How to Open a Wine Bar
Many entrepreneurs want to open a wine bar, but they aren't sure where to start. Running any small business in the United States requires hard work, start-up capital, and a certain skillset. Opening a wine bar is no exception.
There are startup costs and operating costs to consider, along with real estate and marketing fees. Specialty bar costs depend on the type of wine there is and where the establishment is located. A successful bar should be in the right location, and the owner needs to acquire a liquor license. While this may all seem overwhelming, it's entirely possible to manage all of these requirements.
Wine bars are one of the many types of specialty bars out there. Entrepreneurs who enjoy the many different wines on the market and know how to craft a detailed business plan should consider becoming wine bar owners. Read ahead for everything there is to know on how to open a wine bar.
1. Consider the Costs to Open Wine Bar
The primary costs to open a wine bar include startup costs, furnishing expenses, and operating expenses. Details of these include -
- Startup Costs - Business owners must lease or purchase location and deposit the first month's rent. This includes utilities. The owner must also acquire licenses and permits, which vary depending on state law.
- Furnishing the Bar - The owner can either purchase the bar from another owner for $10-20,000. Or, he/she can set up an establishment from scratch, which costs several thousands of dollars. This type of bar concept requires less food inventory, which helps decrease bar inventory costs considerably.
- Operating Expenses - The bar owner should set aside enough assets to maintain operations before opening. This should be included within the startup budget. Operating expenses include salaries, taxes, utilities, and inventory.
- Total Expenses - While it's impossible to say exactly how much a wine bar costs, some sources claim it costs less than $50,000 to start. Other experts claim anywhere from $140,000 to $325,000. It's better to plan for more expenses than less.
2. Identify the Structure Before Opening Wine Bar
Once the owner has a bar concept in mind, it's time to decide where to locate the establishment. Owners can either purchase an existing bar for less money or create a brand-new business from scratch. If they take the latter approach, they should budget all expenses with estimates on the higher side. They also must consider the cost of an architect, interior designer, contractor, and more.
3. Create a Business Plan
A good business plan will outline the bar concept, assess profitability, and pinpoint the location's benefits. It should also include an extensive overview of who will work there and how much they will earn in wages. Any potential risks should be discussed in this section, as well as a plan to mitigate them. Owners can present the business plan to investors and other involved stakeholders who require details on the new wine bar.
4. Identify Different Types of Customers to Open Wine Bar
What type of customers will visit the bar business? Owners should make sure to research the location's demographics and any trends to get an idea. Speaking with vendors is a great way to see what type of bar wine is most popular among patrons.
The local chapter of the Chamber of Commerce typically has information on the general demographics of the city as well. Finally, the bar owner should research alcohol trends and lifestyle trends to see which drinks are popular and whether any consumer health needs may impact sales.
5. Assess the Competition and Build a Business Plan Strategy
Some bar owners hire a marketing company to research the competition. Owners should also take a look at the competition's social media page to see what type of content they post and what customers they have. At the end of the research, owners should know exactly who their target market is and what they want.
Next, it's time to generate a strategy to handle the competition. Pricing strategies include underpricing, differentiating, or concentrating on only one market. The type of strategy depends on the size location, and profit margin the owner desires. It's critical to keep all bar costs in mind throughout this process.
6. Finish Paperwork and Acquire Permission to Open Wine Bar
Owners should next secure permission to open the establishment. This process can be complex and timely, depending on the locality and local government. A visit to the building and safety department should occur before any construction or renovation.
The owner will need to choose a unique name and register the trademark and logo with assistance from an attorney. He/she must obtain an employee identification number from the Internal Revenue Service's website. This requires all of the necessary permits, licenses, and any other tax forms.
The owner should also visit the Alcoholic Beverage Control local chapter to acquire a license, which takes anywhere from 45-60 days to receive approval. A special occupational tax is also required to sell any alcohol. This is accomplished at the federal level.
7. Purchase a POS System
Every restaurant, neighborhood bar, sports bar, and wine bar needs a POS system. POS systems streamline and handle inventory management, customer transactions, and table reservations. Most of them integrate with other software solutions, such as accounting systems.
They also connect to any hardware to print receipts or summaries of employee data. Owners can also use data from POS systems to generate reports. This helps to pinpoint inefficiencies, understand customer needs, fine-tune marketing campaigns, and increase sales.
Key Takeaways of How to Open a Wine Bar
In conclusion, here is everything to know on how to open a wine bar -
- To open a wine bar, entrepreneurs need to consider the startup costs, furnishing expenses, operating costs, and total expenses. They should also identify how they want to structure the establishment with a business plan.
- The owner should research the target market to get to know potential customers. He/she should also assess the competition and come up with a strategy to manage them.
- The owner should acquire all of the correct permits, licenses, forms, and trademarks from the correct entities. This is a complex process that depends on the state and local government.
- Finally, the owner should purchase a quality POS system before opening. This will manage all customer transactions and generate reports that help optimize decision-making.