Opening a bar is a dream for many aspiring entrepreneurs, but the upfront costs can often seem daunting. However, the desire to start a bar with no money is not impossible.
This blog post will explore creative and strategic approaches to opening a bar with no money and making your dream of bar ownership a reality.
From grants for opening a bar to innovative financing options, we’ll guide you through the steps to kickstart your bar venture without breaking the bank. So, if you’re wondering how to start a bar with no money, read on for valuable insights and actionable tips.
What is a bar?
A bar is where customers can enjoy alcoholic beverages like beer, wine, spirits, and cocktails. It typically offers a social environment for people to relax and socialize and often provides food and entertainment options, such as live music or games.
Bars come in various styles and sizes, from neighborhood pubs and sports bars to more upscale lounges and cocktail establishments.
Below you can check a list of different types of bars:
- Neighborhood bar: A casual and friendly bar often frequented by locals.
- Sports bar: Known for televising sports events and providing a lively atmosphere for sports fans.
- Cocktail bar: Specializes in crafting creative and classic cocktails.
- Lounge: Offers a more upscale and relaxed atmosphere with comfortable seating.
- Pub: An abbreviation of “public house,” offering beer, traditional pub food, and a cozy ambiance.
- Dive bar: A no-frills, unpretentious bar with cheap drinks and a relaxed vibe.
- Brewpub: Combines a bar with an on-site brewery, serving house-brewed beers.
- Wine bar: Focuses on offering a selection of wines and often provides wine tastings.
- Irish pub: Modeled after traditional Irish pubs, with Irish music, decor, and beverages.
- Karaoke bar: Allows patrons to sing along to their favorite songs on a stage with a karaoke machine.
- Hotel bar: Located within hotels, offering drinks and sometimes light meals to guests and visitors.
- Rooftop bar: Located on the roof of a building, providing scenic views and drinks.
- Microbrewery: Focuses on brewing small batches of craft beer and often serves it on-site.
Within the accommodations and food service sector, the U.S. bar and nightclub industry holds the ninth position in terms of size.
According to Statista, the market size of the bar and nightclub sector in the United States experienced fluctuations between 2012 and 2022. In 2022, it saw an increase, reaching 35.3 billion U.S. dollars, surpassing the previous year’s figure of 22.91 billion U.S. dollars.
In the graph below, you can see the market size of the bar and nightclub sector in the United States over the period spanning from 2012 to 2022.
What is the cost of starting a bar?
According to Investopedia, the initial expenses pose the primary challenge for aspiring bar owners. These outlays encompass property acquisition, paperwork, and supplementary expenses like materials, payroll, and insurance.
The initial investment may fluctuate, typically from $100,000 to $850,000, but it’s possible to commence such a venture with significantly lower capital.
To learn more about the costs of starting your own bar, check out our article on How Much Does it Cost to Open a Bar in 2023.
How to open a bar with no money?
Below we described 8 ways to join the restaurant industry and open a bar with no money.
1. Apply for a loan
Applying for a small business loan is a common route for small business owners aspiring to turn their dream of owning a bar into reality.
The Small Business Administration (SBA) offers various loan programs tailored to support entrepreneurs in the hospitality industry. These loans can assist in covering essential startup costs, including real estate, licenses, and initial operating expenses.
Aspiring bar owners should explore SBA loan options to access favorable terms and competitive interest rates that can pave the way for their entrepreneurial journey.
Exploring peer-to-peer lending platforms connecting lenders with borrowers and considering traditional bank loans represent additional avenues for securing startup funding for your bar.
While these options may offer lower interest rates, they often involve a meticulous review process.
2. Consider joining a restaurant incubator program
A restaurant incubator is a specialized program or facility designed to nurture and support aspiring restaurant and food service entrepreneurs. These incubators provide a supportive environment for individuals or teams looking to start a new restaurant, bar, or food-related business.
Restaurant incubators offer a range of resources and services, including shared commercial kitchen spaces, mentorship and training programs, access to industry experts, marketing and branding assistance, help with permits and licenses, and networking opportunities.
Using a restaurant incubator offers several benefits to aspiring bar and restaurant owners:
- Access to expertise: Restaurant incubators often provide access to industry experts and mentors who can offer guidance and insights into running a successful bar or restaurant. This expertise can be invaluable, especially for newcomers to the business.
- Lower costs: Incubators typically offer shared kitchen spaces and equipment, reducing overhead costs for new businesses. This can help bar owners save money on initial expenses.
- Market testing: Incubators provide an environment where you can test your bar concept and menu with a lower risk. This allows you to gauge customer response and make adjustments before committing to a full-scale venture.
- Networking opportunities: Being part of a restaurant incubator exposes you to a network of fellow entrepreneurs, suppliers, and potential investors, fostering valuable connections within the industry.
- Access to resources: Incubators often offer resources like business development support, marketing assistance, and help with navigating permits and licenses, which can be especially beneficial for those new to the business.
- Business growth: Successful bar concepts developed within an incubator can attract investors and gain attention, potentially leading to opportunities for expansion or securing additional funding.
- Community engagement: Many restaurant incubators have a strong presence in their communities, allowing bar owners to connect with local residents and build a loyal customer base.
3. Start small
Starting a bar may not be straightforward, but you can experiment with it by running a pop-up bar. This serves as a valuable proof of concept that can pique the interest of potential investors.
Some pop-up bars and restaurants operate just for a few days a year. For example, Miracle is a Christmas cocktail pop-up bar. It offers seasonal cocktails within a cheerful and festive ambiance.
Another example is the Maccabee Bar, the yearly Hanukkah-themed pop-up bar in Boston. In 2023, this pop-up bar ran from November 29 through December 31.
Learn more about What Is a Pop-Up Restaurant & How To Start One.
4. Seek private investors
If you aspire to become the owner of a profitable bar business but find yourself short on startup money, seeking private investors can be a strategic move.
Private investors, including angel investors and venture capital firms, can be valuable allies in bringing your dream restaurant to life. They are often willing to invest in your specialty bar, offering financial support in exchange for a stake in your business at a pre-established valuation.
Furthermore, private investors aren’t limited to traditional financiers.
Friends or family members who share your vision for a thriving bar can also step in as backers, providing the necessary funding to kickstart your enterprise.
5. Think about crowdfunding
Crowdfunding can be an innovative solution to overcome financial hurdles when starting a bar with limited capital. Through crowdfunding platforms like Kickstarter or Indiegogo, a business owner can present a bar concept to a broad online audience and seek financial contributions from interested backers.
To raise money for your dream bar, crafting an enticing campaign highlighting your restaurant’s unique features and enticing potential backers with compelling rewards or incentives is crucial. A smart marketing plan and an engaging story can make a big difference in getting the local community excited about your dream business and helping you raise the funds you need.
- HOOTS Roller Bar & Beer Co. is an American Brewhouse and Lounge opened with the help of Kickstarter. A group of 259 supporters contributed $21,142 to make this project a reality; the goal was $20,000.
- Short Rest Tavern is another example of a successful crowdfunding initiative on Kickstarter. It’s a fantasy-themed tabletop gaming bar at Tucson Games and Gadgets. A group of 115 supporters committed $13,714 to support the realization of this project; the goal was $10,000.
- Broads is the female-forward cocktail bar to be opened in January 2024. As Bailey & Kristiana describe, they aim to establish an inclusive environment dedicated to celebrating women. They are committed to filling their bar with a wide range of brands founded or led by women. A group of 84 supporters committed $10,910 to support the realization of this project; the goal was $1,000.
6. Contact your local restaurant association
Getting in touch with your local restaurant association can be smart when you’re looking to open a bar with limited funds.
These associations often have valuable resources and connections that can help you navigate the industry, access potential grants or funding opportunities, and guide you on launching your bar without breaking the bank.
- The National Restaurant Association is a valuable resource for bar owners, providing industry insights, best practices, and support to help them thrive in the competitive bar business. With their extensive knowledge and expertise, bar owners can benefit from the association’s guidance on regulatory compliance, trends, and strategies for success.
- State Restaurant Associations are essential for bar owner looking to navigate the specific regulations and challenges within their state’s restaurant business. These associations provide localized support, valuable networking opportunities, and insights tailored to the unique needs of bar owners, helping them succeed in the restaurant industry.
7. Lease equipment
Instead of purchasing expensive bar equipment upfront, consider leasing it. Many equipment suppliers offer lease options that allow you to make manageable monthly payments.
This can significantly reduce your initial capital requirements and make getting your bar up and running easier.
8. Barter services
Consider bartering your skills or services with other businesses to obtain what you need for your bar. For example, if you’re a skilled graphic designer, you could offer your design services in exchange for furniture or equipment.
Bartering can help you acquire essential items without spending money upfront.
What is required to start a bar?
How to start a bar business with no money? Below are the steps to open a bar with no money.
Step 1. Make research
Before embarking on your journey to start a bar with limited funds, thorough research is your crucial first step.
Dive into the bar industry, study your target market, and identify niche trends to set your bar apart. Explore cost-effective strategies, innovative concepts, and potential investors to ensure your bar startup has a solid foundation for success.
Here you can check 25 Cool Bar Ideas, Themes & Concepts.
Step 2. Write a bar business plan
The second step is to write a solid business plan tailored to your small neighborhood bar or beer bar venture. This comprehensive business plan will serve as a roadmap for your journey to owning a restaurant, providing insights into your bar’s unique concept and target market.
Remember that it’s not just a roadmap for your business but also a vital document for attracting potential investors or lenders who can provide the necessary capital to launch your bar successfully.
Check out our guide on Bar Business Plan (How to Write & Template).
Step 3. Find capital
As we already mentioned, it’s essential to compile a comprehensive list of startup expenses. This inventory will help you assess the necessary funding for acquiring your bar business.
Listing all the operating costs and expenses for opening your bar should be a part of your business plan. All food service businesses should prepare this document before securing financing for their business.
Above, we described 8 ways of starting a bar with no money.
You can also check out our article on 18 Ways How to Open a Restaurant With No Money.
Step 4. Obtain licenses and permits
To open a bar, you typically need to obtain several licenses and permits, which can vary depending on your location and the specific services you offer. Some common licenses and permits you may need include:
- Liquor License: This license allows you to serve and sell alcoholic beverages in your bar. The type of liquor license required may vary by state and locality.
- Food Service License: If you serve food in your bar, you’ll likely need a food service license, which ensures you meet health and safety standards for food preparation and handling.
- Business License: A general business license is often required to operate any business. It legitimizes your business in your city or municipality.
- Entertainment License: If you plan to host live music, DJs, or other forms of entertainment, you may need an entertainment license to comply with local regulations.
- Health Department Permit: This permit ensures your bar meets health and sanitation standards for the safety of your customers.
- Building and Zoning Permits: Depending on the renovations or changes needed for your bar’s location, you may require building and zoning permits to ensure compliance with local construction and land use regulations.
- Signage Permit: If you plan to display signage for your bar, such as an outdoor sign, you may need a permit within local sign ordinances.
It’s essential to research and contact your local government authorities to determine the specific licenses and permits needed for your bar’s location and type of service. Compliance with these legal requirements is crucial to avoid fines and legal issues while operating your bar.
Step 5. Choose your bar location
Another important step in starting your own restaurant is to choose the best location for your business. You need to consider factors such as the place’s visibility and accessibility, cost of rent, etc.
Check our article on How to Open a Bar (16 Steps & Checklist) to find out the list of all factors worth consideration.
Step 6. Hire employees
Before opening your bar, consider hiring a team of dedicated employees, especially in the service industry where customer experience is crucial. Small businesses like bars can benefit greatly from staff who excel in providing excellent customer service.
Ensure your staff is highly trained, friendly, and skilled at fostering a welcoming atmosphere for your customers. This will significantly contribute to your bar’s success and enhance its reputation within the community.
Step 7. Use restaurant technology
As a bar owner, use restaurant technology solutions that help simplify your existing bar business operations and ensure its growth.
Create a website with information about the established bar location, opening hours, and menu. For that purpose, you can use an intuitive restaurant website builder that will help you build your bar website in a few simple steps with no need for coding skills.
Get inspired by these 20+ Best Bar Websites Designs.
Having created your bar website, think about implementing an online ordering system. It will allow customers to place orders directly from your website and increase your bar’s sales.
Here you can check how to set up an online ordering system.
Another example of using restaurant technology is using a QR code menu. With this technology, customers can conveniently browse your menu, place orders, and settle payments directly from their smartphones, reducing wait times and ensuring a seamless dining experience.
Use a QR code menu builder, generate QR codes, and place them on tables in your bar.
Step 8. Create a marketing plan
Develop a restaurant marketing plan before opening your own bar. Use various marketing channels, including social media, local advertising, and partnerships with nearby businesses, to build anticipation for your bar’s grand opening.
Use restaurant marketing tools like promotions, discounts and a loyalty program to attract customers to your bar.
- 21 Best Bar Promotion & Marketing Ideas | UpMenu
- 20 Best Restaurant Promotion Ideas (2023)
- Restaurant Social Media Marketing: Ultimate Guide
- 12 Best Restaurant Facebook Marketing Strategies & Ideas
- 20 Best Restaurant Instagram Marketing Strategies & Ideas
- 20 Best Restaurant Social Media Post Ideas (2023)
- 10 Top TikTok Restaurant Marketing Ideas
- 47+ Best Restaurant Marketing Strategies & Ideas (2023 Update)
Step 9. Prepare a launch plan
Developing a launch plan is crucial to ensure a successful start for your bar. Organize exciting promotional events, partner with local influencers, or introduce exclusive offers to generate excitement and draw in your initial customers.
Remember that a grand opening aims not only to draw a substantial crowd on the opening day but also to establish a loyal customer base that will continue to frequent your establishment in the long run.
Check out our article on 14 Best Restaurant Grand Opening Ideas.
Key Takeaways
- Explore small business or personal loans to secure the initial capital to kickstart your bar money venture.
- Join local restaurant incubators or accelerator programs that provide support, mentorship, and resources to help your bar’s concept take off without needing much upfront money.
- Begin with a small, low-cost setup or pop-up bar to test your business idea and prove its profitability before investing enough money into a full-scale bar.
- Attract private investors or business partners who believe in your bar concept and are willing to provide financial support in exchange for a share of ownership.
- Use crowdfunding platforms to engage with local groups and raise money from the community to support your bar’s concept and contact local restaurant associations.
- Save upfront costs by leasing equipment instead of purchasing it outright, and explore bartering arrangements with suppliers and service providers to exchange your skills or services for what you need to run your bar successfully.
Frequently Asked Questions (FAQ)
How to start a bar with little money?
Look for cost-effective ways to acquire essential equipment, negotiate favorable lease terms, and consider starting as a smaller, more specialized bar to minimize initial costs.
Seek creative financing options, such as partnerships or crowdfunding, and focus on marketing strategies to attract customers on a tight budget.
How much money should you have to start a bar?
You need to remember that the actual cost can change a lot based on where you open it, how big it is, what kind of bar it is, and the rules in your area. So, planning carefully and preparing for these costs is important.
