How Much Does It Cost to Start a Bar Business?
- Nate Jones, CPCU, ARM, CLCS, AU
- Aug 25
- 2 min read
Updated: Nov 16
Opening a bar can be an exciting and profitable venture but it’s also a major financial commitment. Whether you're planning a cocktail bar, pub, nightclub, craft brewery, piano bar, or karaoke bar, understanding the startup costs is essential to budgeting and planning effectively.
At Wexford Insurance, we specialize in helping bar owners protect their investment with customized bar insurance. In this guide, we’ll break down the typical costs of starting a bar business and show you how to prepare for a successful launch.
Key Startup Costs for a Bar Business
1. Licensing and Permits
Before you serve your first drink, you’ll need to secure the proper licenses and permits. These vary by state and city but typically include:
Liquor license: $300–$14,000 depending on location
Business license: $50–$500
Health and safety permits: $100–$1,000
Entertainment/music licenses (if applicable): $250–$1,000
2. Lease or Property Purchase
Location is everything. Leasing a space can cost $2,000–$10,000/month depending on size and city. Purchasing property may require $100,000+ upfront.
3. Renovations and Interior Design
Creating the right ambiance is key. Renovation costs can range from $20,000–$100,000 depending on the condition of the space and your concept.
4. Bar Equipment and Furnishings
Essential equipment includes:
Refrigeration and draft systems: $5,000–$20,000
POS system: $1,000–$5,000
Furniture and décor: $10,000–$30,000
Glassware, utensils, and bar tools: $2,000–$5,000
5. Inventory
Initial alcohol and food inventory can cost $5,000–$20,000 depending on your menu and supplier agreements.
6. Staffing
Hiring bartenders, servers, security, and kitchen staff may require $10,000–$30,000 in initial payroll and training costs.
7. Marketing and Branding
Launching your brand with signage, a website, and promotions can cost $2,000–$10,000.
Establish Your Bar’s Brand with Contractor Back Office
Contractor Back Office helps bar owners create a strong brand by managing websites, invoicing, and social media. These tools make it easier to promote your bar and connect with your audience from the start.
8. Insurance
Protecting your bar is essential. Insurance costs vary based on location, size, and services offered. Typical annual premiums include:
General Liability Insurance: $500–$2,000
Workers’ Compensation Insurance: $1,000–$3,000
Commercial Property Insurance: $1,000–$5,000
Equipment Insurance: $500–$1,500
Commercial Auto Insurance (if applicable): $800–$2,000
Estimated Costs:
Expense Category | Estimated Cost Range |
Licensing & Permits | $500 – $16,000+ |
Lease or Property | $2,000/month – $100,000+ |
Renovations & Design | $20,000 – $100,000 |
Equipment & Furnishings | $18,000 – $60,000 |
Inventory | $5,000 – $20,000 |
Staffing | $10,000 – $30,000 |
Marketing & Branding | $2,000 – $10,000 |
Insurance | $3,800 – $13,500 annually |
Final Thoughts
Starting a bar business requires careful financial planning and risk management. From licensing and equipment to staffing and insurance, every cost plays a role in your success. With the right strategy and protection, your bar can thrive in the competitive hospitality industry.
👉 Contact Wexford Insurance today. Let us help you safeguard your investment and keep your bar running profitably.
