How much does it cost to open a bar?

Construction is often the hardest number to estimate, so get a contractor to inspect the space before you commit. Then work through rent, equipment, licensing, opening stock, staff training and the cash you'll need while sales build.

We'll start with the lines of an opening budget, look at what other bar owners have borrowed, then show you how to price each line for your own space.

The lines of an opening budget

Some of these costs are fairly predictable. You can get a written rent offer, look up a license fee and price the opening stock from your menu.

Others need more work. A contractor needs to see the space, and your equipment suppliers need to know how busy the bar will be.

Get the quoted costs first, then add the expenses that depend on them. That's how the budget starts to become something you can trust.

What bars borrow to open

An SBA 7(a) loan is a bank loan guaranteed by the US Small Business Administration (SBA). In our analysis of the SBA's loan data, banks made 766 of these loans to open a new bar from October 2019 to June 2026. The median was $300,000, and half were between $117,500 and $640,000.

About 1 in 5 of these loans (166 of 766) had a term of at least 20 years. Long SBA loan terms are generally associated with financing real estate, so those projects may include building purchases.

Among the remaining 600 loans, the median was $218,000. That's a useful comparison when thinking about a leased bar, but it isn't a standard opening budget. You still need to price your own space, equipment, licenses and cash reserve.

Lease, deposit and rent before opening

Rent is quoted per square foot per year. In US shopping centers, the average asking rent (the rent landlords advertise) was $25.65 in the second quarter of 2026.

For example, say a landlord asks $23.40 per sq ft a year for a 2,000 sq ft (186 m²) space. That is a little below the average. It costs 2,000 × $23.40 = $46,800 a year, or $3,900 a month. At the New York City metro average of $42.27, the same space costs $84,540 a year, or $7,045 a month.

Annual rent = square feet × asking rent per square foot per year

A broker can find the asking rents on your street. Before comparing two spaces, ask for the full occupancy cost, not just the advertised rent.

A net lease may add property taxes, building insurance and common-area maintenance charges. Ask about annual increases, utility responsibilities, rent-free construction periods and any landlord contribution to the build-out. A cheaper base rent isn't always the cheaper lease.

Before you open, you pay the deposit, the first month and any rent during the build-out. With a two-month deposit, the deposit and first month come to 3 × $3,900 = $11,700. The bar earns nothing during the build-out, so negotiate hard on that rent.

Build-out, equipment and POS

The build-out is the construction work on the space. Its cost depends on what the space already has and how custom your design is. A second-generation space was already a bar or restaurant. It needs far less work than an empty room if its drains are in the right place, it has enough power and its restrooms meet the building rules. But if you move the bar to the other side of the room, every drain and water line moves with it.

Have the contractor check the existing services, not just what the room looks like. Plumbing, ventilation, electrical capacity, restrooms and accessibility requirements can turn a simple-looking renovation into a much larger job.

Price the equipment item by item from your menu, with each piece sized for your busiest hour.

For the POS, get two written quotes. Each should list the hardware per station, the monthly software fee per terminal, installation and the card processing rate. You pay processing on every sale from the first night. So cheap hardware with a higher processing rate can cost more in the end.

Include the upfront hardware and installation costs in your opening budget. Put the recurring software fees and card processing charges in your operating forecast.

Liquor license

Each state sets its own license types and fees. The table shows three states.

These are state application or license fees, not necessarily the full amount you'll pay to become licensed.

California limits how many bar licenses each county can have, so many bars there buy an existing license from a holder in the same county. They pay the holder's price, which can be substantial, plus $1,565 to the state for the transfer. The listed application fee is also separate from the annual license fee due with the application.

New York charges the fee for each customer bar (a counter where guests are served). So a Manhattan bar with a second customer bar upstairs pays it twice: 2 × $4,352 = $8,704. Filing fees add $200, plus $20 for the second bar.

In every state, budget separately for local requirements, legal help and any additional permits your venue needs.

Opening stock

Opening stock is the drinks stock you buy before you open. Start with your opening menu and work out how much of each ingredient you expect to use before the next delivery.

For example, $15,000 in weekly drink sales at a 20% pour cost means about $3,000 of stock used in a week. Holding a week and a half of that usage would cost around $4,500.

Opening stock, first estimate ≈ 1.5 × weekly sales forecast × pour cost %

With two deliveries a week, each delivery covers half a week, so the same assumption gives 1.5 × half a week, or $2,250. Either way, that's a useful first estimate, not your final order.

Now check the products individually. You may need a full bottle of something you expect to pour only a few times, or extra stock of your house gin because it appears in six cocktails. So the stock you buy can cost more than the pour cost of what you expect to sell.

Take the pour costThe cost of a drink's ingredients divided by its menu price, as a percentage. from your costed menu, one drink at a time, not as an average. Then set each product's parThe stock level you order up to: on order day, what you count plus what you order equals the par. from your delivery schedule, supplier lead times and safety stock. Build the opening order from those product-level needs, then check the total against your budget.

Payroll before opening

Two wage costs come before the first sale: the manager who starts early, and the team's training. The Bureau of Labor Statistics reports a median of $67,320 a year for food service managers working in drinking places in May 2025. That gives us a useful salary assumption for the example, although it isn't a separate survey of bar managers. Bartenders in bars had a median of $16.01 an hour, tips included.

Say your manager starts two months early, and 10 staff each complete 30 paid training hours.

The $16 training rate is an example, not a national minimum. Use the wage required where you're opening and account for any overtime, benefits, state payroll taxes and workers' compensation.

If staff aren't receiving tips during training, don't budget as though tips will make up part of their required wages.

The reserve: cash to hold back

The reserve is cash you hold back for the first months. Opening the doors doesn't mean the bar will immediately pay its own bills. Keep it separate from the construction contingency, which covers overruns before you open.

You may have the rent, the manager's salary, insurance and loan payments due long before sales reach the level you planned.

Some owners start by setting aside three months of fixed costs. That's a useful rough check, but it doesn't tell you how much cash the business will actually need.

A better way is to forecast the cash balance month by month, starting from zero on opening day.

Start with expected sales, operating payments and debt repayments. Then model a slower opening. The bar business plan template shows one way to do this by reducing the planned sales level by 15 percentage points.

Find the lowest cash balance in that slower forecast. That's the minimum shortfall you need to fund, before adding a margin for unexpected costs.

Once you've worked out the reserve, add it to the opening budget. If that means borrowing more, update the loan repayments and run the cash forecast again. Keep the reserve and financing assumptions consistent.

Questions

Sources

1. California Department of Alcoholic Beverage Control, Application fee schedules (effective January 1, 2026).
2. California Department of Alcoholic Beverage Control, Priority registration drawings: frequently asked questions.
3. New York State Liquor Authority, Schedule of retail license fees (revised June 12, 2026).
4. Texas Alcoholic Beverage Commission, TABC license and permit fees chart (two-year fees effective September 1, 2021).
5. Alcohol and Tobacco Tax and Trade Bureau (TTB), Beverage Alcohol Retailers.
6. Cushman & Wakefield, U.S. Shopping Center MarketBeat, Q2 2026 (asking rents, preliminary).
7. U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2025: national industry-specific estimates, NAICS 722400 drinking places. Median food service manager (11-9051) $67,320 a year; median bartender (35-3011) $16.01 an hour, tips included.
8. Internal Revenue Service, Topic 751, Social Security and Medicare withholding rates.
9. U.S. Small Business Administration, SOP 50 10 8.1, Lender and Development Company Loan Programs (effective October 1, 2026).
10. U.S. Small Business Administration, 7(a) & 504 FOIA: 7(a) loan data, fiscal year 2020 to present (data as of June 30, 2026). 7(a) loans to NAICS 722410 drinking places with business age 'Startup, Loan Funds will Open Business', approved October 2019 to June 2026: 766 loans, median $300,000, middle half $117,500 to $640,000 (nearest-rank quartiles). Term in months of 240 or more: 166 loans; the other 600 have a median of $218,000.