and you may not require every permit or licence listed. It\u2019s therefore advisable to contact your local authority to double check what is required for your bar and location.\u00a0<\/span><\/p>\n <\/div>\n The ideal location for a bar will have the right balance between foot fall, competition and cost. Choosing the right location when opening a bar is a vital decision as it has an undeniable impact on the success of a bar. Without enough foot traffic you won\u2019t have the custom to make any money. However, if you open a bar next to a well known and loved establishment you may find that the competition is too high and that brand loyalty prevents you from getting new customers. The location of your bar will also be impacted by the type of bar that you want to open. Opening a specialist cocktail bar in the remote hills of the English countryside may create a unique sense of exclusivity, but if your venue isn\u2019t easily accessible you simply won\u2019t have the numbers to make any money.\u00a0<\/span><\/p>\n <\/p>\n Cost will arguably have the greatest impact on the location of your bar. Mobile businesses have significantly more flexibility with the location of their bar and so can select pitches and events that are cost effective. However, for fixed site premises, options are slightly more limited. The price of rent must be factored into any financial planning and you should be prepared to pay a deposit or a few months rent in advance in order to secure a lease. Moreover, if you are in the position of buying a property, you must ensure that you have the capital to cover the costs of buying as well as any additional legal fees.\u00a0<\/span><\/p>\n <\/p>\n It\u2019s important to remember that the cost of your location will have long term consequences. For example, a more expensive location will likely have good foot traffic but the high cost of rent and utilities may necessitate stringent budgeting in order to make it affordable, potentially delaying business growth. Comparatively, cheaper locations may be more cost effective in terms of initial costs but have lower foot traffic making it harder to earn revenue.\u00a0<\/span><\/p>\n <\/p>\n When researching potential locations it\u2019s advisable to consider:<\/span><\/p>\n <\/p>\n
\n\n\n\nWhat is a Bar?<\/h2>\n\n\n\n
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\n\n\n\nHow to Open a Bar<\/h2>\n\n\n\n
\n Write a Business Plan
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\n Manage Funding
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\n Research Licences and Permits
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\n Choose Location
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