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How to Open a Bar in 10 Steps

Vivian Giang is a writer and editor. Her work has appeared in the New York Times, BBC, Fast Company, Marie Claire, Fortune, Slate and Business Insider, among others.

Robert Beaupre leads the SMB team at NerdWallet. He has covered financial topics as an editor for more than a decade. Before joining NerdWallet, he served as senior editorial manager of QuinStreet's insurance sites and managing editor of Insure.com. In addition, he served as an online media manager for the University of Nevada, Reno.

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

If you've ever spent an evening at a fun local bar, you may have wondered about whether you could run your own drinking establishment and be successful. This being said, if you're thinking that you might take that idea and turn it into a reality, you're now probably wondering how to open a bar in your neighborhood.

When it comes down to it, opening a bar is very similar to starting a small business of any kind — with the added aspect, of course, of serving alcohol to customers.

In addition, it's important to note that bars require around-the-clock maintenance, they need significant capital to get started, and they aren’t recession-proof . Therefore, you'll want to make sure you take the time and effort necessary to plan strategically in order to successfully open your own bar.

1. Create a business plan

A business plan is an important document for any kind of small business. When learning how to open a bar, it's practically a requirement.

In short, your business plan is a written plan that takes you from inception to success and will cover your company's value proposition, the location and team, the industry you're entering, your legal structure, products and services, how you plan to market yourself, financial projections and any other additional information that will point you toward long-term growth and profitability.

Overall, this plan will help guide each of the other steps required to open a bar — and therefore, you can refer back to it often and tweak it as necessary as your plans change or pivot.

Plus, you'll not only use your business plan as a roadmap to long-term success, but also to attract investors and funders, as well as to explain your concept to potential partners.

Use our guide to writing a restaurant business plan for more insight into creating a business plan for this specific type of industry.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

2. Find the right location

Just as with any small business, choosing your business location is integral to your short-term and long-term success. If you’re going to be the neighborhood bar, you better know the people you’re serving.

During the planning stage, you can consider contacting your local chamber of commerce to get information on your target market. Are you catering to college students, blue-collar workers, the art crowd, or conservative suburbanites?

You might also choose to work with a real estate agent who is familiar with the area and can help you find the best location at the most affordable price. As renting or buying your storefront will be one of the largest upfront costs associated with opening a bar, you'll want to make sure your real estate agent has experience working with tenants and who can help you navigate the leasing process.

3. Register your business

You can’t run a business without proper registration. The requirements for registering your bar depends on the city and state where your business operates. Like starting any new business, though, you'll want to acquire an employer identification number for tax filing purposes and register your business with local authorities.

You will also need to choose an appropriate business entity type. The four most popular entity types, or legal structures, are:

Sole proprietorship.

General partnership.

Corporations.

Limited liability corporations.

While sole proprietorships or general partnerships are the easiest entities to set up, they don't offer personal liability protection — meaning if someone sues your business, your personal assets may be seized. Since bars tend to have greater legal risks than other businesses, you should consider setting up an LLC or corporation. A business attorney who's experienced in the industry can help you make the best decision for your bar.

4. Choose a business name

Choosing a business name for your bar is a big part of your business’s brand identity.

Your business name should be memorable, represent your business in some way and most importantly, not already registered by a competitor. You can check to see if your business name has already been taken by checking your secretary of state’s website.

You’ll also want to ensure that if you’re making a business website that the domain name hasn’t already been taken. If you plan on marketing your business on social media sites, checking platforms such as Facebook and Instagram is also essential.

5. Obtain licenses and permits

When you're learning how to open a bar, business owners often forget about the hassle that comes with permits and licensing — make no mistake — alcohol is a heavily regulated business.

First, you’ll need a license from the Alcohol and Tobacco Trade and Tax Bureau , or TTB, the entity responsible for enforcing laws “regulating alcohol production, importation and wholesale businesses; tobacco manufacturing and importing businesses; and alcohol labeling and advertising.” This process will take anywhere from six to 12 months to complete. The TTB will need to inspect your business and conduct background checks on directors, officers and owners.

Next, you’ll need to get liquor licenses at the state and local level. If you plan on serving food, you’ll also need a food seller’s permit.

Once you obtain the necessary business licenses and permits, you'll want to be sure your bar is kept up to code as food and alcohol businesses are often subjected to inspection.

6. Find suppliers

Satisfying patrons can either make or break your business. That’s why finding good suppliers for your bar is an absolute must.

When you’re looking for quality suppliers, we suggest connecting with your neighboring bar owners and see if they can refer you to their go-to vendors. We also recommend making a list of all the supplies you want and creating a business budget for them.

Once you have those in check, you can start shopping around. Online suppliers are also another worthwhile option because they generally have discounts, but beware — not all of them are as trustworthy as others. Here are some things you should know about the supplier before doing business with them:

How long they’ve been in business,

References,

Minimum order amount,

Payment terms,

Quality assurance process,

Remember, a supplier should be willing to work with you and understand exactly what it is your business needs. If you have a bad experience with a vendor, don’t be afraid to look for a new supplier.

7. Secure funding

From furnishings to point of sale software to insurance to licenses, getting your business off the ground requires you to think about getting funding for your bar.

How much does it cost to open a bar?

The average cost to open a bar varies widely depending on your location, but typically ranges from $110,000 to upwards of $500,000. Purchasing a pre-existing bar or opening a specialty bar (like a winery or micropub) is a cheaper option, although it can still cost you around $25,000 to get started.

Plus, once your bar is up and running, you'll still have significant ongoing costs for payroll, inventory, rent, insurance and more.

Therefore, if you're wondering how to open a bar with no money — and even if you do have some initial startup capital — you'll need to look into financing options for your venture.

A good place to start is with a business credit card , which can help cover the costs of small- to medium-sized purchases while also helping you earn up reward points.

In addition, you may want to look into startup business loans , short-term loans and other forms of business funding from either your local bank or an online lender. Whatever costs you have and your ability to pay them back should be covered in your business plan.

With the importance of this step, you'll want to take plenty of time to figure out what your startup costs look like and what type of financing will be best for your bar.

8. Design your bar

A bar is meant to be a welcoming space for people looking to unwind or socialize with friends. The same principles of designing a restaurant, therefore, can also be applied to bars.

You'll want to think about the atmosphere and how to efficiently utilize the space. You can set the tone of the bar by playing with lighting and choosing fixtures that differentiate your bar from everyone else’s. You’ll also want to pay close attention to how you design the bar stations; you may want to use several registers so that bartenders aren’t getting in each other's way to ring up customers.

Another major part of designing a bar is the bar tops, which can be thought of as the centerpiece of your bar. Bartops are usually made out of glass, stone, or wood materials, but keep in mind that each material has its drawbacks and benefits.

9. Develop your marketing strategies

Ask any business owner in the bar and restaurant industry: Competition is fierce. People are always searching for the latest and greatest places to eat and drink.

As a bar owner, you need to develop strong marketing strategies if you want your business to last. To bring in new and repeat customers, you should present your bar in the best light possible.

This includes incentivizing customers to write honest reviews on sites such as Yelp, investing in high-quality photos to showcase your drinks and building a stunning website.

10. Pick a reliable POS system

Before you can officially open your bar, you'll need to pick a POS, or point-of-sale, system.

Although there are a variety of options when it comes to bar or restaurant POS systems, the right POS system should (at the very least) help facilitate your business operations. And contrary to popular belief, you don’t necessarily need an expensive POS system. POS systems generally will cost you a monthly fee plus a small fee for credit card transactions.

Therefore, a reliable POS system should help you easily process payments, orders and sales. Three of the best POS systems for bars are:

Square : Good for small businesses.

Toast : Best for midsize businesses.

TouchBistro : Best for high-volume transactions.

Start Your Dream Business

The bottom line

It may look easy, but running around catering to patrons can be physically and mentally exhausting. There are many long days and nights associated with learning how to open and run a bar.

Once you've filed all of the paperwork and licenses, however, opening a bar becomes a little easier. As long as you have a clear vision for the design and work tirelessly to provide excellent customer service, people will come back.

And if they do, you'll be able to take advantage of word-of-mouth marketing — which be one of the best ways to promote your bar in the local community.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

How To Open A Bar

1. Decide what type of bar you want to open

Create your concept

2. Identify your business structure

3. Create a business plan

Identify your customers

Analyze your competition

Choose your strategy for overcoming competition, 4. find the ultimate location.

Decide on the size of your establishment

5. Sort out the paperwork

Secure permission from the local government agencies.

Visit the building and safety department., brainstorm and register your bar’s name..

Obtain an Employer Identification Number (EIN)

Can be done online via IRS (Internal Revenue Service) website. You’ll need this number for most of your licenses and permits, and all tax documents.

Visit your local Alcoholic Beverage Control

Obtain food-service license

Complete a Special Occupational Tax with TTB

You will have to register with TTB at the federal level before you begin selling any alcohol. You can get all the information you need on their website.

Start your record book

Settle things with the fire department.

5. Design your bar

Plan your menu

Get a POS system

Choose the right equipment.

6. Stock up your bar

Build up the relationships with suppliers

7. Draft your team

Set up salaries

Find and hire the right candidates

8. Open your bar

9. Promote your bar

You know your place is awesome. Your mom thinks it’s awesome. Now let’s make the whole neighborhood think so as well!

Spread the news via social media

If your bar does not have a Facebook page these days, it is basically non-existent. Make sure you have created a custom page header that fits in the style of your bar; have some cool, high-resolution pictures of the menu and interiors in the albums; opening hours and location on the map stated.

To grow your social media following, offer some small perk for customers who will like your page on FB or follow you on Instagram e.g. free snack.

Invite online influencers to your opening

While attracting journalists and media might be a little tough for a small bar, inviting a few popular online personas (bloggers, vloggers, instagrammers etc) to live cover your big night may bring you the same buzz levels. And attract journalists afterwards.

Offer a complimentary appetizer to first 25 people to share your post

Offer a secret deal to social media followers

Enlist a special drink/food on the menu that any of your followers can order in case they do some social media action e.g. post a photo and tag you; write a special status etc.

Gauge the anticipation in advance

Reach out to your local media, covering lifestyle and restaurant business, in advance offering an exclusive sneak-peek inside your venue.

Start a happy hour

Offer special deals through group buying platforms

Post a discounted deal at sites like Groupon and LivingSocial for a limited amount of time to attract new visitors. If they like your service, they will spread the word for you!

Collaborate with other businesses nearby

Ask a bookstore to nail your posters in exchange for placing their leaflets on your tables. Offer a pizza delivery to give away your cards in exchange for doing same. It’s a win-win option for both parties.

Hold a “beat the clock” contest

Next Friday announce that you’ll start selling beer at half price from 8 pm and will increase the price by 50 cent each hour till midnight.

The next day you’ll be positively surprised by the amount of folks who did try to beat the clock.

Held thematic promotion days

Mondays can be a Champaign days with 10% discount on all bubbly drinks; Tuesdays are all for tequila; Wednesday is a snack day and so on. Your visitors should know that no matter which day of the week they come, they’d always get a special deal. You can also pair drink discounts with food discounts.

10. Run your bar

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How it works

How To Open A Bar: A Complete Step-By-Step Guide

Transforming your dream bar into reality takes a lot of planning.

First, come up with the concept for your bar:  who are you serving, what's your vibe, and what sets you apart? Create a business plan detailing finances, marketing, and competitor analysis.

Comment by from discussion in startups

Next, secure funding and tackle legalities like licenses and permits. Find a location buzzing with potential customers and matching your vision.

Design a space that reflects your brand and invest in essential equipment and supplies. Recruit and train a skilled team to bring your vision to life.

Stock up on beverages, food (if applicable), and garnishes. Generate excitement through social media , partnerships, and events.

Finally, host a soft opening to iron out kinks before the grand unveiling. 

Remember, this is just the roadmap – each step requires research, approvals, and resources. For more on this topic, continue to read our complete guide below

Here's the complete checklist on how to open a bar in 2024:

1. Create a business plan

2. consider the structure of your business.

3. Get your funding in order

4. Understand DBA, EIN, and taxes

5. Get the required bar licenses and liquor licenses

6. Put together a bar menu

7. Organize your marketing, promotion, advertising, and branding

8. Remember to trademark your name and logo

9. Create your bar and begin remodeling

10. Select the ideal spot

11. Hire the right people

12. Select distributors and suppliers, then buy your supply

13. Create sales forecasts, and pay attention to your bottom line

14. invest in a table management system, 15. purchase bar supplies, the complete checklist to opening a bar.

Poor initial planning can make fixing a small business like a pub or nightclub expensive, if not impossible. For this reason, before launching a bar or nightclub , bar owners should have a full bar business plan and strategy in place.

You can lower your chance of failure by finding weaknesses in your bar concept and business model that can be addressed before launching by creating a business plan for your bar.

It can also assist you in putting your major objectives—such as your company's competitive advantage and mission statement —into writing.

Plus, it will also help you in estimating the startup expenses you'll incur and in preparing to approach potential investors and investors for funding.

Keep in mind you won't be able to forecast the exact month you finally reach your break-even point, for example. And the exact specifics of your new bar business are likely to vary over time.

What you can do, though, is list the elements and KPIs that will affect the bottom line of your company.

Further reading

• How to Write a Restaurant Business Plan in 2024 (Step by Step Guide with Templates)

When opening a bar, one of the most important choices you'll have to make is how to set up your company.

Which business structure do you intend to use: corporation, LLC, partnership, or sole proprietorship?

A sole proprietorship or partnership may be simpler to establish, but there is a drawback to this type of organization: you bear personal liability for any debt and/or lawsuits your company incurs.

Stated differently, in the event of a dispute, your liability is unrestricted, which implies that you might have to give up personal belongings to pay for damages.

The most common way to protect yourself from personal responsibility is to incorporate or form an LLC for your restaurant or bar.

These business arrangements restrict your liability by acting as an independent entity and taking on the other business owner's debts.

For example, if someone trips and falls in your bar and wishes to sue, they do so against the business rather than against you.

Make sure you understand what you're committing to before you finalize the complete structure of your business. For more assistance on this topic, we suggest you speak to a bar owner, who can give you some guidance. 

3. Get your funding in order

The benefit of bars and nightclubs is that they can more easily make money than restaurants, especially compared to the latter.

Bars can turn a profit faster since alcoholic beverages have high markups and cheap ingredient costs.

They also demand fewer employees, which reduces labor expenses; all of these factors will increase the appeal of your company to possible investors.

• What is a Restaurant Profit Margin? Your Complete Guide

4. Understand DBA, EIN, and taxes

Taxes are a necessary expense for any organization, and managing this process from the start to the end will save you hassles. The first step is to apply for an Employer Identification Number (EIN), which is the tax ID number for your company, from the IRS.

You must file for a DBA (Doing Business As) if your company will be taxed under a name other than yours or the company's.

A competent accountant is essential to the successful operation of a restaurant business, so it's a good idea to enlist their assistance early on.

Wish I understood DBA and EIN before opening my bar. Tax mess was a nightmare. Hire an accountant—trust me!

5. Get the required bar licenses and liquor licenses

Before you open for business, your bar must have the appropriate liquor license to avoid legal issues and to guarantee the smooth opening and continuing operations of your establishment.

You need a license to sell food and drink in your bar, as well as to play music. While some of these are simple to attain, others need more work.

Starting early is essential because obtaining a bar business license can be expensive and take several days, weeks, or months.

You will likely require legal assistance at some point during the life of your company, so working with a reputable lawyer from the beginning of the opening process will help you steer clear of costly and time-consuming errors.

6. Put together a bar menu

Take inspiration from bar menu design templates, explore local bars, and browse internet menus of bars that share a similar theme. Next, organize and create your own bar menu based on the kind of establishment you're operating.

• Top Free Restaurant Menu Makers

A wine bar should feature a variety of wines, sometimes in a specialty area (like natural wine), while a craft beer bar should have dozens of distinctive, locally brewed beers.

• How to Manage a Winery: Tips for a Wine Manager

A general bar should serve a variety of drinks, including wine, beer, and non-alcoholic options, in addition to classic cocktails and inventive concoctions.

• The Most Overlooked Profitable Menu Items for Restaurants

7. Organize your marketing, promotion, & branding

Many bars attract guests by word of mouth, foot traffic, and proximity; this is especially true for establishments hoping to establish themselves as beloved local hangouts.

But, it's important to highlight your products with an internet presence and an effective marketing plan to expand your bar business.

This is how you draw in clients from surrounding neighborhoods. Once they enter, your excellent atmosphere and beverage menu will entice them to return, even if it means having to go across town.

• The Best Digital Marketing Strategies For Restaurants

8. Remember to trademark your name and logo

Register your name and logo with your trademarks with the USPTO , the United States Patent and Trademark Office.

Adhere to the instructions provided on the USPTO website. Keep in mind that in certain situations, you could need legal representation.

Additionally, if you collaborated with a designer to develop your logo, you'll need to work with them to make sure you have the legal authority to use their creations as copyright.

• How to Name a Restaurant (Expert Tips, Ideas & Examples)

9. Create your bar and begin remodeling

Unlike restaurants, where guests can occasionally be content with takeaway or delivery , people go to bars for the ambiance and to mingle.

Likely, people are there for the atmosphere rather than the drink if they are at the bar. That is why it's important to choose the appropriate furniture, décor, and music.

Make sure everything in your bar design complements one another. In one example, everything should be in harmony; don't create a sports bar and play techno music.

Create a board on Pinterest to collect unique ideas for bar decor. Engage the services of an interior designer if you can.

Whatever you choose, be sure to get this right so you can provide your clients with an unforgettable experience and encourage repeat business.

 10. Select the ideal spot

The greatest method for locating your bar in the ideal area is to conduct a location study. These are a few of the most important aspects to take into account, while there are many more:

• Target demographics:  Either start by focusing on a place whose population characteristics align with your idea or build your whole plan around the characteristics of a chosen site.
• Zoning laws and health regulations:  Zoning laws can differ significantly between counties and cities. To ensure you know what to anticipate, make sure you familiarize yourself with the zoning laws in your area.
• Access and visibility:  Choosing a spot that is visible to onlookers and drivers alike is crucial. Parking that is accessible is always ideal.
• Take a look at the competition nearby:  If there are a lot of bars in the area, you might want to consider choosing an alternative site or making sure your bar has a distinctive concept that makes it stand out.

11. Hire the right people

The staffing requirements of various bar types can differ.

A huge nightclub , for example, will need additional staff, such as a house DJ or bottle service personnel, that a small neighborhood pub won't require.

You might want a sommelier on staff if you manage a wine bar . To start most bars, you'll need to fill the following important positions:

• A hostess/ host
• Barbacks and servers

Starting a new business and getting in on the ground floor of a new bar excites a lot of potential employees.

• How To Get More Tips For Your Servers with Pay-at-Table

Creating a clear workplace culture from the start is the greatest approach to retaining your excellent bartending staff given the high turnover rate.

A well-thought-out training program with precise expectations should be developed in addition to conducting interviews and employing new staff.

Ensuring that your staff is properly trained to recognize indicators of obvious intoxication is an essential aspect of owning a bar.

These indicators should be highlighted in your training program, along with advice on how to handle inebriated customers. Ensuring your guests' safety is your duty both during their stay and after they depart from your establishment.

Get started with Eat App's free trial to get your staff up and running in no time!

12. Select distributors and suppliers

A method for bar inventory management or appropriate usage of a bar point-of-sale system should be established before opening.

This is because bar inventory plays a significant role in monitoring your cost of sales (including liquor, food, and other critical metrics).

You can determine which drinks are the most profitable in your bar and establish prices with the use of effective bar inventory tracking.

This information can be used to price your bar menu profitably, improve your bar's profit margin, and assist bartenders in making more sensible drink recommendations.

Make sure you have an effective bar accounting system in place in addition to keeping accurate inventory records.

Whether you use Quickbooks or employ a bookkeeper, it's important to monitor your company's performance and identify areas for improvement.

Although it can be difficult to project exactly how much money your bar business will make in the first few months, you can start monitoring key performance indicators as soon as you open by utilizing a top-notch bar point-of-sale and reservation system.

Maintain a record of your fixed and variable operational expenses and calculate the daily, weekly, and monthly revenue requirements to meet your expenses, break even, and ultimately turn a successful bar into a profit.

The bar scene is competitive, and maximizing efficiency while providing an outstanding guest experience is key to standing out.

A table and reservation system isn't just for fancy restaurants anymore – it's a powerful tool for modern bars to boost revenue, streamline operations, and delight guests.

Here's why:

Enhanced customer experience:

• No more waiting frustration:  Offer online reservations to eliminate walk-in wait times and guarantee customers a spot, especially during peak hours. This builds trust and reduces the chance of losing them to competitors.
• Personalized touch:  Capture reservation details to offer table preferences, birthday greetings, or special promotions, creating a sense of recognition and appreciation.
• Increased convenience:  Integrate with social media platforms or your website for seamless online booking, catering to tech-savvy clientele.
• Reduced queues:  Manage bar flow and optimize seating arrangements based on reservations, ensuring smooth service and avoiding overcrowding.

Operational efficiency:

• Maximize table turnover:  Allocate tables effectively based on reservation size and duration, leading to more customers served and increased revenue.
• Improved staff communication:  Eliminate confusion with a centralized reservation system that staff can access and update in real-time.
• Reduced errors:  Minimize double-booking and seating mishaps, leading to better service and happier customers.
• Data-driven decisions:  Gain insights into reservation trends and customer preferences to optimize staffing, inventory, and promotions.

Additional benefits:

• Marketing opportunities:  Collect customer data for targeted promotions and loyalty programs, fostering repeat business.
• Event management:  Facilitate group bookings and special events with dedicated reservation features.
• Reduced no-shows:  Implement confirmation systems and require deposits to minimize empty tables and lost revenue.

Get started with Eat App's free trial to get your Reserve with Google button activated now!

Choosing the right system:

Consider bar size, budget, and desired features when selecting a system.

Opt for cloud-based options for flexibility and scalability. Invest in a system that integrates with your existing bar POS system for streamlined operations.

The comparatively lower equipment costs at bars compared to restaurants contribute to their greater profitability.

You won't need an industrial mixer, deep fryer, burner, oven, or walk-in freezer if your bar doesn't serve food, which can reduce your startup expenses. It is still possible to work with a more manageable list of essentials if you only serve appetizers or snacks. If you're creating a sports bar, you will still need to spend money on excellent blenders, lots of refrigerators of all capacities, perhaps a wine cellar, a top-notch dishwasher, a keg and tap system, and lots of TVs.

Find out more about the supplies required to operate a bar, then make a list of what you should acquire first.

For your bar, you'll also need to purchase a tonne of small wares, such as straws, glassware, napkins, and cleaning supplies.

Here are some tips from bar owners on Reddit: 

Comment by u/SirSmilezzz from discussion in BarOwners

Opening a bar can be an exciting and rewarding journey, but it requires careful planning, dedication, and a touch of passion.

This guide has equipped you with the essential steps to navigate the bar opening process, from crafting your unique concept to securing funding and pouring your first drink.

Remember, the bar industry thrives on innovation and personalized experiences. Don't be afraid to experiment with your menu, create a welcoming atmosphere, and prioritize exceptional customer service.

By staying true to your vision and adapting to market trends, you'll be well on your way to building a thriving bar that becomes a beloved community hub.

How profitable is a pub?

What is the typical profit margin at a pub?  Around 80% is the profit margin that most bars strive for.

Bars have an average gross profit margin of almost 75% overall. Being able to measure and regulate your pour expenses is essential to hitting that target. Pour cost is an important metric to measure the profitability of your bar.

What is the startup cost of a local pub?

A pub must spend between $110,000 and $850,000 to be fully operational when it is first opened, for an average of $480,000.

Taking over an established pub business is typically less expensive because you'll save money on renovations and can include furnishings and equipment in the deal.

Are bars considered a good investment?

Purchasing a pub places owners in a sector of the economy that has the potential to grow for many years, but the companies with the most innovative approaches to customer service will probably have the advantage in this regard.

Customers of today anticipate quick service and prompt fulfillment of their wants when they visit bars because they are accustomed to it.

Senior Content Manager at Eat App

Elana Kroon used to work in restaurants before becoming a journalist and expert restaurant industry content creator at Eat App.

Reviewed by

Nezar Kadhem

Co-founder and CEO of Eat App

He is a regular speaker and panelist at industry events, contributing on topics such as digital transformation in the hospitality industry, revenue channel optimization and dine-in experience.

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How to Open a Bar: A Guide to Launching Your Dream Business

• Written by: Rinaily Bonifacio
• Last updated: 10 April 2024

Are you dreaming of pouring success one glass at a time and becoming the go-to spot for locals and visitors alike? Whether it's the charm of a cozy neighborhood bar or the buzz of a lively sports bar that's calling your name, the journey from daydream to 'open for business' is an adventure worth taking.

But where do you start? Opening a bar is not just about mixing drinks; it's about creating a space where stories are told, laughter is shared, and community is built. This guide is your first step towards bar ownership, designed specifically for small business owners and aspiring bar owners who are ready to tap into the bar industry.

We'll walk you through all the essential steps, from crafting a standout bar business plan to the grand opening, ensuring you're well on your way to becoming a successful bar owner. Let's raise a glass to your new venture and dive into how to open a bar that will become the heart of your local community.

Step 1: Crafting a comprehensive business plan

Defining your bar's concept and brand.

Before diving into the world of bar ownership, the first step on your checklist should be to hammer out a solid business plan. A cornerstone of this plan is your bar's concept and brand. Are you envisioning a laid-back beer bar, a sophisticated wine bar, or perhaps a sports bar buzzing with energy during every big game? Your concept isn't just a theme; it's the soul of your bar, influencing everything from decor to drink menu, and it's crucial in attracting your target market. Remember, your bar's concept and brand are what will set you apart in the bustling bar industry, making you more than just another establishment to your potential customers.

Financial planning: Profit, loss, and funding strategies

Next up, let's talk numbers. Financial planning is the backbone of any successful bar. Crafting a detailed bar business plan that covers startup costs, operating costs, and projected profit and loss statements is essential. This plan should also outline your strategies for securing funding. Whether it's through personal savings, loans, or investors, understanding the costs involved and having a clear plan to cover them will help you navigate the early stages of bar ownership without losing sleep over your financials.

Identifying and understanding your target audience

Who's going to be opening that bar tab night after night? Identifying your target audience is critical. Whether it's college students, local community members, or sports enthusiasts, understanding who your bar will serve helps tailor your concept, decor, and even drink specials. This step is about more than just knowing your audience; it's about understanding their preferences, habits, and what they seek in a bar experience. Your target audience will become your repeat customers, so make sure you're on point with what you offer.

Analyzing competition and strategizing for success

No bar is an island, and understanding the competition is key to ensuring your new bar stands out. Take the time to research existing bars and other businesses in your chosen area. What are they doing right? Where could they improve? This analysis isn't about copying what works but rather identifying opportunities to fill gaps in the market or do things better. Maybe most bars in your area don't cater to the craft beer crowd, or perhaps there's a lack of cozy, small neighborhood bars. Use this insight to position your bar perfectly within the market, offering something that attracts customers and keeps them coming back.

Step 2: Choosing the perfect location

Finding the right location for your bar can be as crucial as the concept itself. It's where budget meets visibility, and local demographics become your best friends or your biggest challenges.

Balancing budget and visibility

The location of your bar plays a pivotal role in its success. However, the most visible spots in town often come with a hefty price tag. This is where the art of balancing comes in. You'll need to find a spot that doesn't just drain your financial resources but also catches the eye of potential customers. Sometimes, a small neighborhood bar tucked away in a cozy corner can become a local gem, thanks to word-of-mouth and smart marketing. Remember, the perfect location is where your budget and your bar's visibility align to ensure a steady flow of both new and repeat customers.

Understanding local demographics and customer base

Who lives and works around your potential bar location? Understanding the local demographics is essential for aligning your bar's concept with the community. If you're opening a sports bar, positioning it near a college campus or a community with a high concentration of sports enthusiasts can be a game-changer. On the other hand, a wine bar might thrive in an area known for its culinary scene and higher disposable incomes. Dive into local community data to ensure your bar meets the needs and wants of its potential customer base.

Navigating zoning laws and health regulations

Before you get too attached to any location, you'll need to navigate the maze of zoning laws and health regulations. Not every space is zoned for use as a bar or restaurant, so it's crucial to check with local authorities before signing any leases. Additionally, health regulations can vary significantly from one area to another. These laws govern everything from the bar layout to food service requirements, impacting your operating costs and how you design your space. Getting a handle on these details early can save you from costly surprises down the line.

Choosing the right location is a balancing act that requires careful consideration of all these factors. It's about more than just finding a space; it's about securing a spot that aligns with your business model, appeals to your target market, and complies with all legal requirements. The perfect location is out there, and with the right approach, you'll find a place that not only serves as the foundation for your bar but also contributes to its growth and success in the local community.

Step 3: Legal essentials: Licenses and permits

Obtaining necessary permits and understanding local laws.

Diving into the legalities might not be the most thrilling part of opening a bar, but it's undeniably crucial. Navigating the maze of licenses and permits can feel daunting, but these are the keys to your establishment's door. Every bar owner must understand local laws and regulations that govern their business. This includes getting familiar with the specific requirements in your area for operating a business, serving food, and, of course, selling alcoholic beverages.

To start, you'll need a business license, which is your official permission to operate a business within your local jurisdiction. But don't stop there; your bar might also require a food service license, especially if you're planning on serving food alongside drinks. And remember, the requirements can vary significantly from one location to another, so it's essential to check with your local city or county government to get all the details.

The importance of a liquor license and how to secure one

Now, let's talk about the heart of your bar's legal needs: the liquor license. This isn't just another permit; it's arguably the most important document in your bar's filing cabinet. The process of securing a liquor license can be complex and time-consuming, given its critical role in regulating the sale and consumption of alcoholic beverages. The type of liquor license you'll need depends on various factors, including your bar's location, the type of alcohol you plan to sell, and whether you'll be serving food.

Securing a liquor license often involves a detailed application process, including providing information about your business structure, your personal background, and the specifics of your establishment, like your bar layout and security measures. It's not uncommon for this process to involve a public hearing, giving community members a chance to voice their support or concerns.

Given the complexity and importance of obtaining a liquor license, many business owners find it beneficial to work with a business attorney who specializes in liquor laws. This can help ensure that you navigate the process efficiently, addressing any potential hurdles along the way.

Remember, the time and effort you invest in securing the right licenses and permits are foundational to your bar's legality and long-term success. It's about more than just compliance; it's about laying the groundwork for a bar that's set to become a staple in its local community, offering a safe and enjoyable environment for your potential customers to unwind and socialize. So, take this step seriously, as it's a significant milestone on your journey to bar ownership and creating a space that's perfectly poised to serve drinks and create memories.

Step 4: Designing your bar

Creating an engaging layout and atmosphere

Designing your bar is where your concept begins to physically take shape, transforming your vision into a space that welcomes and wows your customers. The layout of your bar is more than just aesthetics; it's about creating an engaging, functional space that enhances the overall experience while maximizing efficiency for your bar staff. Consider the flow of movement within the space—both for patrons and staff. An ideal layout supports a bustling environment without bottlenecks, whether it's at the bar counter, between tables, or around the entrance.

Think about the various zones within your bar: the bar area, seating areas, perhaps a stage for live performances, and don't forget the all-important restrooms. Each area should serve its purpose well while contributing to the overall atmosphere. For instance, a beer bar might feature communal tables to encourage socializing among craft beer enthusiasts, while a wine bar may opt for more intimate seating arrangements.

Choosing decor that aligns with your concept

Your decor is a powerful tool to reinforce your bar's concept and brand, making it crucial to choose elements that align with your vision. This is your chance to tell your bar's story visually and emotionally, creating an environment that resonates with your target audience. Are you opening a sports bar? Memorabilia, multiple screens, and dynamic lighting can set the right tone. Or, if a cozy neighborhood bar is more your style, think warm lighting, comfortable seating, and local artwork.

Selecting the right decor goes beyond just picking out furniture and paint colors; it's about curating an experience that begins the moment a customer walks in. Every detail, from the style of your bar stools to the design of your menus, contributes to the overall vibe. This cohesion not only attracts your ideal customers but also makes your bar a memorable destination they'll want to return to.

Remember, the design of your bar isn't just for show; it's an essential part of your business's success. A well-designed bar can improve operational efficiency, enhance customer satisfaction, and, ultimately, impact your bottom line. So, take the time to plan your bar's design thoughtfully, ensuring it perfectly captures the essence of your brand while offering a welcoming and enjoyable atmosphere for your guests.

Step 5: Stocking up and preparing to serve

Selecting and working with liquor suppliers.

Before you can start crafting those signature cocktails or pouring pints of beer, you'll need to establish relationships with liquor suppliers. This step is critical for a few reasons. Firstly, the quality and variety of your alcoholic beverages can set you apart from competitors and attract a loyal clientele. Secondly, negotiating favorable payment terms with suppliers can significantly impact your bar's profitability and cash flow.

When selecting suppliers, consider both local and national distributors. Local suppliers can offer unique products that appeal to your target market, while national suppliers might provide better pricing for staple items. It's essential to balance variety, cost, and reliability when making your choices. Remember, the right suppliers are partners in your success, so look for companies that offer not just competitive prices but also excellent customer service and consistent delivery.

Essential equipment and supplies for your bar:

Equipping your bar goes beyond just buying glasses and a pos system. You'll need a range of equipment and supplies to ensure your operations run smoothly and efficiently. This includes:

Bar Equipment : The backbone of your bar, including beer taps, refrigeration units for wines and beers, cocktail stations, ice machines, and glass washers. Ensure that your equipment meets your specific needs in terms of size, volume, and space and electrical requirements.

POS System : A robust bar pos system can streamline your operations, from order taking to inventory management. It should be user-friendly and offer detailed reporting features to help you track sales, monitor trends, and manage inventory effectively.

Glassware : Different drinks require different types of glasses. Stock up on a variety of glasses, from beer mugs and wine glasses to cocktail glasses and shot glasses, to serve every drink appropriately.

Bar Tools and Supplies : This includes shakers, jiggers, strainers, pourers, and other tools bartenders need to craft drinks efficiently. Don't forget other essentials like napkins, straws, and garnishes.

Preparing to serve also means ensuring your staff is well-trained and ready to provide excellent service. This includes not just bartenders, but also servers, hosts, and support staff. Training should cover everything from the basics of your drink menu and serving etiquette to handling difficult situations and ensuring compliance with local laws regarding the sale of alcoholic beverages.

By carefully selecting your suppliers and equipping your bar with the right tools and supplies, you're setting the stage for a successful bar that delights customers with its drinks, service, and atmosphere. This step is about more than just stocking up; it's about creating the foundation for a bar that becomes a beloved part of the local community, attracting repeat customers and becoming a destination for new business.

Launching and marketing your bar

Congratulations! You've navigated the intricate journey of planning, legalities, design, and preparation—it's almost time to open the doors of your new bar to the world. But before the grand opening, let's focus on two crucial aspects that will ensure the longevity and success of your establishment: launching and marketing your bar.

Building a strong online presence

Having a robust online presence is non-negotiable for new businesses, especially bars. Start by creating engaging profiles on popular social media platforms where your target market spends their time. Use these platforms to showcase your bar's unique atmosphere, upcoming events, and special promotions. Don't forget to set up a Google My Business account to improve your local SEO, making it easier for potential customers to find you when they're searching for "the best bars near me."

A user-friendly website that reflects your bar's personality can also serve as a central hub for your digital presence. Include essential information like your location, hours of operation, contact details, and menu. Adding a blog can further boost your SEO efforts, drawing in more visitors with posts that highlight your expertise in the bar industry, special events, or the stories behind your signature drinks.

Effective strategies for local and digital advertising

Marketing your bar goes beyond just an online presence; it's about creating a buzz both digitally and in your local community. Consider hosting a grand opening event to generate excitement—invite local influencers, offer special promotions, and create an experience that attendees will want to share with their friends. Collaborating with other local businesses can also widen your reach and introduce your bar to a broader audience.

Utilize targeted digital advertising to attract customers from specific demographics, interests, and locations. Platforms like Facebook and Instagram offer powerful tools to narrow down your audience, ensuring your advertising budget is spent efficiently on reaching potential customers who are most likely to visit your bar.

In essence, the journey to opening a bar is filled with challenges and opportunities. By following the steps outlined in this guide—from crafting a comprehensive business plan to effectively marketing your bar—you're setting the stage for a successful venture in the hospitality industry. Remember, the key to success lies in meticulous planning, understanding your target market, and creating a unique experience that turns first-time visitors into loyal customers.

Opening a bar is more than just a business venture; it's about building a space where memories are made, and community is forged. So here's to your success as the newest bar owner on the block—may your doors open to a venture filled with prosperity, growth, and cheers!

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Table of Contents

For many with a passion for the nightlife and hospitality, the dream to open a bar remains persistent. If you’re one of them but are unsure about navigating the complexities of the bar industry, don’t have to worry. Writing a business plan is the first step in transforming this aspiration into a tangible reality. A detailed bar business plan will help streamline your vision, ensuring you’re well-prepared to venture into the bustling world of bar businesses with clarity and confidence.

What is A Bar Business Plan?

A bar business plan is a strategic roadmap that outlines your vision and the steps required to bring it to fruition. It encompasses every aspect of your business, from the fundamental business concept down to the intricate details of daily operations. In essence, it’s the blueprint to grow your business and ensure its longevity in a competitive market.

A great business plan doesn’t merely serve as an internal guide; it’s a persuasive tool to attract stakeholders, investors, and partners. It demonstrates how your bar will attract customers, generate profits, and stand out in the crowded nightlife landscape.

One might ask, “What makes a bar business plan unique?” It’s the blend of the universal principles of business, combined with the niche requirements of the bar industry. This includes, but is not limited to, licensing, menu crafting, entertainment provisions, and safety measures.

Given the dynamic nature of the bar industry, it’s important to include not only your immediate goals but also long-term objectives and strategies for adapting to market shifts. With a clear and comprehensive bar business plan, you’re laying a solid foundation for a successful enterprise.

Why A Business Plan Is Important For A Successful Bar Business? 

Owning a bar is a dream for many, but transforming this dream into a profitable reality requires meticulous planning and foresight. This is where a business plan plays a pivotal role.

Clear Vision and Objectives: A business plan helps establish a clear vision and set measurable objectives for your bar. Whether you aim to create a niche cocktail lounge, a bustling sports bar, or any other type of establishment, your business plan outlines the specific steps you’ll take to make your bar the go-to destination for potential customers. It provides direction and keeps all stakeholders aligned with the business’s overarching goals.

Financial Planning: One of the main reasons business owners create business plans is for robust financial planning. A bar has various financial intricacies, from sourcing ingredients to staffing and marketing expenses. A business plan ensures you’re well-equipped to manage cash flows, investments, and potential financial pitfalls. Moreover, potential investors often request a detailed business plan before committing funds, making this a crucial component for securing necessary capital.

Operational Efficiency: Every bar operates uniquely, depending on its target audience and theme. However, operational efficiency remains a consistent requirement for all bar owners. A business plan is a plan, after all, and it dives deep into the day-to-day operations, ensuring that every aspect, from supplier agreements to employee shifts, runs smoothly and cost-effectively.

Step-by-step Guide To Write A Bar Business Plan.

Navigating the world of the bar industry can be intricate, and the type of bar you want to open plays a pivotal role in shaping your business plan. Whether it’s a neighborhood bar, a high-end cocktail bar, or a wine bar with live music, each requires a distinct approach. This guide is tailored to help entrepreneurs and business owners create a comprehensive plan, ensuring the grand opening of the bar you dream of is a success.

1. Executive Summary

The executive summary is a concise overview of your entire business plan, acting as a snapshot that encapsulates the essence of your vision and strategy. Typically, it’s about one to two pages long and is placed at the beginning of your business plan, but it’s often written last.

What should you cover in an Executive Summary?

• Introduce your bar business, highlighting what makes your bar unique.
• State your mission and vision, giving clarity to the type of bar you aim to establish.
• Outline the main objectives, from your grand opening to long-term goals.
• Provide a financial overview, offering potential investors a glimpse into projected profits and growth.

2. Bar Description

This section delves into the specifics of your bar, painting a vivid picture of what patrons can expect and how you plan to operate.

What should you cover in the bar description section?

• Talk about your bar concept, whether it’s a wine bar, cocktail bar, or a bar with live music.
• Explain your unique selling proposition – what makes your bar stand out from the competition.
• Detail the operations, from opening hours to the ambiance you intend to create.

3. Market Analysis

This segment identifies and studies your potential customers, the location for your bar, and your competitors, helping you strategize accordingly.

Factors to cover:

• Target market: Define the demographics and preferences of those you plan to cater to.
• Location: An existing bar might already have an established clientele, but a new location needs careful consideration for accessibility, safety, and potential customer traffic.
• Competition: Analyze trends in the bar industry and see how competitors operate, ensuring your offerings are both competitive and unique.

4. Organization and Management

This is the operational backbone of your bar, detailing the structure of your business and the team that will run it.

What should you cover in the organization and management plan?

• Bar ownership information: Are you a sole proprietor, or is this part of a larger partnership or corporation?
• Profiles of your Bar management team: Include bios of key team members, showcasing their expertise and how they’ll contribute to running a successful bar.

5. Sample Menu

This section teases what your bar will offer in terms of food and beverages, acting as a tantalizing preview for potential patrons and investors.

What should you consider when creating a sample menu?

• Menu items: Detail the drinks and possibly accompanying food items.
• Unique Selling Proposition: Highlight specials or unique mixes. For instance, a cocktail bar might focus on signature mixes, while a wine bar could emphasize rare finds.
• Menu Pricing : Don’t forget to address pricing, taking into account costs and desired profit margins.

6. Marketing Strategy

This section delineates how you plan to attract customers to your bar and keep them coming back.

What should you cover in a marketing strategy for your bar business?

• Define your brand: From logo to interior decor, consistency is key.
• This could range from social media campaigns ,loyalty programs, SEO for website, or partnership with local businesses. 
• Considering using an  online food ordering system  in your bar
• Create a  digital menu with QR code  to make your menu easy for your customers to access online
• Sales Strategies: Special promotions, events, or partnerships that drive sales.

7. Business Operations

This segment breaks down the day-to-day functioning of your bar, ensuring nothing is overlooked.

BWhat operational issues should you address in your business plan?

• Supply chain: Detail your suppliers for everything from alcohol to garnish.
• Operating hours: Will you have a late-night license? Open only on weekends?
• Staffing: Consider the roles you need to hire for, from bartenders to security.
• Equipment: Everything from the bar counters to the sound system.

8. Financial Plan and Loans

How Many Ways to Fund Your Bar?

Securing funds to start and grow their bar business is a concern for many aspiring bar owners. While personal savings might be the go-to for some, others might look into bank loans, angel investors, or even crowdfunding campaigns. Exploring all available options can ensure you fund your bar easily and efficiently.

Important Questions to Consider When You Create Your Funding Request

Before approaching potential investors or lenders, it’s pivotal to have a clear plan detailing how the funds will be used. What renovations or modifications are necessary? What will the initial stock and equipment cost? What provisions have been made for operational costs until the bar starts turning a profit? Having these answers ready can make your funding request more compelling.

9. Financial Projections

When diving into the world of bar entrepreneurship, understanding your financial landscape is crucial.

Break-even analysis

 It’s an evaluation that helps you determine when your bar will be able to cover all its expenses and start making a profit.

To calculate the break-even point, use this formula: Break Even Point = Fixed Costs / (Price – Variable Costs)

Knowing this can help you write a more convincing business plan, highlighting the viability of your venture.

Projected profit and loss statement

A crucial part of your bar business plan that offers insights into potential profits and losses your business might encounter.

Cash flow analysis

This gives you the key elements to understand how cash moves in and out of your business. By following the bar business plan writing best practices, you can quickly and easily complete these projections. Ensuring that they include a winning strategy will make your financial plan more robust and appealing to potential investors.

Sample Bar Business Plan Template

The following is a comprehensive example of a bar business plan. It’s a great tool to guide you in writing your business plan.

Mission : To provide a unique drinking experience that celebrates local flavors and promotes community bonding.

Vision : To be the neighborhood’s top bar destination, known for its distinctive drinks and vibrant ambiance.

Bar Description : The Urban Vine, a wine-centric bar focusing on regional wines and locally sourced ingredients.

Costs : Estimated starting cost: $250,000.

Profits : Projected first-year net profit: $60,000.

2. Description of the Bar

Bar Concept : A contemporary wine bar featuring local wines and complementary tapas-style dishes.

Bar Name : The Urban Vine.

Bar Type : Wine bar with a secondary focus on craft beers.

Bar Location : 123 Vine Street, Downtown District.

Order Fulfillment : Table service and bar seating available, with an option for outdoor patio seating.

Working Hours : Monday to Thursday: 4 PM – 12 AM; Friday & Saturday: 3 PM – 1 AM; Sunday: 2 PM – 10 PM.

3. Menu Offer

Type of Food and Drink : Wine from local vineyards, craft beers, and tapas-style dishes made from locally sourced ingredients.

Offer : Regular wine tasting events showcasing new arrivals, paired with chef-special appetizers.

Unique Selling Point : Every wine bottle tells a local story, giving drinkers a taste of the region’s vineyards.

4. Market and Competition Analysis

Market Analysis : The Downtown District has a population predominantly comprised of working professionals aged 25-45, making it a prime location for a bar or pub.

Target Customer : Young professionals and wine enthusiasts looking for a quality drinking experience in a relaxed setting.

Size of the Target Customer : Approximately 10,000 individuals fitting the profile within a 5-mile radius.

Competition Analysis : Three other wine bars operate within the district.

Size of the Competition : Among the competitors, the largest has a seating capacity of 75, while the others can host around 50 patrons each.

Competitors’ Offer : Basic wine selections, some with occasional live music nights.

Competitors’ Prices : Average price of $8 per glass of wine and $6 for beer.

5. Investment Plan (Detailed Cost Analysis)

• Leasehold improvements: $80,000
• Furniture & Fixtures: $30,000
• Licensing & Permits: $20,000
• Initial Inventory: $40,000
• Rent: $4,000
• Salaries: $10,000
• Utilities: $1,500
• Miscellaneous: $2,500
• Total Cost : Anticipated first-year expense: $322,000.

6. Financial Forecast

 Considering the costs of starting and the projected revenue, breakeven is anticipated by month eight. The first-year projected revenue is $382,000.

Owner/Manager : Jane Doe – A passionate wine enthusiast with a background in business management.

Head Bartender : John Smith – Experienced in running a bar, skilled in crafting unique drink experiences.

Kitchen Staff : A team of three, led by Chef Anna, specializing in tapas dishes.

8. Marketing Plan

Strategies will focus on social media promotions, local partnerships, and hosting events. Ideas like wine-tasting events, collaborations with local vineyards, and monthly themed nights will be implemented. Special offers will be provided for group bookings, early bird timings, and repeat customers.

This business plan template will help prospective bar owners in crafting their unique plan to make their dream bar a reality. With a robust business strategy, The Urban Vine is set to become a renowned establishment in the Downtown District.

Tips For Creating An Effective Bar Business Plan Outline

Crafting a comprehensive bar business plan is pivotal in turning your vision into a successful venture. Here are some insightful tips to help you create an efficient outline:

Understand Your Niche : Begin by identifying the unique character of your bar. Is it a cozy neighborhood nook or a sophisticated wine bar? The specifics determine the kind of customers you’ll attract and the atmosphere you aim to create.

Include Comprehensive Details : The following bar business plan components are essential: executive summary, bar description, menu offer, market analysis, investment plans, financial forecasts, team structure, and marketing strategies. Don’t skimp on details; a comprehensive plan showcases your dedication and thoroughness.

Focus on Your Unique Selling Proposition (USP) : What makes your bar stand out? Maybe it’s an exclusive range of craft beer and wine, or perhaps it’s an innovative theme. Always include this unique factor in your business plan as it’s pivotal for attracting customers.

Plan Your Offerings : Are you focusing just on drinks or do you also plan to serve a variety of food items? Highlight your primary offerings, be it beer and wine or gourmet appetizers.

Keep It Adaptable : The bar industry is ever-evolving. Ensure your business plan is flexible enough to adapt to changing trends and customer preferences.

Seek Feedback : Before finalizing, share your draft with industry professionals or trusted peers. Their insights could help you include in a winning strategy that perhaps you hadn’t thought of.

Frequently Asked Questions

1. what makes a bar profitable.

A bar’s profitability hinges on multiple factors. A strategic location, a unique selling proposition, efficient cost management, and high-quality service all play pivotal roles. Moreover, understanding the preferences of your target audience and adapting accordingly, offering promotions during off-peak hours, and managing overheads effectively can significantly enhance a bar’s profit margins.

2. What is the executive summary of a bar business plan?

The executive summary is a concise overview of the bar’s business plan. It provides a snapshot of the business concept, its objectives, the financial outlook, and primary offerings. This section is particularly crucial for potential investors as it gives them a quick glance at the bar’s potential profitability and operational strategy.

3. How to write a good executive summary for a business plan with example?

When writing an executive summary, it’s essential to be clear and concise. Start with your bar’s mission and vision. Outline the primary objectives, the bar’s USP, and provide a brief financial overview.

Example: “ Sapphire Lounge aims to be the city’s premier wine bar, offering an eclectic range of international wines in a cozy, upscale environment. Located in the heart of the business district, our vision is to provide professionals a relaxing spot to unwind. We project an annual revenue of $500,000, with an initial investment of $150,000. Our unique wine-tasting events and wine-pairing dinners set us apart in the competitive landscape.”

4. Do bars make a lot of money?

The profitability of bars varies based on several factors like location, concept, management, and market demand. While some bars can yield high profits, especially those in prime locations with a unique concept, others might struggle due to competition, mismanagement, or changing market trends. However, with the right strategy, understanding of the target audience, and operational efficiency, bars can indeed be quite lucrative.  

Crafting a comprehensive business plan is the bedrock of any successful bar venture. By diligently addressing each section and meticulously detailing all elements you aim to include in your business plan, you’re not only preparing for potential challenges but also envisioning the pathway to success. Remember, a business plan is not a static document; it’s a dynamic blueprint that can evolve with the changing demands of the industry and your clientele. Every decision, from the drinks you offer to the promotions you run, should align with the vision set out in your plan, ensuring long-term growth and sustainability.

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Step By Step Guide To Write A Bar Business Plan

Opening a new bar requires grit and determination - as well as a fantastic bar business plan to act as your roadmap. This document can determine the future success of your new venture, so it’s essential to make it as comprehensive as possible.

But for first-time bar owners, figuring out where to start can be challenging. Our step-by-step guide to writing a business plan will help you pinpoint the finer details to consider when building a thriving bar business.

How to Write a Bar Business Plan in 9 Steps

1. bar overview.

The first step in writing a bar business plan is to establish an overview of the type of bar you want to open. You need a concept and location to shape your business model and create an executive summary for your new venture:

One of the defining aspects of your establishment is its concept and theme, which you’ll need to describe clearly in your business plan. Whether it’s a simple sports bar, speakeasy, or high-end nightclub, have a fully developed idea of what your venue will be and what purpose it will serve.

You also need to consider how to meet market needs. If you’re following trending concepts, you’ll know that roof-top bars and lounges are popular now. Or, perhaps you want your venue to be an activity-based bar that offers an art gallery, board games, or mini-golf?  

Part of your business plan also includes setting your mission statement and goals. These should outline your vision and will influence who invests in your bar. Your mission statement should be a comprehensive statement that details what sets you apart from other bars and should include your company’s values.

It’s important to link your statement to your business concept. You should consider how your values and goals are influenced by what makes your bar unique - including your overall purpose.

Next, you need to propose a location for your bar. Venues close to stores, shopping, centers, and tourist attractions, typically get good visibility and attract a lot of foot traffic. Because of the number of people moving through these areas daily, they also usually offer a decent level of security for your customers.

Another consideration for location is to avoid suburban areas where neighbors might lodge noise complaints. Should this happen, it can mean regulations stipulate earlier closing times for your venue so as not to disturb the peace.  

Finally, look for a space where there’s low competition, and your business can shine. There are plenty of strips crowded with bars and nightclubs. While these might attract a decent amount of foot traffic, you’ll need to work much harder to draw people into your place if one establishment has already made a name for itself.

For this reason, aim to secure a spot with little competition. It could mean having a unique concept bar that overshadows the competition. Or it could mean selecting a space where your type of bar doesn’t yet exist.

Ease of Accessibility

Potential customers need to be able to access your bar easily, or they will go elsewhere. They might drive, take public transport, or use a ridesharing company to travel to your venue. It’s up to you to ensure there are ways and means to get them conveniently to the front door.

Here, you should be looking for a venue where you can offer parking to your patrons. It should also be accessible to ride-hailing services and close to public transport.

2. Customer Overview

No bar establishment would be successful without its customers. As part of your bar business plan, include a profile of the type of customer you hope to attract. Consider who your target market is and how it aligns with your bar concept.

You should also outline your demographic's age, income, and interests. You’ll need this information later when developing marketing strategies for your business.  

3. Management Overview

The next step in your bar business plan is building a team structure. Your crafty bar concept requires talented people to execute it properly.

Your bartenders are the face of your establishment. Essentially, they can make or break your customer’s impression of your venue. When going through the hiring process, you’ll need to consider each individual’s personality, qualifications, experience, and skills.

Ideally, you want at least one experienced bartender who knows the ropes and can help set up operations, deal with bar management, and train the team. They will also be able to help streamline any teething issues that come up as a result of starting a new business.

From the get-go, outline your bartending teams’ possible responsibilities and the duties they’ll need to undertake. This can help set expectations ahead of advertising jobs and interviewing potential candidates.

Bar-backs don’t need as much experience as bartenders or servers as they aren’t in the customer eye as much. But they must be willing and eager to learn. They are essential to keeping everything running smoothly and work closely with the bartender as an assistant.

For this reason, they need a solid foundational knowledge of the industry, ingredients, and barware in general.

Depending on your business concept and operational model, you may or may not need to employ servers. Some high-end venues have servers to reduce the crowd around the bar and deliver drinks to the table. Additionally, you’ll need to hire servers if you offer any food.

When building out your staffing plan, you’ll need to determine where your establishment lands with that requirement. Make a note here to look for bar industry candidates with alcohol training who know how to serve alcohol safely and legally.

4. Drinks Menu Plan

Your drinks menu is your bar’s product. To be successful, it’s essential to get this offering right.

While your beverage list will undoubtedly change over time, don’t neglect to include a sample menu in your business plan. This will give potential investors an idea of what’s in store and possibly help you secure funding.

Descriptions

Your drinks menu is the selling point of your bar business and the star of the show. If you can excite and entice patrons with promises of wonderful flavors, you’ll be onto a gold mine.

So, it’s important to include product descriptions in your menu, particularly for signature drinks. Each listing should detail the ingredients of individual drinks, any garnishes they may come with, and add-ons your customers can choose from.

Beverage Names

A successful bar is only as strong as its product. So, aligning your drinks with your bar’s brand and concept is important. Get together with a mixologist to create one or several signature drinks that will be uniquely your own. Give these drinks names that play to the overall theme of your business.

Product Sourcing

Many establishments lean on particular products as their claim to fame. For example, you might want to be known as a French wine bistro, local brewery, or craft cocktail spot. Decide what you wish your unique story to be and reflect this in your plan for product sourcing.

Of course, sourcing locally is the most sustainable way to go. You can also build relationships with vendors in your community, which can help bring people into your venue.  

Industry Trends

It’s essential to do your research and stay abreast of industry trends. Note what these are in your business plan, as this will help keep customers walking through your doors.

For example, one of the most popular cocktail trends in the bar scene is smoke-infused or smoked cocktails. Some mixologists may also use smoke bubbles to infuse the cocktail with a smoky aroma. This trend has gained fame in the last few years and adds a new twist to the cocktail-drinking experience.

Small Food Menu (Small Bites)

Food and beverages go hand in hand. If you plan a small menu with, say, tapas or easy eats, you can increase your revenue. It will prevent your guests from leaving to find something to eat.

Suppose you don’t want the hassle of food storage and preparation. In that case, consider formulating a partnership with a local eatery or small food business that can deliver a menu of select freshly-made items to your establishment.

5. Licenses

It’s key to plan out your business licenses carefully. If you don’t have the right ones in place, you won’t be able to operate.

Tavern License

When putting together your bar business plan, it’s important to research whether you need a tavern license. It’s a government-issued license for restaurants, bars, or businesses with more than 50% liquor sales.  

Beer and Wine License

If you’re planning on starting a beerhouse or wine lounge, you may only need to apply for a beer and wine license. This will restrict your sales to wine and malt beverages, as you won’t be able to sell hard liquors like spirits. Whether you need to apply for this license depends on your bar's concept.

Health/Food Service License

With a small food menu, you’ll likely need to note on your restaurant and bar business plan to apply for a food service license. It’s a requirement to serve any type of food within your establishment. To obtain a food service license, you’ll need to ensure that your bar follows strict rules and regulations laid out by the U.S. Food and Drug Administration .

Music License

Music is one of the key elements of creating ambiance in a venue. But did you know that streaming music from your digital subscription with Spotify or Deezer is not actually operating within the law? This is true even if you’re playing music through a TV or radio.

The right way to go about this is to pay a Performance Rights Organization (PRO) or music service that will send royalties to the relevant artists. For the most part, this doesn’t apply to bands or performers who play live at your venue.

6. Market Research

Performing market research as part of your bar business plan is key to understanding your opportunities and how to capitalize on them.  

Industry Research

Part of your research should be to determine the market size you can potentially snag. Look at other bars already operating in the area, consider the industry as a whole, and determine what trends are driving it forward.  

Target Market

What needs will your bar solve for your target market? You can find out who they are and what they want by considering the local neighborhood and bar type.

It’s also an idea to look at census data to see how many potential customers within a certain demographic live within a reachable radius of your proposed location.

Market Share and Price Point

When doing your market analysis, consider similar bar businesses that have come before you. What do their successes and failures look like? Why did they crash and burn, or soar to new heights? Take these lessons and figure out how to apply them so your business can succeed.

Furthermore, what will your entry into the market mean for the local community? Are you creating new job opportunities? Or are you going to bring in an unruly crowd of patrons they hope to avoid? Knowing this information will help you be accepted and create connections rather than catastrophes.

Lastly, consider what your ‘competitors’ or other similar industry businesses are charging for their drinks and services. Run a competitive analysis in the area to determine your potential price point and how you can stand out.

7. Bar Marketing

Utilizing a marketing plan in the right way helps you take measured steps to get your establishment in front of potential customers. Here are the strategies to get started:

Create a Brand

The key to starting a successful business - and keeping it open - is to create a memorable brand identity. Your toolbox for promoting your brand should include your logo, colors, and ‘personality.’ Use these in a way that becomes synonymous with your bar, no matter where people interact with it.

Marketing Tools

Besides developing your brand identity, consider the channels you can market on to attract customers. At the very least, it should include your social channels, website, and media influencers.

8. Other Avenues to Increase Revenue

Besides being a bar and welcoming guests who come in with reservations or foot traffic, there are other avenues to increase your revenue.

Hosting events such as karaoke nights, wine tastings, or live music is an excellent way to attract larger crowds to your bar. You are guaranteed certain sales, can charge a cover fee, and get new people walking through the door.

If you go this route, we recommend using event management software to keep everything on track and work effortlessly with your team.

It’s no surprise that all businesses go through an ebb and flow of customer traffic. A great way to increase cash flow during slower periods is to introduce ideas like drink specials and happy hour discounts.

When you’re writing up a business plan, don’t forget to brainstorm ideas for a pre-opening promotion as a way to test the market. This can be as simple as a soft launch or as elaborate as a grand-opening celebration.

9. Financials

An important aspect of your business plan is to outline your potential start-up costs. These, along with the costs of day-to-day business operations, and financial projections, will attract or deter potential investors.

Your business plan should also highlight possible funding options like loans and investment opportunities you have available. Additionally, you’ll need to draw up a break-even analysis to determine how much revenue it will take to turn profits.  

Realizing your dream of owning the hottest bar in town starts with a great business plan. It will need to cover everything from your mission statement to your concept and drinks menu. This will help you build a sturdy management team, hire great employees, and attract people to your venue.

Want to know more about Perfect Venue for event management? Try it free to find out how it can be a fit for your new business.

Have thoughts on the article? Feel free to email us at [email protected] - we'd love to hear it!

How to Open a Bar Business in (2024): Step-by-Step Guide

Free How to Write a Bar Business Plan + Free Template Template

• Vinay Kevadia
• January 3, 2024

18 Min Read

• Startup costs: $149,000- $436,500
• Industry trend: Growing
• Difficulty: Moderate
• Profitability: 10-15%
• Time to build: 9-12 months
• Commitment: Full-time

Love the spirit of social interactions, lively places, and a little booze to enlighten the mood?

Well, it’s time to nurture that entrepreneurial spirit and consider starting a bar for your business venture.

Now, you might have a rough idea about how to open a bar. But, nothing concrete enough to venture in the right direction.

Well, this step-by-step guide is articulated to perfection to bring clarity to all your vague ideas. It will guide you precisely as to how and where to place the right foot to mark the beginning of a successful bar venture.

Maybe pop yourself a glass of beer and get started.

How much money do you need to start a bar business?

The cost of starting a bar in the US costs anywhere between $149,000- $436,500 and more. These costs are highly influenced by factors such as location, size, concept, and compliance requirements.

How much profit does a bar make on average?

The gross profit margins for a bar span anywhere around 70-80% . This is extremely lucrative compared to other businesses in different industries.

Bars have a high markup of up to 500% on their alcohol offerings, making it an extremely profitable venture. However, the margins do vary depending on the type, concept, and size of your bar.

As a small business owner of a bar, you are in for a good, profitable ride after establishing a strong foothold in the market. Let’s dive further into the market by analyzing the pros and cons of starting a bar.

Pros and Cons of Opening a Bar

Starting a bar is indeed a profitable venture for any business owner. However, like every business, it has its own set of pros and cons:

• Profit margins: Lucrative profit margins compared to other businesses.
• Recurring revenue: Regular loyal customers build profits for you.
• Exciting environment: Thriving fun environment buzzing with people and networking opportunities.
• High startup cost: The costs for licenses, equipment, rent, and renovations can soar high.
• Compliance: Moderately regulated industry with licensing and safety compliances.
• Competition: Extremely competitive marketplace with saturated players.

Wondering how to open a bar? Let’s unravel a step-by-step guide to set up your bar.

How to Open a Bar Business: The Ultimate Checklist

Table of Contents

• Determine the Right Bar Type
• Choose a Bar Concept and Brand
• Choose a Name for Your Bar
• Find the Right Location for Your Bar
• Write a Bar Business Plan
• Design a Bar Layout
• Design Your Menu
• Secure Funding for Your Bar
• Register Your Bar
• Obtain Business Licenses and Permits
• Get Business Insurance
• Find a Liquor Suppliers
• Purchase Necessary Equipment and Supplies
• Hire Bartenders and Staff
• Pre-launch and Marketing Plan
• Host a Soft Opening

From determining the right bar type to undertaking appropriate market research to marketing the bar- let’s unravel detailed steps to open a bar.

1. Determine the Right Bar Type

The first step towards starting your own bar business is to determine the right type of bar for your unique idea. The decision you make here will largely influence the startup costs, target market, profit margins, and compliance requirements of your business.

Here are a few different types of bars you can choose from:

• Specialty bar, i.e. wine bar, cigarette bar, tiki bar, etc.
• Neighborhood bar
• Nightclub, pub, or tavern
• Cocktail bar

Consider your investment and budgeting needs before selecting a bar type. For instance, starting a nightclub is extremely specific compared to a brew pub brewing its own craft beers.

Don’t try to be everything to everyone. Focus on a particular bar type and carve your niche in it.

2. Choose a Bar Concept and Brand

The most exciting part about opening your own bar is getting to work on its unique concept and branding.

Here are a few questions answering which can help you finalize your bar concept:

• What type of tone do you want your bar to set? i.e. casual, sophisticated, rustic, vibrant, loud.
• What type of music will be played at your bar?
• What type of service style will the bar offer?
• What will be the ambiance of your bar?
• Will the decor be upscaled luxurious or rustic cozy?
• Will you serve an extensive food menu to cater to your guests?

For instance, you can set up a small neighborhood bar hosting low-key karaoke nights for people in the local community to unwind or a sophisticated wine bar for wine enthusiasts.

It’s always the tiniest details, from decor to serving style and customer experience that add up to make a successful bar.

How a customer feels when they enter your bar will largely affect the success of your business. So spend a good amount of time brainstorming the ideas for your bar outlook.

Also, clearly define the value proposition of your bar business and ensure that you deliver a consistent message through every activity, henceforth.

3. Choose a Name for Your Bar

The bar name will be your identity by which the people will remember you. Consider it as a starting point of branding that will subtly and largely influence your business in the bar industry.

Now brainstorm some ideas for your bar name. Ideally, it should match the concept and theme of your bar to make it easily recognizable and recallable.

Keep it short and simple but something really catchy. Adding jargon, slang or complex words isn’t a good idea.

Also, the name should be unique for registration and marketing purposes. If you wish to open a bar from some other name, register a doing business as a (DBA) name as well.

Don’t cancel any idea right from the beginning. Be open and let the creative juices flow in as you brainstorm the banger name.

Take suggestions from experts and your close ones before finalizing a name.

Want a Unique Name for your Bar?

Generate a brandable and catchy business name in seconds with our free business name generator for bars.

4. Find the Right Location for Your Bar

Your dream bar needs an address and this address needs to be near your target market for them to have easy access.

Ideally, start sourcing for your perfect location as soon as you plan to open a bar. It will take months before you find a location that’s strategically right for your bar.

Begin by identifying the space requirement for your bar concept. Generally, 1000-1500 sq. ft. is an ideal spacing for neighborhood bars and taverns. However, if you are planning a sports bar or nightclub, sizing between 2000-5000 sq. ft. and more should remain ideal.

Also, keep in mind your monthly rental budget to shortlist the areas suitable for your bar. However, budget shouldn’t be the only parameter. You need a place that resonates with your bar’s concept and target audience.

For instance, an upscale tavern cannot be placed in an outskirt. It needs a perfect location in a posh locality where the customers can visit easily on regular weekdays.

Lastly, keep in mind the local regulations regarding bars in your region. There may be certain restrictions in regards to where can you not open a bar.

Many bar owners argue that location is not that important in dictating the success of the bar. With the right approach and marketing technique, even the basement bars in hidden alleys can be a huge success.

Well, whichever school of thought you believe in, ensure that you finalize the location as soon as possible.

5. Write a Bar Business Plan

Yes, you do need a business plan to establish a fundamentally strong foundation for your bar business. A bar business plan is like a GPS that will drive your bar to its desired destination.

Now, if you are planning to acquire funding from investors or a loan from a bank, a business plan will indicate your preparedness to start a business . It will show the investors that you have undertaken essential market research and analysis to withstand the competitive bar market.

Want to know what a comprehensive and thorough business plan looks like? Well, here are the key components that a detailed plan includes:

• Executive summary
• Business Overview
• Industry and market analysis
• Operations plan
• Marketing and Sales plan
• Key management team
• Financial plan

As a bar owner, no one knows your business better than you. So get to the work and write a solid business plan that is an exact but refined reflection of your business idea using a bar business plan template.

Not very good at writing? Need help with your plan?

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6. Design a Bar Layout

How will your bar look and feel?

After finalizing the location, you need an expert who can help bring together your conceptualized ideas into reality.

Get the floor map of your bar ready. Ensure the layout establishes a flow of operations and movement in the bar.

If you are planning to serve food, you might need a kitchen area to undertake the food preparation process. In such a scenario, consider the space and electrical requirements of back-of-the-house as well.

Coming to the visual aspects, you need all the decor elements to come together to create a cohesive welcoming atmosphere. The ambience as we say, must embrace the visitor with a warm welcome as soon as they step in.

Create a Pinterest board and sit with the designer to discuss your ideas. Tell them about your vision and ask them to provide mock-ups of different design samples.

Remember the budget as the decor and renovation expenses can quickly roll up.

Purchasing an existing bar might prove extremely beneficial at this point. Also, talk to some bar owners in your neighborhood and gather their perspectives on design and ambiance.

7. Design Your Menu

A great ambiance can get your target market to your doorstep. But if they don’t like what’s on the menu, they are likely to never return back.

You might have a rough idea regarding what you want to serve. Now, it’s time to elaborate on that idea and seal it.

Decide your core offerings considering your bar concept. For instance, craft beer for a beer bar, a variety of spirits and alcoholic beverages for a cocktail bar, wine for a wine bar, and food and drinks for a sports bar.

Also, choose what snack will you be serving alongside. Will you make those snacks in-house or outsource them from some vendor? This will influence the kitchen and bar equipment you will require.

Check out the menu from competing bars and talk to those bar owners to understand what’s actually working. And lastly, get an expert on board to help you engineer a profitable and viable menu.

8. Secure Funding for Your Bar

You aspire to be a bar owner. But do you have enough funds to start your own bar?

Setting up a bar business is quite expensive. From lease rental expenses to renovation and licensing costs, you need pretty hefty savings to fund your own bar.

Evaluate the initial investment needs of your business by assessing the startup costs and the operating costs for the first few months. Depending on your needs, you can choose one of these funding sources:

• Bank Loans: Bank loans are easy to acquire against mortgages. However, if you are planning a large amount, you may want to consider other options.
• SBA Loans: Perfect for small business owners, SBA-guaranteed loans can be availed by following certain formalities. However, qualifying for these loans is a bit of a challenge.
• Investors: An investor may find it hard to resist a brilliant bar idea. For a certain stake in equity, they can fulfill your capital requirements.
• Venture Capitals: VC firms can review the feasibility of your new bar business and can be a great sourcing fund when you plan to scale.
• Crowdfunding
• Friends and family

Review the pros and cons of each funding source before taking a grant from anyone. Ideally, for a small amount friends and family help should suffice.

9. Register Your Bar

It’s now time to give legal identity to your new bar business. This is essential to avoid any hassles and legal complications in the future.

Hire a specialist to look after registration or follow these 2 steps to complete registration on your own.

Select a business entity

A business structure is essential to legally register your business. The entity or business structure you select will dictate your ownership, taxes, liabilities, and funding options.

Here are a few business entities you can choose for your business in the bar industry:

• Sole proprietorship
• Partnership
• Limited Liability Company (LLC)
• Corporation or S.Corp

LLC is usually the most preferred form of bar ownership that will help you secure your personal assets from business liability. However, assess the pros and cons of selecting different entities before registering your business with the state.

Apply for tax registration & business EIN

Identify the tax regulations for your bar business and apply for tax registration. Also, get your EIN (Employer Identification Number) from an IRS (Internal Revenue System) portal.

EIN is your unique security code that will allow you to apply for bank accounts, and credit cards, and fill out tax forms.

10. Obtain Business Licenses and Permits

Now, determine the licensing requirements for your bar business to make it legally compliant. Acquire these licenses before you open a bar to avoid legal charges and penalties.

The licensing requirements may vary from state to state depending on your bar’s concept. However, here are a few common business licenses you must consider getting before opening a bar:

• Food service license: If you plan on serving food to your customers, a food service license is a must. The cost of licensing may vary depending on the size of the menu and the equipment you will use.
• Liquor license: A liquor license is essential to sell alcoholic beverages to your potential customers. Now, the type of liquor license you require may vary depending on your service style, alcoholic beverage offerings, and the state of operation. Get a professional to help you analyze the requirements.
• Entertainment license: Are you planning to host karaoke nights, musical evenings, or movie evenings at your new bar? If so, get yourself an entertainment license.
• Outdoor seating permit: Bar owners planning to open a bar with an outdoor seating concept must get this permit. It will allow you to serve your customers in outdoor areas.
• Occupancy permit: A building code permit specifying the number of people that can sit in the bar at a time.

Now, hire an expert business attorney who can look after documentation and get you essential licenses.

11. Get Business Insurance

After acquiring the essential liquor license and permits, it is now time for insurance.

Bar businesses are susceptible to a variety of risks and liabilities. An appropriate insurance cover is essential to safeguard your assets and business in case of unexpected events.

Wondering what type of insurance should you get for your own bar?

• General liability insurance: Get general protection against property damage, bodily injuries, and personal accidents. If there is one insurance you must get before you open a bar, this is it.
• Liquor liability insurance: Offers coverage against damage caused by intoxicated customers to property and other customers.
• Property protection insurance: Offers protection against the damage caused to property in case of fire, theft, or natural calamities.
• Workers compensation insurance: Mandatory for bars that employ people on a full-time basis. This insurance offers compensation to cover employees’ medical expenses and sick leaves.

The premium amount might seem overwhelming in the beginning. However, it is advisable to get insurance for every possible business area to get all-round coverage and protection.

12. Find a Liquor Suppliers

After acquiring essential licenses and permits to serve alcohol, it’s now time to explore potential vendors and suppliers for your bar.

Firstly, identify the type of spirits, beers, and wines required for your bar. The need for your bar depends on your concept. For instance, good quality craft beers will attract customers in a brewpub while spirits make a good fit for taverns and clubs.

Now, start looking for local vendors sourcing high-quality authentic products. Explore their brand offerings, payment terms, pricing, delivery timeline, and minimum purchasing requirements to finalize your top vendors.

It’s important to focus on quality and original products instead of pricing entirely. So look out for vendors that promise to maintain cordial business relations for a long time.

13. Purchase Necessary Equipment and Supplies

You need a variety of technologies, tools, and bar equipment to deliver exceptional customer service at your bar.

First and foremost, invest in a reliable POS system that streamlines order management, reservations, payments, and other operations of your bar. Identify the best POS systems in the market and make an investment in a multi-functional technology.

Moving forward, assess the condition of used equipment and tools if you are purchasing an already existing bar. Create a checklist and identify what your bar requires to operate optimally.

For instance,

• Bar tools: Muddlers, Jigglers, cocktail shakers, strainers, stirrers, etc.
• Glassware: Brandy snifters, wine glasses, beer pints, shot glasses, mixing glasses, etc.
• Refrigeration: Bottle coolers, ice machines, refrigerators, etc.
• Electrical equipment: Bar mixers, blenders, glass washers, ovens, microwaves, etc.

Keep in mind your bar’s concept and needs before purchasing the equipment. For instance, sports bars require LED screens, speakers, and other equipment to host sports-watching nights.

Lastly, visit the nearby established bar and assess their inventory to get a proper understanding of the required equipment.

14. Hire Bartenders and Staff

It is now a perfect time to start assembling your bar team. As a bar owner, you need to figure out what type of skilled professionals you need to hire and how many.

The number of employees required varies for different bar concepts. For instance, sports bars require more employees than neighborhood bars or specialty bars.

To manage the bar perfectly, you may hire for the following positions:

• Bar manager

Train these employees in their roles and help them understand the company culture. After all, only a well-coordinated team can work towards delivering excellent customer service.

15. Pre-launch and Marketing Plan

All these strategic troubles up until now were to ensure that you set up a profitable bar business. Now that you are almost there, you want people to know about this beautiful bar of yours. And that’s where marketing comes in.

Ideally, you should start marketing much before actually opening a bar. Start by creating a healthy buzz for your bar using a tried-and-tested mix of marketing strategies.

Wondering what type of marketing strategies should you try for your bar? Let’s check that out:

• Place signboards: Place the signboards outside your bar even when it’s under construction. This will capture the attention of passersby and create awareness about your existence.
• Social Media: Create a considerable social media base of fan following for your bar by posting fun and engaging content regularly.
• Website: You need a web presence to succeed and a website is one important way of achieving recognition. Develop your site, publish your menu, and keep it interactive by updating the latest events and happenings.
• Influencer marketing: Connect with prominent influencers from the bar and restaurant industry and strike a deal with them to promote your bar amongst their audience.
• Yelp and GMB: Gather as many reviews as you can on Yelp and Google My Business. Customer testimonials work better than your salesperson in winning your audience’s trust.
• Host events: Bring together your local community for fun events like karaoke nights, ping pong games, musical performances, or art evenings.
• Happy hours: Encourage people to visit you at odd hours by offering happy hour deals. After all, who wouldn’t love a discount on alcoholic beverages?
• Launch special deals: Announce special deals and coupon discounts on sites like Groupon.

Now, fix a budget for different marketing activities and test different methods to see what works for you. The initial investment in marketing can soar high, however, if marketed properly, your bar is likely to succeed amongst the right people.

Keep in mind that, marketing will only drive your potential customers to you. It’s upon you to retain them and turn them into repeat customers.

16. Host a Soft Opening

All set? Before you announce the grand opening of your bar, how about a thought for a soft opening? It is like a practice run for your staff to host limited people in controlled settings before the actual grand opening.

Invite your friends, influencers, or family members for a special pre-launch event. Scrutinize the operations, and serving style and collect first-hand reviews from your close ones to make necessary last-minute changes.

Now go ahead and announce the grand opening night of your dream bar.

Kudos!! You now have an innate understanding of everything that is essential to open your own bar.

Let’s take the first step and write a stellar plan for your bar business. Writing a business plan will ensure that there remains no oversight in the planning and execution of your bar idea.

Download our sample bar business plan and use it as a reference point to write your bar plan.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks, AI-assistance, and automatic financials make it easy.

Frequently Asked Questions

How do you open a small bar.

Begin by writing a business plan for your bar to ensure its success in the long run. Now follow this checklist to ensure that you do everything right while opening your business:

• Finalize a location suitable for your concept.
• Get the floor plan ready and finalize the bar’s layout.
• Finalize the bar menu.
• Get essential licenses, permits, and insurance.
• Purchase the essential equipment.
• Build your bar’s team.
• Prepare for launch and marketing activities.

Can I start a bar with no money?

Ideally, you should have at least a few thousand dollars to invest in your business. However, it is possible to start with no money of your own by acquiring loans and funding from investors and VC firms.

How much do small bar owners make?

A small bar owner can expect a monthly salary of $3,300 initially, given that they reinvest a large chunk of their profits back into the business. However, depending on the popularity of the bar and its profit margin, an owner can make more than $100,000 annually.

What are the unique marketing activities for a bar?

Are you an entrepreneur who knows how to open a bar but lags behind when it comes to marketing? Well, try these marketing activities for your bar:

• Launch happy hour offers.
• Introduce loyalty programs.
• Offer special discounts on platforms like Groupon.
• Host fun events like Ping-pong, karaoke nights, musical evenings, etc.
• Create a stellar social media presence and share engaging bts.
• Create vlogs on special recipes.
• Bring on board a famous DJ, bartender, or barista.

What type of bars are the most profitable?

All sorts of bar enjoy a lucrative profit share. However, sports bars, clubs, and a mix of bar and restaurant businesses are the most profitable ones.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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How to Open a Bar

Denise Prichard

Opening a bar involves more than just mixology passion or hospitality insight; it’s about mastering multiple roles, from creative mixologist to savvy businessperson. This article provides practical advice, genuine insights, and inspiration for starting your bar venture.

The bar industry is a vibrant yet fiercely competitive arena, and opening a new bar is undoubtedly a challenging endeavor. Yet, despite the challenges, countless new bars emerge each year across the United States. What drives the success of a bar isn’t just a passion for mixing drinks or knowing the ins and outs of the industry. It’s about truly understanding the delicate balance between running a smooth operation, building a dedicated team, crafting effective marketing strategies, and managing finances wisely.  

This article serves as a comprehensive overview of these key areas, along with sharing some best practices to keep in mind.  

How much does it cost to open a bar?

Starting a bar or restaurant business requires a significant financial investment, with costs varying depending on factors such as location, size, concept, and amenities. Startup costs typically include expenses such as lease or purchase of a commercial space, renovation and build-out costs, permits and licenses, equipment and furnishings, initial inventory, marketing and promotional expenses, and working capital to cover operating expenses until the business becomes profitable. On average, the startup costs for opening a bar can range from $100,000 to $ 85 0,000 or more , depending on the scope and scale of the venture.  

How to create a bar business plan

Crafting a bar business plan is the foundational step in realizing your vision and ensuring the viability of your venture. Begin by defining your bar’s concept, target market, and unique selling proposition. Conduct thorough market research to understand consumer preferences, competitor analysis, and industry trends. Outline your financial projections, including startup costs, revenue forecasts, and break-even analysis. A well-developed business plan not only serves as a roadmap for your operations but also serves as a valuable tool for attracting investors and securing financing.  

What sections to include in your bar business plan template

• Bar industry & competitive analysis: Before diving headfirst into your bar venture, it’s crucial to gain a deep understanding of the local market and competitive landscape. Conduct an industry analysis to assess the dynamics of the bar scene in your area, considering factors such as local economy, neighboring businesses, and demographic trends. Additionally, conduct a competitive analysis to identify other bars in the vicinity, analyze their offerings, and evaluate potential gaps or opportunities in the market.  
• Operations plan: Your operations plan outlines the day-to-day functioning of your bar, covering everything from vendor relationships to labor management. Consider aspects such as staffing levels, training programs , and shift scheduling to ensure smooth operations. Embrace technology solutions for tasks like hiring, scheduling, and payroll management, carefully evaluating their costs and benefits in relation to your business needs.  
• Bar marketing plan: A robust marketing strategy is essential for attracting patrons and building brand awareness for your bar. Define your target audience, communication channels, and promotional tactics to effectively reach potential customers. Develop creative marketing initiatives to differentiate your bar from competitors and cultivate a loyal customer base. Whether it’s social media campaigns, special events, or community partnerships, your marketing plan should align with your overall brand vision and business goals.  
• Financial analysis & growth plan: Financial planning is a cornerstone of your bar business plan, providing insights into revenue projections, cost estimates, and investment requirements. Detail the major expenses associated with launching and operating your bar, including lease or purchase costs, equipment purchases, inventory, and staffing. Develop a projected Profit and Loss (P&L) statement to forecast your bar’s financial performance, factoring in both fixed and variable costs. Consider potential sources of funding, whether from investors or loans, and articulate how these funds will be allocated to support your bar’s growth and sustainability.  

What is the Average Profit Margin for a Restaurant?

Accounting for bars: understanding the basics

Keeping accurate financial records is vital for the success of your bar and its ability to stay profitable. Whether you’re using specialized bar accounting software or working with an external accounting firm, there are key aspects to consider as a bar manager or owner.  

This includes setting up a clear fiscal calendar, organizing General Ledger (GL) codes, managing Accounts Payable (AP) for healthy cash flow, and adjusting budgets based on sales variations. While navigating bar accounting may seem overwhelming, many bar owners find relief in outsourcing this task to accounting firms. However, taking the time to understand these fundamental components of bar accounting is a valuable step in ensuring the financial health of your bar.  

What drives the success of a bar isn’t just a passion for mixing drinks or knowing the ins and outs of the industry. It’s about truly understanding the delicate balance between running a smooth operation, building a dedicated team, crafting effective marketing strategies, and managing finances wisely.  

New bar concept and design

The concept and design of your bar are instrumental in shaping its identity and attracting customers . Consider factors such as ambiance, theme, and layout to create a cohesive and memorable experience for your guests. Collaborate with designers and architects to bring your vision to life, paying attention to every detail, from furniture selection to lighting design. Infuse elements of your brand personality into the decor and ambiance, fostering a sense of authenticity and connection with your target audience.  

Types of bars and bar businesses

In the world of bars, there’s a wide array of options to explore, each with its own distinct vibe and customer base. Let’s take a look at some popular types of bars:  

• Neighborhood bar: A cozy and casual bar that serves as a local hangout spot, offering a relaxed atmosphere and a selection of beers, cocktails, and pub fare. Neighborhood bars focus on building strong connections with their community and often host events or activities to engage patrons.  
• Cocktail lounge: A sophisticated and upscale establishment known for its craft cocktails, premium spirits, and elegant ambiance. Cocktail lounges prioritize quality over quantity, curating a menu of inventive drinks and providing attentive service in a refined setting.  
• Sports bar: A lively and energetic venue where sports enthusiasts gather to watch live games, enjoy food and drinks, and socialize with fellow fans. Sports bars feature multiple large-screen TVs, a diverse selection of beers on tap, and a menu of classic pub grub favorites.  
• Wine bar: A chic and intimate space dedicated to showcasing a curated selection of wines from around the world. Wine bars offer a relaxed setting for wine enthusiasts to explore different varietals, enjoy small plates or cheese boards, and engage in wine tastings or educational events.  
• Brewpub: A hybrid concept that combines a brewery and a pub, offering a rotating selection of house-brewed beers alongside a menu of hearty comfort food. Brewpubs emphasize the craft beer experience, often featuring brewery tours, taproom events, and beer pairing dinners.  
• Theme bar: A concept-driven bar that immerses patrons in a specific theme or era, creating a memorable and immersive experience. Theme bars range from retro speakeasies and tiki lounges to futuristic sci-fi bars, each with its own unique decor, music, and cocktail menu.  

Naming a bar

Selecting the perfect name for your bar is more than just a branding exercise – it’s an opportunity to make a lasting impression and communicate your unique identity. B rainstorm potential names that resonate with your concept, values, and target market. Conduct thorough research to ensure the availability of the name for trademark registration and domain acquisition. Test the name with focus groups or trusted advisors to gauge its appeal and relevance before making a final decision.  

Pricing out your bar menu

Striking the right balance between profitability and affordability is crucial when pricing your menu offerings . Consider factors such as ingredient costs, portion sizes, and market demand when determining menu prices. Implement pricing strategies, such as tiered pricing, bundle pricing, or seasonal promotions, to maximize revenue and encourage upselling. Regularly review and adjust menu prices based on feedback, sales data, and changing market conditions to remain competitive and profitable.  

Selecting a point of sale system for bars

A reliable point-of-sale (POS) system is the backbone of your bar’s operations, facilitating transactions, tracking sales, and managing inventory. Evaluate POS systems based on features, such as ease of use, customization option s, and integration capabilities with other software solutions. Choose a provider that offers robust customer support and ongoing updates to ensure the smooth functioning of your bar’s operations.  

Selecting your bar management software

In addition to a POS system, investing in bar management software can streamline various aspects of your bar’s operations, from inventory management to staff scheduling. Identify your specific needs and priorities, such as menu engineering , labor cost optimization, or customer relationship management, when selecting a software solution. Look for user-friendly interfaces, scalability, and compatibility with existing systems to maximize efficiency and productivity.  

Wrapping it up

Opening a bar is a journey that requires careful planning, creativity, and a commitment to excellence. By following the steps outlined in this guide, you can navigate the complexities of the industry with confidence and clarity. From conceptualizing your bar’s identity to implementing robust operational systems, each stage of the process contributes to the success and sustainability of your venture. Embrace the challenges, embrace the opportunities, and toast to a future filled with prosperity and fulfillment in the vibrant world of bar ownership. Cheers!  

Schedule a free demo of Restaurant365 today.

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How to open a bar in 7 simple steps.

Get ready to immerse yourself in a journey filled with regulatory hoops, logistical challenges, and operational details. But remember, the reward lies in creating a memorable space that’s the talk of the town, a place where stories are spun and friendships forged over a glass of something special. Your entrepreneurial journey starts here.

The Bar Industry

In addition, bars have to contend with fluctuating trends, evolving consumer preferences and regulatory requirements, making it imperative to keep a finger on the pulse of the industry. Navigating this landscape successfully requires strategic planning, resilience and a passion for the hospitality sector.

Why Own Your Own Bar?

The challenges faced by bar owners.

The key to success is often in meticulous planning, resilience, and an unwavering commitment to your vision. Here are some common challenges that bar owners typically face:

How Much Does it Cost to Open a Bar?

Initial investment and ongoing costs for the bar owner.

Depending on your menu, initial inventory might cost between $5,000 to $15,000. Don’t forget to factor in ongoing costs such as rent, utilities, employee salaries, insurance and regular replenishment of inventory. As you hone your strategies and determine how to price liquor for your establishment, these costs may adjust slightly.

Potential Financial Challenges in Bar Ownership

Steps to open a bar.

Each step towards opening your bar is a milestone in your entrepreneurial journey. Let’s take a closer look at these pivotal steps, guiding you from ideation to opening night.

Decide on the Type of Bar to Open

Create a detailed bar business plan.

Remember to detail your vision for the bar, its concept, target market and how you plan to set yourself apart from competitors.

Secure a Location for the New Bar

Obtain the liquor license and permits, design a successful bar, hire and train staff.

Your staff is the face of your bar, and hiring the right team is crucial. Look for experienced bar staff who share your vision for customer service. Once hired, invest in bartender training to ensure your team is knowledgeable about your menu and can provide an exceptional customer experience. And provide resources to guide them through your ideal processes, like a solid bar opening and closing checklist.

Market Your Bar Business

Effective marketing can set your bar apart. Consider a mix of traditional and digital marketing strategies, including social media, local press and special event hosting. Regularly evaluate your strategies and adjust based on what’s working best.

How to Open a Bar with No Money

Exploring financing options, bartering and partnerships in the bar industry.

Bartering and forming partnerships can be smart ways to reduce costs. Consider trading services with local businesses or forming partnerships with bar suppliers for discounted rates. Collaboration can lead to win-win situations in the competitive world of bar ownership.

FAQs: How to Open a Bar

How hard is it to open a bar, how much money should i save before opening a bar, how long does it take to open a bar, what kind of bar is most profitable.

The profitability of a bar largely depends on its location, target market and management. However, establishments like specialty bars offering craft cocktails or unique experiences, high-volume nightclubs in popular areas, and sports bars in sports-loving communities tend to be quite profitable. It’s essential to align the bar type with the local market demand.

How do I attract customers to my bar?

How profitable is owning a bar, how much startup money for a bar, is owning a bar a good career.

Owning a bar can be a rewarding career for individuals who enjoy the hospitality industry, have a knack for business and are prepared to work hard. It provides opportunities for creativity, community building and entrepreneurship. However, it’s a challenging industry and demands long hours, resilience and excellent customer service.

Are sports bars profitable and what should I consider if I want to open one?

What strategies can i implement to ensure a profitable bar business, how much does it cost to open a bar in houston, how to open a bar in wisconsin.

To open a bar in Wisconsin, start by developing a comprehensive business plan. Next, choose a location and secure the necessary licenses and permits, including a liquor license. You’ll need to ensure your bar meets health and safety codes. Then, focus on designing your bar, hiring and training your staff, stocking inventory and marketing your business.

How to open a bar in Oregon?

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How to write a restaurant business plan + free template (2024)

By Homebase Team

Whether you’re living the dream of opening your own restaurant or reworking your existing concept, a restaurant business plan template takes a ton of stress out of writing a business plan.

With prompts for every section you’ll need, we’ve created our free restaurant business plan template to be your operational foundation (you’re welcome!). Something you can download, customize, and come back to whenever you make business decisions for your restaurant.

But first, let’s go through all the ways a written business plan helps shape your restaurant, and why it boosts your business’s chance of success.

What is a restaurant business plan?

A restaurant business plan is a written document that lays out an overview of a restaurant, its objectives, and its plans for achieving its goals.

It’s needed across all kinds and sizes of restaurants, and can be a handful of pages long or much more detailed. A well-written restaurant business plan not only helps you organize your ideas, it’s also a key part of getting investor funding .

Starting a restaurant? Here’s why you need a business plan. 

Creatively, opening a new restaurant can be incredibly exciting. But it’s also super complicated. From licenses, to equipment, to building a team, each phase needs a lot of attention to detail.

Before you jump in, it’s important to shape your plan of attack, organizing your business ideas into a clear, concise narrative that an outsider could easily understand. A business plan is an essential part of this—and here’s why.

Your business plan helps you:

Set short and long-term goals.

A restaurant business plan not only shows how your business will operate in its early stages, it also shows what steps it’ll need to follow as time goes by. Setting both your short and long-term goals at the outset makes you more likely to achieve them.

Understand your resource needs.

Going through the exercise of writing a restaurant business plan is as important as having the finished document in front of you. As you organize your thoughts, your resource needs—from the amount of capital you need to raise all the way down to the equipment you need to find—will take shape. 

Reduce potential risks.

Sadly, some 60% of restaurants fail within the first year of opening. One of the main reasons? A failure to plan. Your business plan will help you plan for most challenges at your restaurant before they come up, keeping you on the right side of that number.

Develop a marketing strategy.

As you do your market analysis and figure out who your customers are likely to be, the ways you’ll promote your business will get clearer. The more specific you are with your market research, the easier and more effective your marketing efforts will be.

Build your team.

Your business plan helps you see who you’ll need on your team and which roles you’ll need to fill first . For investors, it’s a document showcasing everyone’s collective experience, personalizing your restaurant in their eyes and packing a professional punch.

Share your vision.

Whether you’re using your business plan to secure startup funding or need additional capital after you’ve already opened, your restaurant business plan shows an investor or lender exactly why they should get behind you. 

The 9 elements of a strong restaurant business plan.

Your restaurant business plan will be unique to your vision. But all good business plans hit standard points, and whoever reads yours will expect them. As you develop and finalize your ideas, here are nine key elements you should include. 

1. Executive summary

A strong restaurant business plan begins with a strong executive summary. This is a sharp, concise overview of your restaurant and your opportunity to grab people’s attention.

Here’s where you communicate, in a nutshell, what kind of restaurant you want to run. Which demographic will you be targeting? Why is your business something the community wants or needs? Especially if you’re asking for financing, include a snapshot of your financial information and growth plan as well. 

Your executive summary should briefly lay out:

• Your mission statement. Why are you starting this restaurant now, in this location? 
• Your idea. What’s the concept of this restaurant?
• Your plan of execution. What are your key steps to making this concept work?
• Your potential costs. What are your expected expenses?
• Your anticipated ROI. How much do you expect your restaurant to make?

Many investors will make a split-second decision off of the executive summary alone—it might be all they’re going to read, so make every word count.

2. Company description

Now it’s time to let your creativity out and give your restaurant concept life. Give a more detailed description of your concept that lets your passion for what you’re creating come through. 

Flesh out all the other details of your proposed restaurant, including your restaurant’s:

• Style of cuisine and any unique selling points or differentiators that will make customers choose you
• Service style
• Restaurant name (or at least ideas)
• Size, seating style, and capacity
• Location ideas or the location you’ve scouted or secured
• Ambiance ideas including décor, lighting, and music
• Operating hours
• Other service offerings like whether you’ll offer delivery or takeout, delivery guarantees, catering, and any retail products you plan to sell
• Legal structure (e.g. sole proprietorship, LLC) 
• Existing management and their roles, including yours
• Experts or advisors you’ve brought on board

3. Market analysis

Present the research you’ve done on your target market. Make a couple of buyer personas to represent your future customers, explaining:

• Where your target customers live
• Their income levels
• Their dining-out and/or ordering-in pain points (e.g. lack of late opening hours, lack of family friendliness)
• How often they dine out or order in

Go through which other restaurants already have a customer base in your area, then explain why people will choose your restaurant over others. 

4. Sample menu

Even at the business plan stage, menu engineering is crucial. The specific menu items you’re likely to serve—the biggest thing that will set you apart—should shine through with descriptions that are short, clear, and evocative. If you have an executive chef already, this is a great area for them to add input.

Use language that will get people excited about trying your offerings. Hire a designer or use an online program to create your own mockup using the same colors, fonts, and design elements as the rest of your branding. 

5. Business structure

Dive deeper into your business structure (sole proprietorship, partnership, LLC, etc.) and organizational management. Show what your different employee positions will be (co-founders, managers, servers) to give a sense of your team’s makeup. An organizational chart can be helpful here.

Investors won’t expect you to have your entire team on board at this stage, but you should have at least a couple of people firmed up. For the roles that are already filled, including your own, summarize your collective experience and achievements. Bullet points work well, or some people choose to go into more detail with full resumes for the executive team or critical team members.

6. Restaurant design and location

Long before you sign a lease, make sure that your new offering will outshine existing ones nearby. In this section of your business plan, explain why your chosen location, or the ones you’re narrowing down, are going to be an effective space for your target market.

Consider things like:

• Neighborhood demographics
• Foot traffic
• Labor costs
• Accessibility

Hand in hand with location, your restaurant’s interior design—both in its floor plan and its ambiance—is also crucial to your business’s viability. Come up with a captivating restaurant design that communicates your theme and matches your cuisine, creating a memorable customer experience. Decide how many tables you’ll be serving, and plan out any outdoor seating.

Touch on things like:

• Team uniforms
• Flatware and glassware

7. Marketing strategy

How do you plan to market your restaurant? Your plan for grabbing customers’ attention is vital to getting diners through the door, especially at the beginning before word-of-mouth advertising has taken off.

What kind of offers will you provide? Will you have promotional events, direct mail, or a social media strategy ? Go through your planned marketing campaigns and explain how each of them will help secure your target market. 

8. Takeout and delivery options

If you’ve decided to have takeout and delivery at your restaurant—pretty important for most target markets—decide whether you’ll use your own drivers or a professional fleet like Uber Eats or DoorDash.

Show how you’ll provide the smooth digital experience your customers will expect. Decide if and how your website will come into play, bearing in mind that in 2023, 40% of consumers preferred to order directly from the restaurant website .

9. Financial projections

Your restaurant’s projected budget need to be solid, especially if you’re using your business plan to get startup funds. Without this, investors have no way of knowing if your business is a good investment or when it will become profitable.

Hire an experienced accountant with expertise in running restaurants and write down your market research, your planned costs , and your projected income. Show how investor funds will be used and whether you’ll be putting up collateral to get a loan. Give a sales forecast, usually for the first five years, and make sure to give a break-even analysis.

Get started with our free restaurant business plan template.  

As the team behind Homebase , we know how much there is to consider when you’re starting a new restaurant. We’re proud to be an all-in-one partner for thousands of restaurants large and small—helping make everything from staffing, to scheduling, to team communication easier for business owners.

And we know that your restaurant business plan is a high-stakes document. That’s why we created our free restaurant business plan template to make sure nothing gets overlooked.

Check out our free, downloadable template to get your ideas into shape, get started on your restaurant journey—and get investors excited to jump on board with you. 

Download your restaurant business plan template for free: Restaurant business plan + free template (2024)

Stop chasing down phone numbers with our built-in team communication tool. Message teammates, share updates, and swap shifts — all from the Homebase app.

Restaurant business plan template FAQs

What is the basic planning document for a successful restaurant.

The basic planning document for successful restaurants is a restaurant business plan. A restaurant business plan lays out a restaurant’s long and short-term goals and its plans for achieving those goals. Restaurant planners use it both to finetune their ideas and to secure investor funding.

How to write a restaurant business plan.

When writing a restaurant business plan, include an executive summary, a detailed restaurant description, market analysis research, a sample menu, a breakdown of your business structure, the design and location of your restaurant, your planned takeout and delivery options, your marketing strategy, and your financial projections.

What makes a business plan template for restaurants different from a standard business plan?

A restaurant business plan template differs from a standard business plan by including things like menu engineering, interior design, kitchen operations, front-of-house management, takeout and delivery offerings, and location analysis, which are unique to the food service industry.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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Want to Open a Restaurant? Here's a Step-By-Step Guide This guide provides all the information you need to open and operate a successful restaurant.

By Laura Tiffany Edited by Melissa Malamut

Key Takeaways

• Profit margins are thin for restaurants; make a detailed business plan that accounts for every dollar.
• Investing in experienced servers and cooks will pay off in the long term.
• Pick a service style and food concept and let those decisions dictate your decor, menu and ambiance.

Opinions expressed by Entrepreneur contributors are their own.

Starting and opening a new restaurant is an exciting venture that can be both a rewarding and challenging experience. It takes work, however. Opening a successful restaurant requires a strong business plan, an understanding of the local market, an eye for the right location and staff, permits and business licenses, inventory and supplies management, appealing menus and more.

If it's your first time, you'll need to look beyond the grand opening and strategize for generating a cash flow that allows you to do more than just break even. Still, with the right guidance, you can make your dreams of owning a successful restaurant come true. This guide will give you all the information you need to start and open a restaurant. It will cover everything from creating a new business plan to setting up operations and marketing your restaurant. By following this guide step by step, you can open a restaurant that will attract customers for years to come.

What's Inside

Target markets

Restaurant service styles, selecting a food concept, steps to opening your own restaurant, working in a restaurant.

• Safety regulations

Restaurant startup resources

Breaking into a new market is a challenge, and no single food-service operation has universal appeal. Many newer entrepreneurs have trouble accepting this fact, but it's impossible to capture 100% of the market. When you try to please everyone, you end up pleasing no one. So focus on the five or 10% of the target market that you can get — and forget about the rest.

With that said, who's eating at restaurants? Let's look at the main market categories of food-service business customers:

• Generation Z The youngest consumers represent about 20% of Americans and make up the first digitally native generation. Born between 1997 and 2012, Gen Zers grew up with smart phones, and many are socially minded – embracing the crossover of commerce and mental health, for example. And if you want their attention, act fast: young consumers are quicker to tune out ads than older generations.
• Millennials This generation was born between 1980 and 2000. Millennials account for more than three times as many people as Generation X, and they're a prime target for a food-service business. This generation often opts for fast-food and quick-service items, with about 25 percent of their restaurant visits going to burger franchises , followed by pizza restaurants at 12 percent.
• Generation X Generation X is a label applied to those who were born between 1965 and 1980. This group is known for strong family values. While earlier generations strove to do better financially than their parents, many Gen Xers are focused on their children. They are concerned with value, and they favor quick-service restaurants and midscale operations that offer all-you-can-eat salad bars and buffets. To appeal to this market group, offer a comfortable atmosphere that focuses on value and ambience.
• Baby boomers Born between 1946 and 1964, baby boomers make up the second-largest segment of the U.S. population, after millennials. Prominent in this generation are affluent professionals who can afford to visit upscale restaurants and spend money freely. Many boomers are becoming grandparents, making them a target of restaurants that offer a family-friendly atmosphere and those that provide an upscale, formal dining experience.
• Empty nesters This group consists of older Gen X and seniors (people in their early 50s to about age 64). Empty nesters typically have grown children who no longer live at home, and their ranks will continue to increase as Gen X grows older and their children leave home. With the most discretionary income and the highest per-capita income of all the generations, this group typically visits upscale restaurants. They are less concerned with price and are more focused on excellent service and outstanding food. Appeal to this group with elegant surroundings and a sophisticated ambience.
• Seniors The senior market covers the large age group of people age 65 and older. Generally, the majority of seniors are on fixed incomes and may not often be able to afford upscale restaurants often, so they tend to visit family-style restaurants that offer good service and reasonable prices. "Younger" seniors are likely to be more active and have more disposable income than "older" seniors, but the group typically appreciates restaurants that offer early-bird specials and senior menus with lower prices and smaller portions, since their appetites are less hearty than those of younger people.

Restaurants are classified into three primary categories: quick-service, midscale and upscale. Quick-service restaurants are also known as fast-food restaurants. These establishments offer limited menus of items that are prepared quickly and sold for a relatively low price. In addition to very casual dining areas, they typically offer drive-thru windows and take-out service.

When people think of fast-food restaurants, they often think of hamburgers and french fries, but establishments in this category also serve chicken, hot dogs, sandwiches, wraps, salads, pizza, fresh seafood, grain bowls and foods from other regions.

Midscale restaurants, as the name implies, occupy the middle ground between quick-service and upscale restaurants. They offer full meals but charge prices that customers perceive as providing good value with plenty of special offers . Midscale restaurants offer a range of limited and full-service options. In a full-service restaurant, patrons place and receive their orders at their tables; in a limited-service operation, patrons order their food at a counter and then receive their meals at their tables. Many limited-service restaurants offer salad bars and buffets.

Upscale restaurants offer full table service and do not necessarily promote their meals as offering great value; instead, they focus on the quality of their cuisine and the ambience of their facilities. These are the places that find themselves on a list of trip ideas for tourists looking for great food from a renowned chef. Fine-dining establishments are at the highest end of the upscale restaurant category and charge the highest prices.

Restaurant patrons want to be delighted with their dining experience, but they don't necessarily want to be surprised. If you're anticipating a family-style steakhouse (based on the name or the décor of the establishment) but find yourself in a more formal environment with a bewildering — and pricey — gourmet menu, the surprise may keep you from enjoying the restaurant. Concepts let patrons know in advance what to expect, and they provide some structure for how to operate restaurants. Here are some of the more popular restaurant concepts:

• Seafood Quick-service seafood restaurants generally offer a limited range of choices, often restricted to fried seafood. Midscale and upscale seafood restaurants offer a wider selection, prepared in ways other than fried, such as baked, broiled and grilled. Seafood can be a risky area on which to focus, as prices are always changing, and many kinds of seafood are seasonal. Also, quality can vary tremendously. When shopping for seafood, make sure the items are fresh and meet your standards of quality. If you are not happy with what a distributor offers, your customers won't be, either.
• Steakhouses Steakhouses are part of the midscale and upscale markets. Midscale steakhouses are typically family-oriented and offer a casual environment with meals perceived as good values. In terms of décor, comfort is emphasized and Western themes are popular. Upscale steakhouses offer a more formal atmosphere and may serve larger cuts of meat that are of better quality than those served in midscale restaurants. Upscale establishments also charge higher prices, and their décor may be similar to that of other fine-dining establishments, offering guests more privacy and focusing on adult patrons rather than families.
• Family-style restaurants As the name implies, these establishments are geared toward family fun, and the often-reasonable prices also appeal to seniors. They offer speedy service and their menus are designed to satisfy a broad range of customers, from children to seniors. Family-style restaurant prices may be higher than those at fast-food restaurants, but these establishments provide table service to compensate. The décor of family-style restaurants is generally comfortable, with muted tones, unremarkable artwork and plenty of booths and wide chairs. Booster seats and highchairs for children are readily available.
• Casual-dining restaurants These establishments appeal to a wide audience, providing a variety of food items — appetizers, salads, main dishes, desserts. Casual-dining restaurants offer comfortable atmospheres with midrange prices. Many center on a theme that's incorporated into their menus and décor. You may need to get your liquor license, depending on what you plan to serve.
• Global cuisine These restaurants enjoy a significant share of the U.S. restaurant market. They range from quick-service places with limited selections to upscale eateries with a wide variety of menu items. Their menus typically include Americanized versions of global dishes with unique flavors, as well as more authentic food. The three most popular kinds of these food styles are Italian, Chinese and Mexican. Other popular types include Indian, Thai, Caribbean, Cuban, French, German, Japanese, Korean, Greek, Turkish and Vietnamese.
• Pizzeria You have two primary choices when starting a pizzeria. One is a to-go restaurant in a modest facility with a pizza- and beer-forward menu, limited seating and a self-service atmosphere. The other is a full-service pizza restaurant with a menu that features not only a variety of pizzas, beer and wine, but also Italian entrees (spaghetti, ravioli, lasagna), side dishes (including salads) and a few desserts. The foundation of a pizzeria is the pizza, of course. If you don't know how to make a good pizza, hire someone who does. Invest in top-quality ingredients and preparation methods, and make every pizza as if you're going to eat it yourself.
• Sandwich shop/delicatessen One reason sandwich shops are so successful is because they enjoy high profit margins. Sandwich shops and delicatessens can also change their menus quickly and easily adapt to current tastes. In the wake of the pandemic, when many regular customers no longer worked from offices, delis have also incorporated delivery and catering into their business models. Most sandwich shops serve only sandwiches, possibly with some side dishes or desserts. A delicatessen usually offers a more extensive menu, including sandwiches, prepared meats, smoked fish, cheeses, salads, relishes and various hot entrees.
• Coffeehouse With Americans consuming more than 140 billion cups every year, coffee is the country's most-popular beverage (not counting water, of course). People frequent coffeehouses and espresso bars for a variety of reasons: to meet with friends, to do work, for a quick lunch, for an afternoon perk or simply to start each morning with a great cup of Joe. The most successful coffeehouses have heavy foot traffic and high-volume sales. Many will serve between 200 and 300 cups per day, despite having limited floor space and modest seating capacity. Profit margins for coffee and espresso drinks are extremely high — after all, you're dealing with a product that's more than 95 percent water. At the same time, the average cup of coffee costs around $3, so you need volume to reach and maintain profitability. Besides specialty roasted coffee by the cup, most coffeehouses also have espresso-based drinks (cappuccinos, lattes, etc.), assorted teas, bottled water and fruit juices, along with an inviting assortment of baked goods, a selection of desserts and coffee beans by the pound.
• Bakery With competition from supermarkets that have in-store bakeries, "bread-only" retail bakeries have almost disappeared from the United States. Bakeries today usually offer cakes, scones, bagels and coffee drinks, and sometimes even offer full dining menus, including sandwiches, hot entrees, beer and wine. Consumers love fresh bakery goods, but the market is extremely competitive. As you develop your particular bakery concept, you'll need to find a way to differentiate yourself from other bakeries in town.

Find the concept that best suits you

Before you can begin any serious business planning, you must first decide what specific segment of the food-service industry you want to enter. Your own personality and tastes will dictate whether you choose to open a commercial bakery, a coffee cart, a fine-dining restaurant or another type of operation. Then, once you've decided what business suits you, it's essential to figure out the niche you'll occupy in the marketplace.

Related: The Top Full-Service Restaurant Franchises in 2024

For example, are you an early riser, or do you prefer to stay up late and sleep late? If you like — or at least don't mind — getting up before dawn, your niche may be a bakery or a casual breakfast-and-lunch operation. Night owls are going to be drawn to the hours required for bar-and-grill type restaurants, fine-dining establishments and even pizzerias.

Do you like dealing with the public, or are you happier in the kitchen? If you're a people person, choose a food-service business that gives you plenty of opportunity to connect with your customers. If you're not especially gregarious, you'll probably lean more toward a commercial type of business, perhaps a bakery or even a catering service, where you can deal more with operational issues than with people.

Some other types of questions to ask yourself include: Do you have a passion for a particular type of cuisine? Do you enjoy a predictable routine, or do you prefer something different every day? Are you willing to deal with the additional responsibilities and liabilities that come with serving alcoholic beverages?

As you do this self-analysis, think about your ideal day. If you could be doing exactly what you wanted to do, what would it be? Once you've decided on the best niche for you as an individual, it's time to determine if you can develop a niche in the market for your food-service business.

There's no perfect recipe for opening a successful restaurant, but there are proven actions that will get your business off the ground and help you start feeding customers . Follow these steps when opening a restaurant:

1. Write a business plan

Armed with practical experience, you're ready to put together your business plan — the most critical element of your restaurant. Map out everything on paper before you buy the first spoon or crack the first egg.

When you're writing a business plan you should include:

• A clear definition of your concept
• A description of your market
• Your menu and pricing
• Detailed financial information, including data on your startup capital (amount and sources) and your long-term income and expense forecasts (including operating costs such as kitchen equipment and food costs)
• A marketing plan including target customers
• Employee hiring
• Training and retention programs
• Detailed plans that outline how you'll deal with the challenges restaurateurs face every day (including health department compliance, customer experience and expansion)
• An exit strategy

A well-crafted business plan is the cornerstone of any successful restaurant. It's best to have it professionally written, but if you're short on cash, you can also draft a document yourself. Just be sure that your plan is comprehensive and as accurate as possible. Include realistic projections, research data (such as current industry trends) and thorough analyses of the competition. Because restaurant margins are so thin, it's also smart to detail every single cost you might encounter — down to the price of napkins, ice, internet , glassware and cooking oil. No matter what you decide, your business plan should be a living document that you update and refine as your restaurant evolves.

2. Fund your business

How much money you need to start depends on the type of business, the facility, how much equipment you need, whether you buy new or used, your inventory, marketing and necessary operating capital (the amount of cash to carry you until your business starts generating profits). It's easy to spend hundreds of thousands of dollars starting a restaurant, but it's not essential. For instance, when Borealis Breads owner Jim Amaral started his first bakery in Maine, he rented a space that had been a commercial bakery and came complete with mixers, benches, ovens and other equipment. He was able to start with just $10,000 he'd borrowed from family and friends, and used that primarily for inventory.

Regardless of how much you need, you will definitely need some cash to start your food-service business. Here are some suggestions of where to go to raise your startup funds :

• Your own resources Do a thorough inventory of your assets. People generally have more assets than they realize, including savings accounts, retirement accounts, equity in real estate, recreation equipment, vehicles, collections and other investments. You may opt to sell assets for cash or use them as collateral for a loan.
• Family and friends The logical next step after gathering your own resources is to approach friends and relatives who believe in you and want to help you succeed. Be cautious with these arrangements; no matter how close you are with the person, present yourself professionally, put everything in writing, and be sure the individuals you approach can afford to take the risk of investing in your business.
• Partners Using the "strength in numbers" principle, look around for someone who may want to team up with you in your venture. You may choose someone who has financial resources and wants to work side by side with you in the business. Or you may find someone who has money to invest but no interest in doing the actual work. Be sure to create a written partnership agreement that clearly defines your respective responsibilities and obligations. And choose your partners carefully — especially when it comes to family members.
• Government programs Take advantage of the abundance of local, state and federal programs designed to support small businesses. Make the Small Business Administration (SBA) your first stop, but be sure to research other programs, too. Underrepresented groups and veterans should check out special financing programs designed to help them get into business. The business section of your local library is a good place to begin your research.
• Banks and other lending institutions Despite the general mood of tight credit, many banks are still willing to make small-business loans . They may even be more open now as they seek to increase their loan portfolios.
• Be prepared with a business plan and financial projections These help prove your concept and show lenders you are serious about your business. Also, compare rates from multiple lenders, and don't forget to factor in closing costs and other fees.
• Venture capitalists and angels If you have a capital-intensive concept with proven profitability potential, venture capitalists or angel investors may be willing to provide the funding you need for a stake in your business.

As you can see, there are many ways to get the capital you need to get your restaurant off the ground — you just need to be organized, prepared and willing to do your research.

3. Choose a location

Depending on where you start your food-service business and the particular type of business you choose, you can spend anywhere from $2,000 to $12,000 on monthly rent. That doesn't include outfitting a kitchen or renovating the space, which can cost tens of thousands of dollars.

Related : The Best States to Start a Business .

Not every food-service operation needs to be in a retail location, but many do. For those relying on retail traffic, here are some factors to consider when deciding on a restaurant location :

• Anticipated sales volume How will the location contribute to your sales volume?
• Accessibility to potential customers Consider how easy it will be for customers to get into your business. If you are relying on strong pedestrian traffic, consider whether or not nearby businesses will generate foot traffic for you.
• The rent-paying capacity of your business If you've done a sales-and-profit projection for your first year of operation, you will know approximately how much revenue you can expect to generate, and you can use that information to decide how much rent you can afford to pay.
• Restrictive ordinances You may encounter unusually restrictive ordinances that make an otherwise strong site less than ideal, such as limitations on the hours of the day that trucks can legally load or unload.
• Traffic density With careful examination of food traffic, you can determine the approximate sales potential of each pedestrian passing a given location. Two factors are especially important in this analysis: total pedestrian traffic during business hours and the percentage of people likely to patronize your food service business.
• Customer parking facilities The site should provide convenient and adequate parking, as well as easy access for customers.
• Proximity to other businesses Neighboring businesses may influence your store's volume, and their presence can work for you or against you.
• History of the site Find out the recent history of each site under consideration before you make a final selection. Who were the previous tenants, and why are they no longer there?
• Terms of the lease Be sure you understand all the details of the lease, because it's possible that an excellent site may have unacceptable leasing terms.
• Future development Check with the local planning board to see if anything is planned for the future that could affect your business, such as additional buildings nearby or road construction.
• Appearance It's important that the building or site be attractive and inviting in order to draw customers.

Once you've chosen a location, it's time to nail down the particulars of your food-service business.

4. Create a menu

As you put together a plan for your food-service business, stay up-to-date on the "it" foods of the moment, but don't go chasing fads or trends. Let these inform your menu, rather than dictate it. At the same time, be sure to keep the kids in mind as you plan your selections. If families are a key part of your target market, you'll want a range of four or five items in smaller portions that youngsters will enjoy. While most restaurants still offer fixed kids' meals, you might consider allowing your young diners to choose among a selection of nutritious options.

Your menu should also indicate what dishes can be prepared to meet special dietary requirements, and be sure to offer alternative protein options for vegans, vegetarians and pescetarians (with these noted on the menu).

Though menu variety has increased over the years, menus themselves are growing shorter. Busy consumers don't want to read a lengthy menu before dinner; dining out is a recreational activity, so they're in the restaurant to relax. Keep your number of items in check and menu descriptions simple and straightforward, providing customers with a variety of choices in a concise format. It also makes things easier in the kitchen: fewer recipes to memorize, fewer ingredients to source, etc. The simpler the menu, the easier it'll be to turn crazy dinner rushes and make it through particularly stressful services.

5. Hire employees

One of the biggest challenges — for businesses in all industries — is a lack of qualified labor. As the food-service industry continues to grow, the demand for workers in an already diminished labor pool is also increasing. Finding qualified workers and rising labor costs are two key concerns for food-service business owners .

Related: How to Know When to Hire Your First Employee

The first step in developing a comprehensive HR program is to decide exactly what you want someone to do. The job description doesn't have to be as formal as one you might expect from a large corporation, but it needs to clearly outline the job's duties and responsibilities. It should also list any special skills or other required credentials, such as a valid driver's license and clean driving record for someone who is going to make deliveries for you.

Next, you need to establish a pay scale. You should do research to find out what the pay rates are in your area. You'll want to establish a minimum and maximum rate for each position. You'll pay more even at the start for better qualified and more experienced workers. Of course, the pay scale will be affected by whether or not the position is one that is regularly tipped. Your payroll costs, including your own salary and that of your managers, should be about 24 to 35 percent of your total gross sales.

Every prospective employee should fill out an application — even if it's someone you already know, and even if that person has submitted a detailed resume. A resume is not a signed, sworn statement acknowledging that you can fire the person if he or she lies about his or her background; the application, which includes a truth affidavit, is. The application will also help you verify the applicants' resumes, so you should compare the two and make sure the information is consistent.

Here are some tips to help you find and keep great people:

• Hire right Take the time to thoroughly screen applicants. Be sure they understand what you expect of them. Do background checks. If you can't do this yourself, contract with an HR consultant to do it for you on an as-needed basis.
• Create detailed job descriptions Don't make your employees guess about their responsibilities .
• Understand wage-and-hour and child labor laws Check with your own state's Department of Labor to be sure you comply with regulations on issues such as minimum wage (which can vary depending on the age of the workers and whether they're eligible for tips), and when teenagers can work and what tasks they're allowed to do.
• Report tips properly The IRS is very specific about how tips are to be reported; for details, check with your accountant or contact the IRS .
• Provide initial and ongoing training Even experienced workers need to know how things are done in your restaurant. Well-trained employees are happier, more confident and more effective. Plus, ongoing training builds loyalty and reduces turnover. The National Restaurant Association can help you develop appropriate employee training programs, and groups such as The LEE Initiative run programming to promote healthy kitchen environments.

There are several categories of personnel in the restaurant business: manager, cooks, servers, busboys, dishwashers, hosts and bartenders. When your restaurant is still new, some employees' duties may cross over from one category to another. For example, your manager may double as the host, and servers may also bus tables. Be sure to hire people who are willing to be flexible in their duties.

Standard restaurant roles

Manager The most important employee in most restaurants is the manager. Your best candidate will have already managed a restaurant or restaurants in your area and will be familiar with local buying sources, suppliers and methods. You'll also want a manager with leadership skills and the ability to supervise personnel while reflecting the style and character of your restaurant.

To get the quality of manager you want, you'll have to pay well. Depending on your location, expect to pay a seasoned manager $50,000 to $60,000 a year, plus a percentage of sales. An entry-level manager might earn $40,000 to $45,000 but won't have the skills of a more experienced candidate. If you can't offer a high salary, work out a profit-sharing arrangement — it's an excellent way to hire good people and motivate them to build a successful restaurant. Hire your manager at least a month before you open so they can help you set up your restaurant.

Chefs and cooks When you start out, you'll probably need three cooks — two full time cooks and one part time. Restaurant workers typically work shifts from 10 a.m. to 4 p.m. or 4 p.m. to closing. But one lead cook may need to arrive early in the morning to begin preparing soups, bread and other items to be served that day. One full-time cook should work days, and the other evenings. The part-time cook will help during peak hours , such as weekend rushes, and can work as a line cook during slower periods, doing simple preparation. Cooking schools can usually provide you with leads to the best in the business, but look around and place ads online before you hire. Customers will become regulars only if they can expect the best every time they dine at your restaurant. To provide that, you'll need top-notch cooks and chefs.

Salaries for chefs and cooks vary according to their experience and your menu. Chefs command salaries significantly higher than cooks, averaging $55,000/year. You may also find chefs who are willing to work under profit-sharing plans. You can pay part-time cooks on an hourly basis; check around for the going rate in your area.

Servers Your servers will have the most interaction with customers, so they need to make a favorable impression and work well under pressure. There are two times of day for wait staff: very slow and very busy. Schedule your employees accordingly. The lunch rush, for example, starts around 11:30 a.m. and continues until 1:30 or 2 p.m. Restaurants are often slow again until the dinner crowd arrives around 5:30 or 6 p.m.

Because servers in most establishments earn a good portion of their income from tips, they're usually paid minimum wage or just over it. When your restaurant is new, you might want to hire only experienced servers so you don't have to provide extensive training. As you become established, however, you should develop training systems to help both inexperienced employees and veteran servers understand your philosophy and the image you want to project.

6. Market and promote your restaurant

Every business needs a marketing plan , and your food-service business is no exception. As you consider various marketing vehicles, consider the loyalty program. Research conducted by the National Restaurant Association found that 78% of customers are more likely to visit a restaurant where they can earn loyalty points.

Word of mouth and earned media are also strong ways to earn business, so make the foundation of your marketing program an absolutely dazzling dining experience that customers will want to talk about and repeat. Ask every new customer how they found out about you, and make a note of this information to track how various marketing efforts are working. You can then decide to increase certain programs and eliminate those that aren't working.

A key question for restaurant owners is this: Do your marketing materials — menus, signs, table tents, social media posts, ads and other items — send an accurate message about who you are and what you do?

The first step in creating a complete marketing package is to know your market, and it's not enough to gather demographic information once. Markets change, and food-service businesses that don't change their marketing strategies with population shifts are missing out on a lot of opportunities. Next, consider every element in your facility — the parking lot, interior decorations, printed items, etc. — to make sure they contribute to your marketing message.

One cheap and easy way to promote your food-service business is by building a presence on social media and giving away gift certificates, such as dinner for two or a free pizza. After all, promotions are one of the 7 Ps of marketing . Post weekly specials, host contests, engage with followers and give patrons a behind-the-scenes look at running your business — cooking tips, kitchen hacks, signature recipes. You can also connect with local social media influencers to visit your restaurant and post the delicious results (food videos are especially popular on platforms such as Instagram and TikTok).

Consider donating coupons and gift certificates to be used as door prizes at professional meetings or for nonprofit organizations to use as raffle prizes. Just be sure every coupon or gift certificate clearly identifies your business name, location, hours of operation and any restrictions on the prize. Some other promotional methods you can try include local event or sporting team sponsorships, discount coupon books, frequent-dining clubs, menu promotions and contests.

7. Choose an efficient layout

Layout and design are major factors in your restaurant's success. As you factor it into your startup costs, you'll need to take into account the size and layout of the dining room, kitchen space, storage space and office. Typically, restaurants allot 45 to 65 percent of their space to the dining area, approximately 35 percent to the kitchen and prep area, and the remainder to storage and office space.

Dining area This is where you'll be making the bulk of your money, so don't cut corners when designing your dining room. Visit restaurants in your area and analyze the décor. Watch the diners. Do they react positively to the décor? Is it comfortable or are people shifting in their seats throughout their meals? Note what works well and what doesn't.

To accommodate the different groups of customers, use tables for two that can be pushed together in areas where there is ample floor space. This gives you flexibility in accommodating both small and large parties. Place booths for four to six people along the walls.

Production area

Too often, the production area in a restaurant is inefficiently designed, resulting in a poorly organized kitchen and less than top-notch service. Keep your menu in mind as you determine each element in the production area. You'll need to include space for receiving, storage, food preparation, cooking, baking, dishwashing, production aisles, trash storage, employee facilities and an area for a small office where you can perform daily management duties.

Arrange your food production area so that everything is just a few steps away from the cook. Your design should also allow for two or more cooks to be able to work side by side during your busiest hours.

Dealing with customers and playing the role of elegant host are only part of a restaurateur's many duties. Food-service business operators spend most of their time developing menus; making sure their operation is in compliance with a myriad of local, state and federal regulations; ordering inventory and supplies; managing personnel; creating and implementing marketing campaigns; completing a wide range of paperwork; and performing other administrative chores. There are fun aspects of working in restaurants, but starting, running and growing a food-service business is also hard work.

Regardless of the type of food-service business you intend to start, successful restaurateurs agree that the best preparation for owning a restaurant is to work in someone else's first. Doing so will give you significant insight into the realities and logistics of the business. Think of it as getting paid to be educated. Certainly you should read books and take courses, but you should also plan to work in a restaurant for at least a few years doing as many different jobs as possible. And if you're not actually doing the job, pay attention to the person who is — you may find yourself doing it when your own restaurant is unexpectedly shorthanded.

Ideally, you should work in a restaurant similar to the type you want to open. You might find you don't like the business or realize you're more suited to a different type of operation. Regardless, you'll learn a lot — about the industry and yourself.

"As soon as I started working in a restaurant, I realized this was my passion," says restaurateur Scott Redler. "When you have a busy restaurant, and you're watching everything happen as it should, it's just a wonderful feeling of satisfaction."

Redler has worked in restaurants for more than four decades, first opening a Chinese fast-food joint at the age of 26. That venture failed within eight months, after which Redler went to work for a large restaurant company, where he eventually advanced to the position of senior vice president and oversaw 15 operations. But he still yearned for his own place, so he developed the concept that became Timberline Steakhouse & Grill in Kansas (which he sold in 2011). He recognized that the fast-casual segment was gaining momentum, so he created Freddy's Frozen Custard, which offers hot dogs, hamburgers and custard. Freddy's Frozen Custard is now a franchise operation with more than 500 stores in 36 states.

Most regulatory agencies will work with new operators to let them know what they must do to meet the necessary legal requirements. Your state's general information office can direct you to all the agencies you'll need to be concerned with.

Starting and opening a restaurant can be an exciting, rewarding, and sometimes overwhelming experience. When done correctly, the benefits will far outweigh any anxieties that may come along with it. With proper planning and research, you will have the necessary tools to make your dream of owning a successful eatery a reality.

• Start Your Own Restaurant and More by Rich Mintzer and the Staff of Entrepreneur Media : Entrepreneur's official guide describes the ins and outs of starting and running a successful restaurant, pizzeria, coffeehouse, deli, bakery or catering service. Packed with tips on how to keep your restaurant growing and healthy, the book answers most commonly asked questions and covers the essential business basics.
• National Restaurant Association (NRA) : Founded in 1919, the NRA is the leading business association for the restaurant industry. Its site offers access to an information service and library, various publications and industry research. It also provides networking opportunities and training, and emphasizes the ways in which local restaurants can contribute to their communities.
• National Restaurant Association (NRA) Educational Foundation : This nonprofit organization is dedicated to fulfilling the NRA's educational mission. The site offers classes for professionals and listings of U.S. food safety laws and training requirements. Where available, county and municipal requirements are also listed.
• SCORE : To get some practical, real-world advice, contact SCORE and ask to speak with small business counselors who owned or managed a restaurant. Find offices or counselors in your area by visiting the website.
• Women's Foodservice Forum (WFF) : The WFF is dedicated to providing women in the food-service industry with the resources to succeed. It offers leadership development programs, market research and a regional partnership program for networking. The site also provides answers to FAQs, advice and a community of peers.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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How to Write a Business Plan: Your Step-by-Step Guide

So, you’ve got an idea and you want to start a business —great! Before you do anything else, like seek funding or build out a team, you'll need to know how to write a business plan. This plan will serve as the foundation of your company while also giving investors and future employees a clear idea of your purpose.

Below, Lauren Cobello, Founder and CEO of Leverage with Media PR , gives her best advice on how to make a business plan for your company.

Build your dream business with the help of a high-paying job—browse open jobs on The Muse »

What is a business plan, and when do you need one?

According to Cobello, a business plan is a document that contains the mission of the business and a brief overview of it, as well as the objectives, strategies, and financial plans of the founder. A business plan comes into play very early on in the process of starting a company—more or less before you do anything else.

“You should start a company with a business plan in mind—especially if you plan to get funding for the company,” Cobello says. “You’re going to need it.”

Whether that funding comes from a loan, an investor, or crowdsourcing, a business plan is imperative to secure the capital, says the U.S. Small Business Administration . Anyone who’s considering giving you money is going to want to review your business plan before doing so. That means before you head into any meeting, make sure you have physical copies of your business plan to share.

Different types of business plans

The four main types of business plans are:

Startup Business Plans

Internal business plans, strategic business plans, one-page business plans.

Let's break down each one:

If you're wondering how to write a business plan for a startup, Cobello has advice for you. Startup business plans are the most common type, she says, and they are a critical tool for new business ventures that want funding. A startup is defined as a company that’s in its first stages of operations, founded by an entrepreneur who has a product or service idea.

Most startups begin with very little money, so they need a strong business plan to convince family, friends, banks, and/or venture capitalists to invest in the new company.

Internal business plans “are for internal use only,” says Cobello. This kind of document is not public-facing, only company-facing, and it contains an outline of the company’s business strategy, financial goals and budgets, and performance data.

Internal business plans aren’t used to secure funding, but rather to set goals and get everyone working there tracking towards them.

As the name implies, strategic business plans are geared more towards strategy and they include an assessment of the current business landscape, notes Jérôme Côté, a Business Advisor at BDC Advisory Services .

Unlike a traditional business plan, Cobello adds, strategic plans include a SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) and an in-depth action plan for the next six to 12 months. Strategic plans are action-based and take into account the state of the company and the industry in which it exists.

Although a typical business plan falls between 15 to 30 pages, some companies opt for the much shorter One-Page Business Plan. A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you’ll make money).

A one-page plan is hyper-direct and easy to read, making it an effective tool for businesses of all sizes, at any stage.

How to create a business plan in 7 steps

Every business plan is different, and the steps you take to complete yours will depend on what type and format you choose. That said, if you need a place to start and appreciate a roadmap, here’s what Cobello recommends:

1. Conduct your research

Before writing your business plan, you’ll want to do a thorough investigation of what’s out there. Who will be the competitors for your product or service? Who is included in the target market? What industry trends are you capitalizing on, or rebuking? You want to figure out where you sit in the market and what your company’s value propositions are. What makes you different—and better?

2. Define your purpose for the business plan

The purpose of your business plan will determine which kind of plan you choose to create. Are you trying to drum up funding, or get the company employees focused on specific goals? (For the former, you’d want a startup business plan, while an internal plan would satisfy the latter.) Also, consider your audience. An investment firm that sees hundreds of potential business plans a day may prefer to see a one-pager upfront and, if they’re interested, a longer plan later.

3. Write your company description

Every business plan needs a company description—aka a summary of the company’s purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most.

4. Explain and show how the company will make money

A business plan should be centered around the company’s goals, and it should clearly explain how the company will generate revenue. To do this, Cobello recommends using actual numbers and details, as opposed to just projections.

For instance, if the company is already making money, show how much and at what cost (e.g. what was the net profit). If it hasn’t generated revenue yet, outline the plan for how it will—including what the product/service will cost to produce and how much it will cost the consumer.

5. Outline your marketing strategy

How will you promote the business? Through what channels will you be promoting it? How are you going to reach and appeal to your target market? The more specific and thorough you can be with your plans here, the better, Cobello says.

6. Explain how you’ll spend your funding

What will you do with the money you raise? What are the first steps you plan to take? As a founder, you want to instill confidence in your investors and show them that the instant you receive their money, you’ll be taking smart actions that grow the company.

7. Include supporting documents

Creating a business plan is in some ways akin to building a legal case, but for your business. “You want to tell a story, and to be as thorough as possible, while keeping your plan succinct, clear, interesting, and visually appealing,” Cobello says. “Supporting documents could include financial projects, a competitive analysis of the market you’re entering into, and even any licenses, patents, or permits you’ve secured.”

A business plan is an individualized document—it’s ultimately up to you what information to include and what story you tell. But above all, Cobello says, your business plan should have a clear focus and goal in mind, because everything else will build off this cornerstone.

“Many people don’t realize how important business plans are for the health of their company,” she says. “Set aside time to make this a priority for your business, and make sure to keep it updated as you grow.”

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Will Biden Withdraw?

Democratic worries about the president’s age have surged after thursday’s debate..

This transcript was created using speech recognition software. While it has been reviewed by human transcribers, it may contain errors. Please review the episode audio before quoting from this transcript and email [email protected] with any questions.

From “The New York Times,” I’m Natalie Kitroeff. This is “The Daily.”

[MUSIC PLAYING]

President Joe Biden’s disastrous debate performance last week set off a furious discussion among Democratic officials, donors, and strategists about whether and how to replace him as their party’s nominee. Today, chief White House correspondent Peter Baker takes us inside those discussions and Biden’s effort to shut that conversation down.

It’s Monday, July 1.

Peter, you’ve been reporting on what I think can be best described as the great Democratic freakout that started basically from the moment the debate began at 9:00 PM on Thursday night. Tell us about the aftermath.

Yeah, I’ve been covering politics for 38 years, and I’ve never seen a political panic like we saw after that debate. It was like a run on the bank. Everybody in the Democratic Party was suddenly confronted with what they didn’t want to admit up until then, which is that they have an 81-year-old candidate who would be 86 at the end of his second term. And it’s very possible that he was not capable of completing this campaign in a vigorous and competitive way against Donald Trump. That’s what really it comes down to for many Democrats. Can Joe Biden take the campaign to Donald Trump and stop what they think is an existential threat to the country?

I want to know more about who you were hearing from. Who are the people that are calling you? What are the big questions they’re asking? What are they struggling with?

Yeah, I don’t want to get into too many names. A lot of people don’t want to be out front. But you did see even publicly, people like Senator Claire McCaskill.

Joe Biden had one thing he had to do tonight and he didn’t do it.

The former Senator from Missouri, red state Democrat, was on MSNBC just minutes after the debate.

He had one thing he had to accomplish, and that was reassure America that he was up to the job at his age. And he failed at that tonight.

She talked about this was a crisis, that her phone was blowing up with a lot of Democrats. And she was very forthright about it. It was very striking that she said that.

I think there’s a lot of people who are going to want to see him consider taking a different course now,

People like van Jones, who was on CNN, he used to work in the Obama White House.

We’re still far from our convention. And there is time for this party to figure out a different way forward, if you will allow us to do that.

He very candidly talked about how this was going to raise questions about whether the President should continue as the candidate.

Some Democrats are calling for Biden to step down. Andrew Yang —

Andrew Yang, who ran against Biden in 2020 for the Democratic nomination, popular with some younger voters, he said on social media it was time for Biden to step aside. Those are some of the public people. And obviously, in the hours and days that followed, more came out and said, well, this is something we need to think about.

But the people I was talking to were people behind the scenes, people who have run White Houses before, people who work for President Biden in this administration. I heard words like, “He can’t win.” “This is a disaster.”

“This is a nightmare.” And they were very, very concerned that he could not beat Donald Trump.

Right. And you saw these really prominent media figures, outlets, “The Times” as an actor in this situation calling for Biden to step aside. Our editorial board did this. We should say this is entirely separate from our newsroom from the show, but there was this real crescendo. And there was a sense that this was a turning point, right?

Absolutely. But it’s not just the media. I think what the Biden campaign would like it to be is about the media. It’s just that the media tends to be more out front and say things more openly than Democrats were saying. It really was rank and file Democrats. It really was high ranking Democrats, and they were absolutely flipped out.

Right. These doubts are coming from all over, from many corners. Take me through, Peter, the argument for why this poor performance meant that Biden should be replaced. How do they explain that thinking?

Well, look, a lot of people who defended President Biden will say is that incumbent presidents don’t do well in their first debate, and that is true. Historically, that’s been true. Ronald Reagan, George W. Bush, Barack Obama, Donald Trump all lost, arguably, their first debate when they were running for re-election.

But the difference is, if Obama doesn’t register a good performance against Mitt Romney, first of all, nobody thought that Obama wasn’t capable of being president as a result. And second of all, he had another debate about a week or two later in order to try to recover. Neither of those factors works here.

Biden’s problem from this debate is much more existential. It’s much more profound because it’s about whether he is able to perform the office of president, not just for the next few months, but for the next 4 and 1/2 years. And there’s not going to be another debate until September. So he doesn’t have another big audience opportunity to change people’s minds, to show that, in fact, he does still have it and can run the country. And that’s a real problem for him.

And there’s this broader context here, right. Voters have been telling pollsters for a year now that Biden’s age is a major concern for them. We’ve seen Biden’s age before our very eyes. We’ve seen him stumble in speeches, in public appearances. And, Peter, we had talked to you about this very issue a few months ago after a special counsel investigating Biden’s son, Hunter, issued this report focusing on Biden’s mental state, in part, saying that the president was, quote, a “well-meaning elderly man with a poor memory” and had, quote, “diminished faculties in advancing age.”

But at the time, the White House dismissed that report as a partisan hit job. So in a sense, this debate performance was the capstone of something that’s been in the air for a very long time. It’s just that this time, it was undeniable. There was no spinning it.

Well, I think that’s exactly right. There was no spinning it. One Democrat put it to me. He said, for a long time, the fear of Trump stifled Democratic criticism of Biden. People didn’t want to criticize him because they desperately want to beat Trump.

But now, that same fear, he said to me, now meant that they could no longer stand behind Biden, that they worried that he had been diminishing over a period of time and that his staff and the people around him had hidden that from the public. There’s a real anger out there among some Democrats. Now, what the Biden circle would tell you is, no, we didn’t hide anything from you.

Yes, he does have moments where he is not as lucid as you would want him to be, but that, broadly speaking, when they see him operate, when they’re sitting with him in the Oval Office or in the situation room, he is sharp. He asks good questions. He understands and grasps the issues that he is confronting.

And I mean, we all have good days and bad days. But when you’re 81, your good days and bad days may be more pronounced.

And if he has good days and bad days, well, Thursday night was a very bad night.

Peter, I want to ask you about that, about your view on all of this, because I do think all this has raised this fundamental question for a lot of Democrats, for a lot of journalists, for voters, which is what you’re getting at. Was what we saw on the debate stage the real Biden? And had the White House been hiding him from us? Or were the people around him just unable to recognize the perils of this themselves? Like, have they been gaslighting us all, or are they in denial?

Yeah, it’s a good question. That’s the question in some ways, right. I think that people who work closely with the president and like him, admire him, respect him want to see the best in him and want everybody else to see the best in him. And they have been unwilling to admit whether or not he has slipped in the last 3 and 1/2 years.

And part of it may be strategic. They recognize in their view that he is the president. They’ve got to build him u and make him as successful as possible. And they have shielded him as much as possible from public scrutiny.

He hasn’t give as many interviews or as many press conferences as any of his predecessors going back to Reagan. He’s never getting interview to “The New York Times,” or “The Washington Post,” or “The Wall Street Journal,” or the “LA Times,” or any other newspaper, which is, I think, the first president, certainly in my lifetime, who hasn’t done that. And that’s been part of a pattern of them trying to protect him. And I think there’s kind of a reckoning right now among other Democrats, wondering whether they went too far.

OK. So we have this huge reaction to this moment, the debate from the Democrats in the news media. Can you walk us through how the Biden team responds to the full-blown panic?

His campaign was thrown into full-blown damage control over the weekend. And the President himself set out to do two things. First, privately, he met with donors and assured them, yes, he’s still a viable candidate and that they should still support him.

And then publicly, he went on a campaign blitz, traveling to seven events in four states. And his first stop on Friday, in fact, was at a rally in Raleigh, North Carolina.

[CROWD CHEERING]

Hello, hello, hello.

This was already scheduled before the debate, but it gave him an opportunity to both show that he can do the job —

Thank you, North Carolina.

— to demonstrate vigor and vitality —

I don’t know what you did last night, but I spent 90 days and 90 minutes on the stage debating the guy who has the morals of an alley cat.

— and to address his own performance.

I know I’m not a young man. State the obvious. Well, I know.

And he says pretty candidly, he says, yeah, I’m not a young man.

I don’t walk as easy as I used to. I don’t speak as smoothly as I used to. I don’t debate as well as I used to.

But he goes on.

Well, I know what I do know. I know how to tell the truth.

And I know how to tell right from wrong.

And I know how to do this job. I know how to get things done. And I know, like millions of Americans know, when you get knocked down, you get back up.

And, you know, he comes across as pretty vigorous, pretty energetic. Of course, he’s reading from a teleprompter. Always a lot easier to read from a teleprompter. But I think more important than that was the body language and the spirit that he brought to the moment.

It sounds like teleprompter, not the Biden who appears at the rally is meaningfully different, at least in style from the President that we saw on the debate stage. I’m wondering if you think this has changed anything. Has the conversation changed?

No, not fundamentally. I think fundamentally that people still recognize that there’s an issue here. Now, there was pushback among Democrats saying, OK, take a breath. Get a hold of yourself. He’s not dropping out.

I don’t think you judge a person’s — the body of their work on one night. They don’t always go the way you want to. I have confidence in the President because he’s delivered.

And I understand that he had a raspy voice. But like I’ve told folks, who cares? We have a choice this November between someone that’s a good person, a good president with a real record of results, and someone that has brought shame on the presidency.

Don’t let 90 minutes define a career of a president who’s been in office for 3 and 1/2 years, been in politics for 50 years, and overshadow the important issues that he stands for. And so you heard that line of thinking in the spin room and on TV.

Look, I think Joe Biden had a bad debate night, but it doesn’t change the fact that Donald Trump was a bad president.

And by the way, Trump did terribly, too, which is a fair point. Trump may have been more lucid in the sense that he sounded stronger. But if you actually looked at what he said, listen to what he said, he said so many things that were just not true. And it helped Biden that former President Barack Obama put out a statement saying, hey, guys, I’ve seen bad debates. It’s fine. Don’t freak out, in effect, is what he said.

And Jim Clyburn —

And if he asked my opinion, I would give it, as I always do —

— who is his very close ally in Congress from South Carolina, the Congressman who helped get him the nomination in the first place, said, stay the course.

He should stay in this race. He should demonstrate going forward his capacity to lead the country.

So it was important to have those voices out there among prominent Democrats trying to calm the waters. But it only went so far because the waters are still churning underneath.

Peter, I’m curious how his donors are reacting to all this. I mean, you mentioned that part of his full court press is to reassure them that he’s got the mental acuity to run. How successful has he been at that?

Yeah, I think that there are certainly some donors who are resigned. They feel like there’s not much choice. But there are others who actually are considering jumping off the boat. Jumping on what Mika Brzezinski on “Morning Joe” called the hysteria train. And I think that it’s an open question.

But part of the thing is, of course, they’re waiting to see how the polls really shake out. The initial polls after any debate are often not really representative of how an event settles into the political narrative. And the polling and data so far have been kind of contradictory. On the one hand, it shows that Trump clearly beat Biden. Biden clearly lost, and that Biden has only reinforced the doubts that most voters have about his age and mental capacity. That’s absolutely true.

At the same time, there’s some polling showing that the overall horse race number, who are you going to vote for, hasn’t moved dramatically yet, if it does at all, and that it’s possible this is baked in that people who were going to vote against him are still going to vote against him. The people who would vote for him, holding their nose, may not be happy about it, may still be voting for him.

But there’s a tell. The tell was from the Biden campaign. When they put out a memo by Jen O’Malley Dillon, who was his top political person at the campaign, and she says if you see polls go down in the next few days or weeks, what’s telling is that she is, in fact, anticipating that polls would be bad for them and trying to set expectations for supporters and voters and donors saying, don’t let that panic you any further. That’s normal, and we’ll get past that just as we have other bumps in the road.

It seems like the Biden effort over the weekend has, in some sense, quieted some public doubts from key Democrats, right? There’s not a — we didn’t see a deluge of senior lawmakers going on Sunday talk shows and saying, Mr. President, step aside. But from what you’re saying and based on the reporting that we’ve seen from our colleagues, the effort has not, by any means, ended the discussion about replacing Biden. That is very much still happening under the surface.

Yeah. That discussion is very much alive among Democrats. Will Biden and should Biden remain as the candidate? And the question then becomes is if he doesn’t, what then?

We’ll be right back.

Peter, given that this discussion of Biden stepping aside is still, as you said, very much alive, what would it look like for someone to replace him on the presidential ticket at this point in the campaign just a few months before election day? It sounds like it would be pretty daunting.

Yeah. I mean, look, we have never had a situation like this, not certainly in modern times. No president has ever dropped out of the race so late in the cycle. And you have to remember a couple of things.

First of all, the Democratic National Convention, which would anoint a new nominee, is in late August. But they’re actually scheduled to take a roll call vote before the convention begins on August 7. So that means we have five weeks between now and when the roll call is scheduled to be held to decide a nominee.

If the president were to drop out, that would create this truncated, incredibly intense, incredibly wide open, incredibly volatile, short campaign to figure out who would be the nominee. And it’s complicated logistically. It’s complicated politically, it’s complicated in all sorts of ways. And we don’t really know what’s going to happen or how it would happen because we’ve never seen it before.

But it is conceivable. It is possible. The President has to decide that he’s not going to run. If that doesn’t happen, then there’s no contest. There’s no way anybody sees a forcing him off the ballot if he chooses to continue to run. That doesn’t seem to be any appetite for trying to find a way to undo his nomination other than with his consent.

He controls the 3,900 delegates that are going to be at the convention. They’re obligated to vote for him on the first ballot. So it has to be first, his decision on whether he continues to run. If he does, then that’s it. That’s the end of that question. But if he doesn’t, then it’s jump ball.

Would his replacement automatically be Kamala Harris as the vice president?

No, not at all. If it were after the convention and they were both nominated, and then he stepped aside at the last minute, then they probably would simply go to Kamala Harris because she had been ratified by the convention as the vice presidential candidate. That’s possible. But if we’re talking about a situation before the convention, it’s anybody’s guess. There’s about a dozen other prominent Democrats out there who are looking at jumping in if suddenly, the nomination is up for grabs.

But so who are we talking about? What are some of the most prominent names that have come up?

Well, other than Kamala Harris, you have a number of governors, particularly Gavin Newsom of California, Gretchen Whitmer of Michigan, J.B. Pritzker of Illinois. There are, of course, those who ran last time who might jump back in, in theory. Senator Cory Booker, Senator Amy Klobuchar, potentially even maybe Pete Buttigieg, who is currently the transportation Secretary.

But the ones who are going to have the best chance are those who have an apparatus already, who have a set of donors and fundraisers who can raise money instantly, and who have the ability to get on TV and get media attention without having to work as hard for it. And that does suggest, obviously, a sitting vice president or a sitting governor.

Basically hitting reset on the whole nomination process requires embracing a moment of genuine political chaos. I mean, that’s the theoretical downside of this. But of course, I mean, there’s also a potential upside, right? Massive media attention potentially for whoever the replacement Democrat is, the possibility that that replacement could energize a lot of Democratic voters and independents, and even potentially moderate Republicans out there who dislike Trump but just couldn’t get excited about Biden.

Yeah, absolutely. Whoever emerges will have a certain advantage of freshness, right. And that person will have a generational argument to make against Trump because whoever it would be would be younger than Trump. And suddenly, Trump is then the old candidate. He’s 78.

And that new Democratic candidate would be able to say, I’m the next generation. This guy is also too old to be president. And if you’re concerned about our guy was, can he make it through four years, then you should be picking me because the other guy can’t make it either through four years.

Now, the downside, of course, is these are people who are largely untested on a national stage, at least in this kind of an environment. And you don’t know how people will do once they actually jump in. They didn’t have the advantage of a year-long primary contest to prove themselves.

Before you jump into a race, you can look really attractive. Look at Ron DeSantis. Before he jumped in to the Republican primaries, on the Republican side, they all thought, wow, he’s really great. Didn’t turn out to be so great once he got on the campaign trail. The magic didn’t actually appear. So that’s the danger here, is we don’t know which of these Democrats, if any, would have the ability to shine when the big giant klieg lights are on them.

And we’re clearly in a delicate moment right now. But are any of these potential contenders trying to signal interest at this point? I mean, what does that look like? It sort of seems like the art of raising your hand for something but not wanting it to publicly.

Yeah, it’s a really good question because you obviously can’t do anything that seems disloyal to Biden, right. Nobody’s willing to take on Biden directly and say, I’m now running, and you should take him down. So the trick here is you have to be loyal, loyal, loyal right up to the minute that Biden says he’s not running, at which point then suddenly you’re off to the races.

And doing that from a standing start is not a good idea for any campaign. So they have to find ways of talking to their people, lining up donors, thinking about what kind of a campaign would look like, who might be their strategist, without letting anybody know that they’re doing that, or at least not let anybody in our business know that because it would obviously backlash on them. And that’s a very hard thing to do. I mean, I heard that there are people out there making phone calls who want to run, but nobody’s going to admit that outright because it would be damaging to them.

And in terms of logistics here — I know this is all very hypothetical — but if a new candidate were to become the nominee, do they get all the money Biden raised? Do they get his campaign team, or are they literally creating a presidential campaign from scratch with four months to go?

I mean, presumably, they would adopt a lot of Biden’s apparatus. As for the money, a lot of the money these days is in kind of superpacs and these sort of amorphous structures that can go immediately to a different candidate. And everybody who contributed to Biden can now contribute to the new candidate. And then Biden can still spend his money as he chooses in support of whoever the candidate is.

So there’s that advantage in a way it could actually increase some fundraising. But you’re right, they would be starting from scratch in a lot of ways, at least in terms of a national organization.

And obviously, for this to even happen, it relies on Biden stepping aside here, as you said. Everything you’ve laid out so far suggests that he is, for now at least, closed off to this suggestion. And I have to ask what you think from your reporting would change that.

Well, President Biden is a proud man. He’s a stubborn man. As a lot of people of any age are, he is reluctant to confront and face his own weaknesses, and he’s not going to be talked out of running by a bunch of media chattering class, pundits, and junior Democrats. I mean, think about it. He’s been running for president since 1987. And the idea that he is now in office and running the country and as he thinks it, running it pretty well, that he’s going to simply step aside because a bunch of people tell him he should, he reacts viscerally to that. Of course, he doesn’t want to do that.

In fact, when you talk to Democrats, they’re very conscious of not trying to push him because it could have the opposite reaction. It could trigger him to want to stay even more. The people who have influence with him, not that many people.

I mean, at this point, he’s been in politics since 1972 when he was elected to the Senate. And the people he considers his peers, most of them are gone. He’s not surrounded by people whose opinion he truly respects.

Obama and Clinton, the only two former presidents out there other than Jimmy Carter, who are Democrats, I don’t know that if they told him it was time to pull the plug, that he would listen to that. In fact, he might, again, do the opposite. He still resents Obama for discouraging from running in 2016.

Obviously, congressional leaders like Chuck Schumer, Nancy Pelosi, Hakeem Jeffries, Jim Clyburn, people like that, could have an influence if they were to go as a group to him in a way like the Republicans went to Nixon in 1974 and said that he wasn’t going to survive. Maybe that might influence him. But I don’t think they’re likely to do it. It doesn’t look like they’re likely to do that.

Who does have his ear? I mean, who does he really listen to? Who do we know he’s going to be listening to in this moment?

Well, the real people he listens to the most are his family. He’s a very family-oriented guy. Remember, he went home to Wilmington almost every night when he was a Senator. Even now as president, he flies home to Wilmington most every weekend.

And he’s at Camp David this weekend with his family. They’re there because they had already planned to be together for a photo shoot, ironically, with Annie Leibovitz. So the family was already gathering at Camp David —

— gives him an opportunity. Right. And it gives him an opportunity to have a heart-to-heart conversation with the people who mean the most to him, in particular, Jill Biden, of course, the first lady and his sister, Valerie, the kids, and the grandkids. We don’t know what that conversation looks like.

I mean, that’s as private as it comes. Someday they’ll be histories written and memoirs written. And I’m fascinated to read what’s happening this weekend at Camp David, because I think it’s kind of pivotal. But what we do know is that up until now, at least, Jill has been all in.

She’s been encouraging him to run. And it sounds like she’s been encouraging him to stay in. And a lot of people think her voice is the most important voice in this.

And just to pause on this for a second, Peter, it sounds like you’re saying something pretty remarkable, actually, which is that this very small handful of people have influence over what is going to be a massive decision that affects hundreds of millions of Americans and really the entire world.

Well, don’t underplay it. But yeah, that’s exactly right. And you’re right to point out the stakes here, because it’s not just about Joe Biden and his future. It is about this presidential race. And it is about whether you want Donald Trump back in office. That’s the way most Democrats look at it. And the difference between a Biden presidency and a Trump presidency is about as stark as you can imagine. And this will have consequences that will ripple out for years to come.

Peter, I kind of want to end where we began this conversation, which is with this question of Democrats’ mindset right now, post-debate, and the question of what’s motivating them in this moment. Privately, they’re talking about replacing Biden. They seem too scared to do that publicly for all the reasons we’ve discussed, including that the White House is basically telling them to stop talking about it and that Biden probably won’t step aside anyway. So all of this may just be useless hand-wringing.

And all of that raises a pretty essential question for me, which is, are Democrats about to recommit to a damaged nominee who had a disastrous debate, who may only get worse over time out of loyalty to President Biden? Or do you think on some level they really believe this is all just overblown, that it’s one debate, everybody has bad days, and Biden really can recover from all this?

I think there’s a lot of doubt in the party that he can really recover from. This is the argument obviously the Biden campaign is making. And it’s really the only argument they have available to them to say, look, don’t overreact here. It’s just the media hyperventilating. We will recover like we’ve recovered before.

And it is what they have to say because they don’t have anything else that they can say. But almost every Democrat outside of the inner circle that I talk to says this was a complete disaster. They are not sugarcoating it. They saw what they saw with their own eyes, and they think that it’s not tenable for the campaign to pretend otherwise.

And it’s particularly devastating because the weakness of the Biden campaign has always been concerns about his age. People have expressed that to pollsters and in interviews with reporters going back more than a year. And now they just saw it for themselves on TV, in their living rooms, more than 50 million of them. And to convince them not to believe what they saw with their own eyes is just a monumental task politically.

So for Biden’s team and for the Democrats, it’s a big roll of the dice. Do you stick with him and try to correct the damage in the four months you have? Or do you say, it’s time for somebody else, which is going to be a roll of the dice itself?

And assuming Biden continues, Peter, it sounds like we won’t know if that bet, that bet that he’s the only one that ever beat him. He’s the only guy that can get this done, if that was solid or diluted thinking until November 5.

On November 5, or whatever day of the election is resolved, we will know how history judges this. And maybe everybody looks back on this and says, well, that was close, but they were right to stick it out because they won. Or in fact, it was a disastrous decision, and they wasted an opportunity to fix campaign that was already having trouble. Hindsight will be perfect, but there’s no question that this weekend will be remembered as perhaps the most decisive of this campaign.

Peter, thanks for coming on.

Thanks for having me.

After we spoke with Peter, “The New York Times” reported that while at Camp David, Biden’s family urged the president to stay in the race, arguing that, yes, he could still show voters he’s capable of serving another four years.

Here’s what else you need to know today. Early projections show that France’s far-right national rally party won a decisive victory in the first round of voting for the country’s national assembly on Sunday. National rally, an anti-immigrant party long on the fringes of the French political scene, captured about a third of the vote, according to polls, and now appears poised to become the largest force in the lower house of parliament.

The results dealt a blow to French president Emmanuel Macron, who took a gamble by dissolving parliament last month and calling for snap elections. But his bet that the far right wouldn’t repeat its recent success in European parliament elections backfired. A run-off election between the leading parties will be held on July 7.

Today’s episode was produced by Asthaa Chaturvedi, Rachelle Bonja, Will Reid, and Rob Szypko, with help from Olivia Natt and Lynsea Garrison. It was edited by Lexie Diao, with help from Ben Calhoun, Paige Cowett, and Mike Benoist. And special thanks to Michael Barbaro.

Contains original music by Dan Powell, Marion Lozano, and was engineered by Chris Wood. Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly.

That’s it for “The Daily.” I’m Natalie Kitroeff. See you tomorrow.

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Hosted by Natalie Kitroeff

Featuring Peter Baker

Produced by Rachelle Bonja ,  Will Reid and Rob Szypko

With Olivia Natt and Lynsea Garrison

Edited by Lexie Diao ,  Ben Calhoun ,  Paige Cowett and Mike Benoist

Original music by Dan Powell and Marion Lozano

Engineered by Chris Wood

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President Biden’s disastrous debate performance last week set off a furious discussion among Democratic officials, donors and strategists about whether and how to replace him as the party’s nominee.

Peter Baker, who is the chief White House correspondent for The Times, takes us inside those discussions and Biden’s effort to shut them down.

On today’s episode

Peter Baker , the chief White House correspondent for The New York Times.

Background reading

President Biden’s allies can no longer wave away concerns about his capacity after his unsteady performance at Thursday’s debate.

Mr. Biden’s family is urging him to keep fighting .

There are a lot of ways to listen to The Daily. Here’s how.

We aim to make transcripts available the next workday after an episode’s publication. You can find them at the top of the page.

Special thanks to Michael Barbaro .

The Daily is made by Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, Luke Vander Ploeg, M.J. Davis Lin, Dan Powell, Sydney Harper, Mike Benoist, Liz O. Baylen, Asthaa Chaturvedi, Rachelle Bonja, Diana Nguyen, Marion Lozano, Corey Schreppel, Rob Szypko, Elisheba Ittoop, Mooj Zadie, Patricia Willens, Rowan Niemisto, Jody Becker, Rikki Novetsky, John Ketchum, Nina Feldman, Will Reid, Carlos Prieto, Ben Calhoun, Susan Lee, Lexie Diao, Mary Wilson, Alex Stern, Sophia Lanman, Shannon Lin, Diane Wong, Devon Taylor, Alyssa Moxley, Summer Thomad, Olivia Natt, Daniel Ramirez and Brendan Klinkenberg.

Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly. Special thanks to Sam Dolnick, Paula Szuchman, Lisa Tobin, Larissa Anderson, Julia Simon, Sofia Milan, Mahima Chablani, Elizabeth Davis-Moorer, Jeffrey Miranda, Maddy Masiello, Isabella Anderson, Nina Lassam and Nick Pitman.

Natalie Kitroeff is the Mexico City bureau chief for The Times, leading coverage of Mexico, Central America and the Caribbean. More about Natalie Kitroeff

Peter Baker is the chief White House correspondent for The Times. He has covered the last five presidents and sometimes writes analytical pieces that place presidents and their administrations in a larger context and historical framework. More about Peter Baker

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