How to Open a Bar

In 2019 alone, there were nearly 50,000 bars and pubs across the UK. With this in mind, you may think you have a lot of competition. But with the right game plan in place, you can succeed and compete effectively while bringing your unique bar concept to the public. 

If you are wondering about the intricacies of setting up a bar in the UK and becoming a bar owner, this post is for you.

In this in-depth guide, we’ll walk you through some of the most important factors you need to consider to get your bar concept off the piece of paper and turn it into a real venue that your clientele will love. 

So, without further ado, let’s take a look at what it takes to become part of the bar industry. Here’s everything you need to know about opening a bar in the UK.

1. Do Your Market Research

Starting a new business always requires data. Naturally, when you want to open a bar, the very first step is to do your market research. 

Market research is a broad term for studying the lay of the land. In other words, looking at opportunities for market penetration as well as analysing your competitors. But where do you start? The answer is not as straightforward as you might think because it entails considering multiple factors simultaneously. 

For example, there are some streets in London lined with bar after bar. Opening a bar in a similar location means that you’ll need to be as well-prepared as possible because you’ll face a lot of competition. 

Therefore, you first need to look at your prospective location. Will you be operating in a busy restaurant and bar street? Will you be located somewhere where there is less competition but also less foot traffic? These are important questions to consider.

Another part of market research is studying your competition. Where are existing bars located? What type of atmosphere do other businesses offer – a more sophisticated venue for wine spritzers on a Friday night or a more laid-back pub venue that the average Joe can enjoy? 

You also need to study what they offer on their menus. Bars and pubs are generally known for their drinks and less so for their food menus. 

So, you need to know what you’ll be offering and how that sets you apart from the rest. Will you be sourcing high-quality imported wines? Will you be creating mouth-watering cocktails? Or will you aim at opening a beer bar with unique offers? 

Being clear about this and then comparing what your competition is pricing for their products can also help you start off on the right foot.

Of course, you also need to study your target market. This is an essential part of market research when you are trying to figure out how to open a bar in the UK. Your target market is the demographic that you’ll be catering to. 

These could be students, working individuals, older people, a more sophisticated crowd and everything else in between. You need to be aware of what their interestsare so that you can offer them something that they will like. If you don’t study your target demographic, you are, as they say, lost at sea and will be left floundering.

2. Consider All Necessary Licences and Permits

Now that the market research is out of the way, your job is nowhere near close to done yet. In fact, it’s just the beginning. You’ll also need to get all the right licences and permits in place before opening day so that you are legally permitted to operate. 

For example, alcohol is a staple in practically every bar and pub across the UK. To be able to offer it on your menu, you’ll need to obtain an alcohol licence or a liquor licence from your local authority.

Costs for this can vary significantly and range from a few hundred to a few thousand pounds. Your expense will ultimately depend on a number of different elements, including the size of your venue and the alcohol served among other factors. 

If you plan on servicing food, you may also require a food service licence (even if we’re talking about things as basic as chips and snacks).

In addition, you’ll also need to acquire building permits and licences to play music or to open during certain hours such as from 22:00 until 05:00. If you intend to host things like live events such as bringing in local musicians to perform at your bar, there’s a licence for that, too. 

Overall, without all the right licences and permits in place, your bar business won’t be able to get off the ground because you won’t have the legal permissions to operate. 

Having them in place is part of the legal requirements for opening a bar in the UK. As such, these are essential to start acquiring from the get-go to ensure your bar doesn’t face any legal difficulties further down the road.

In the event of legal hiccups, it is best to be prepared. This means securing the right type of insurance for your bar including public liability, employer liability and other forms of insurance. This will guarantee that any potential future claims against your bar can be effectively dealt with. 

3. Research Funding Options

Now for the question of how you’ll actually pay to set up a bar. Needless to say, starting a bar can entail a significant financial investment for bar owners. 

But where will you source the funds to cover your startup costs? 

Here are a few funding options you can consider: 

• Acquiring funding from a lender such as a bank or a building society
• Getting investors involved in supporting your bar project
• Getting equity on an existing home or on tangible, immovable assets
• Starting a partnership where your partner can help finance the bar project
• Local small business help schemes or grants offered by local municipalities

There is always the most common option of self-funding your bar through savings. If you are considering this route, make sure to set aside extra funds before you start. It might be difficult to match your financial forecast as you may need some time to understand the footfall trends to estimate correctly and cover your expenses. 

4. Come Up With a Bar Concept and Brand

Next up when it comes to opening a bar in the UK is the matter of pinning down your bar concept and brand. 

The brand is the visual identity of your bar business and it needs to be completely consistent throughout the entire user experience. This means taking into consideration every light shade and every picture on your walls to ensure they align with the image and atmosphere you want to create for your patrons to enjoy.

As a business owner, you may wish to create a brand guidelines book that sets out what colours you will use for your logo (which should also appear on all your marketing materials including your website and flyers). 

You may also wish to determine what sort of feeling you want to invoke in your customers and try to create that atmosphere for them using the right interior styling options.Once again – ask yourself questions. Will you offer a more sophisticated bar venue or a more laid-back one? The interior needs to match your brand.

Everything you do, from your menu to your marketing (for more on this see below), will need to be consistent with your bar concept.

5. Decide on Your Business Model

Another important aspect that relates to how to set up a successful bar in the UK is the choice of business model or business structure. You can choose from a sole proprietorship, a partnership, an LLC corporation, and more. Just bear in mind that each of these business “vehicles” comes with its own sets of advantages and disadvantages. 

A sole proprietorship, for example, is a business model where the owner can fully enjoy all the profits they make from their bar business. On the other hand, this business model ties the owner’s personal and business liabilities together. 

This means that in the event of a debtor seeking to reclaim payments, your personal assets and business assets will not be considered separate. You may have to dig in your own pockets to come up with the necessary funds to cover your debt or financial shortcomings. 

The opposite is true for LLC corporations, where the owner’s finances and the business finances are completely separate and one cannot in essence “touch” the other. 

6. Choose the Best Location for Your Bar

Another crucial component to opening a bar in the UK is choosing the right location. You will have heard this a thousand times but it bears worth repeating again: location is everything. 

You need to be savvy with your selection by studying your competition in your desired area.

Another important aspect to consider is the local community. 

Will they be attracted to your brand and bar concept? Will you be able to provide them with ease and convenience to reach you or will they have to travel out of their way just for a drink? Will your bar be located near convenient transportation routes and if not, will there be sufficient parking for your customers to gather? Finding the answers to these questions is vital. 

In addition, it’s also a good idea to think broader when it comes to locations. For example, you may wish to open a small neighbourhood bar near current local attractions. If you are located near a nightclub, the chances of getting the pre-drinks crowd are higher. 

However, if you’re catering to a more sophisticated business clientele, you may wish to locate your bar where your clientele is or near a restaurant they visit. 

All of these questions must be considered and on top of this comes the aspect of the actual building or space for your bar. 

Here, questions such as whether you’ll finance the purchase of the venue or whether you’ll rent it need careful attention. If you plan on repurposing the venue, do you have the budget and permissions for it? Don’t forget to plan also the actual bar layout. 

7. Write a Business Plan for Your Bar

The business plan is your “roadmap” to success. It’s where you end up putting everything down on paper and solidifying your bar concept while clarifying to potential investors that your bar business idea is worth supporting. 

For this reason, you need to take your time with the business plan for your bar. It will be a very detailed culmination of all the points raised in this article, and more. 

For example, apart from starting your bar business plan with an executive summary, you will also need to indicate:

• What the bar concept is.
• Show that you have done thorough market research.
• Indicate how you plan to staff and equip your bar premises.
• Ensure that you have the right suppliers in place.
• Provide financial projections and forecasts of anticipated earnings.
• Indicate how you’ll carry out your marketing and advertising.
• What insurance you’ll get and how much it will cost.

A useful tool before starting your business plan is the SWOT analysis. This framework can guide you in finding the strength and weaknesses of your bar concept as well as to discover potential opportunities and threats in the market. This will show investors or other partners you’ve done your homework and researched your idea thoroughly.

8. Find Suppliers

Bars go through a lot of alcohol because that is one of their sole purposes – to serve alcoholic drinks while providing a pleasant and enjoyable atmosphere at the same time. 

With alcohol being so varied and diverse, you need to find suppliers which will help you save costs at the same time. This can be done through bulk deals and discounts on bulk purchases. 

In addition to this, you need to make sure your suppliers will be able to stock your inventory items on time, every time. As such, reliability and reputation for a quality service should be other key considerations as opposed to looking for the cheapest option only. 

If necessary, consider investing in inventory management systems that can help you stay in control of stock levels. 

9. Buy Equipment, Furniture and Supplies

In the next step involved in how to open your own bar, we consider the issues of buying bar equipment, furniture and supplies. 

Although we already spoke about finding suppliers, this time, we are talking about other types of supplies. 

Here is a list with a few examples of bar accessories and furnitures you will need:

• Furniture;
• Glassware;
• Tables and chairs;
• Barstools;
• Adequate and professional cocktail mixers;
• Kegs and cooling systems.

Overall, although bars are not as tech-heavy as restaurants, you still need to put a lot of thought into planning the premises.

Write a list of all the items you’ll need to get it furnished and operational from A to Z, culminating in the smallest items. For example, make a note of the soap you might use in your restrooms and the point-of-sale (POS) terminals or POS systems that you will use to help reduce queues and waiting times at the bar during peak hours. 

Don’t forget to factor in any space and electrical requirements that you may need to adhere to.

10. Create your menu

Creating your menu will probably be the most fun yet the most complicated process of your entire bar creation process. 

The reason is that when you think of how to start a pub or how to start a bar, the menu is going to be one of your biggest unique selling points. 

If you serve beer on tap, what will set you apart from other pubs or bars that offer the same? If you offer wines, what makes your selection better than another established bar in the area? If you are going to be offering cocktails, you need to consider what makes yours special. This is an intensive research process. 

Using focus groups to test out new drinks or solidifying your findings of what drink types already work will be a good plan before you launch your bar.

And drinks are just one part of the equation. If you’re going to be offering tapas or small platesof food to go along with the drinks, your menu will need even more careful consideration than merely the drinks.

11. Think About the Staff You’ll Need to Hire

Announcing a bar opening requires bar staff consisting of the right people. Some of the most common types of jobpositions that need to be filled at bars include an experienced bar manager, bartenders, barbacks, servers, hosts and/or hostesses and others. 

Each of these members of staff needs thorough training and previous experience will be an advantage. You will also need to factor in their shifts and working hours in addition to the salaries you will pay them to compensate them for their efforts. 

Further to this, you may need not only staff in your kitchen (if you offer food) but to also hire staff to handle your social media accounts and overall marketing efforts. You’d be surprised at how many people it takes to run a bar successfully and this is why staffing, recruitment and training are aspects that require careful thought.

12. Marketing and Social Media

The final (but by no means least important) aspect of opening a bar includes marketing your offering to attract customers. 

Marketing should have a twofold purpose. The first is to attract patrons to your bar establishment once you launch. The second is to consider marketing so that you continuously get patrons through your doors and not just during your soft or even official opening. 

For the initial launch of your bar concept, you’ll need to involve several marketing go-to-market strategies and tactics at the same time. 

You’ll need a Google My Business listing to help local customers find you. You will also need a website where you showcase your drinks (and food) menu in the most attractive light possible so that you draw your customers in. 

You will further need to create social media accounts for your bar on Facebook, Instagram and other platforms so that you remain relevant. 

However, you will need to find the right balance between online and offline marketing. You will also need to consider physical marketing materials and collateral such as flyers that you can hand out before the soft opening where you might offer discounts or an extended happy hour to draw in the crowds. 

The same principles mentioned above will be involved in your continued marketing efforts. 

You will want to ensure you generate good and strong customer testimonials to help ensure your bar gets and retains a good reputation for being a quality establishment. 

Consider taking out ads in local newspapers and publications to supplement your local marketing efforts, too. The more exposure you get right from the get-go, the higher the chances of continued business success in the future. 

However, it’s a matter of ensuring consistency in your customer service and offering by being true to your brand throughout.

Types of Bars You Can Open

Now that we’ve covered the step-by-step process of opening a bar in the UK, let’s take a look at the types of bars you can start.

This decision will be key as it will dictate your ability to grow, win market share from competitors, and profit as a result.

Some of the most popular bar concepts include:

• Wine bars: a wine bar that offers a selection of fine wines combined with a sophisticated, intimate atmosphere. 

• Sports bars: vibrant and energetic, a sports bar is the ultimate gathering spot for fans, offering big screens, cold drinks, and a drink menu of classic must-haves.

• Craft beer bars: a haven for beer lovers, a craft beer bar showcases unique, small-batch brews with bold flavours.

• Cocktail bars: usually chic and creative, a cocktail bar can provide a range of mixed drinks with innovative and catchy ingredients. 

• Speciality bars: this type of bar focuses on a specific niche and usually comes with a unique theme or menu.

• Lounge bars: relaxed and elegant, lounge bars merge cosy seating with soft lighting and premium drinks for a laid-back, upscale vibe.

Based on your decision, you can create a unique brand that your customers will easily recognise.

How Profitable Is a Bar?

Whether or not bars are a profitable business will ultimately come down to a range of factors such as your menu, how well you manage your marketing, what prices you’ve negotiated with your suppliers, how many customers you attract, and more.

Generally speaking, bars are considered a profitable business venture, with net profit margins ranging from 10% to 15%. 

Your profit and revenues will also depend on the type of bar you run. For example, some findings suggest that the markup for beer is around 200%, while that of wine is around 300%. 

How Much Does It Cost to Start a Local Bar?

The costs of opening a bar may not be as substantial as those of opening another type of business. However, they can still be a serious sum for a small business owner. 

When it comes to expenses, it’s key to address costs for location, licensing, insurance, inventory and equipment, staff, marketing, and others.

Setting up a bar requires studying your finances very carefully and making realistic projections for the bar’s success in the future. 

If you are wondering how much it costs to open a bar in the UK, the short answer is that it varies from bar to bar. Some have bigger venues than others. It may be useful to look at stats from the restaurant industry or the hospitality industry in general. Overall, opening a bar in the UK can range from £97,500 to £325,000 based on the type of bar you want to start running.

Many pubs and bars differentiate themselves in terms of location, atmosphere, and types of drinks (and food) served. As such, it’s difficult to pinpoint with certainty how much it will cost you to open a bar because there are many external factors to consider. 

The Bottom Line

Although we’ve surely given you a lot of food for thought when it comes to how to open a pub in the UK, the work that remains to be done is quite impressive, to say the least. 

Your to-do list will be extensive and it will help to ensure that you go through each item carefully.

By being as thorough as possible at each step of the process, you’re setting yourself up for success in the future.

After all, if you want to invest in a bar, it’s not a short-term venture that you can just give up on after a couple of months. It will take hard work and dedication to ensure that you reach the peak of your success.