How to Start a Beer Garden

Start a beer garden by following these 10 steps:

1. Plan your Beer Garden
2. Form your Beer Garden into a Legal Entity
3. Register your Beer Garden for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Beer Garden
6. Get the Necessary Permits & Licenses for your Beer Garden
7. Get Beer Garden Insurance
8. Define your Beer Garden Brand
9. Create your Beer Garden Website
10. Set up your Business Phone System

We have put together this simple guide to starting your beer garden. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

What are the costs involved in opening a beer garden?

Starting a beer garden business can cost anywhere between $25,000 and $100,000, depending on where you are, what you are planning on offering and the size of your beer garden. Beer gardens typically require more space than a small indoor bar, so costs may be higher than you first expect depending on the rental costs in your area. If you are going to brew your own beer, the costs of starting your business could be $100,000 plus when you add in brewery equipment.

What are the ongoing expenses for a beer garden?

There are numerous ongoing expenses for a beer garden business, including liquor costs, food costs, labor, rent/mortgage, utilities, liquor licenses, and so on. The total monthly costs can add up to $20,000 or more depending on the makeup of the business and its location.

Who is the target market?

The target market for a beer garden business is beer lovers and locals looking for a place to unwind. Some are looking for special, unique beers to sample, while others are seeking a space to hang out with their friends – whether they are college students, seniors, or someone in between.

How does a beer garden make money?

A beer garden makes money by charging patrons for beer and other beverages, and often food as well. Beer gardens may also make money by hosting live entertainment and offering private event planning and hosting services.

How much can you charge customers?

It is important to price your products correctly, which can be challenging at first when you don’t realize just how much markup is necessary. Beer at bars is typically marked up 200 to 300 percent, with some beers even being marked up to 500 percent. Your profit margin should be somewhere around 75-80 percent for the beer you sell. Aim to strike the right balance between turning a profit and keep your customers happy, because if your beer is too expensive customers are unlikely to stick around.

How much profit can a beer garden make?

A bar can make around $20,000-$30,000 a week on average, although many variables can alter this amount. With average startup costs, that means that a bar can pay off investors and loans in about two years – after which the business will start making a profit.

How can you make your business more profitable?

You can make your beer garden more profitable by attracting more customers and more regulars in particular. If you can make your beer garden a preferred spot for your target market, they may show up every week or even several times a week to purchase your beer and food. You don’t have too much control over your costs and how much you charge because your competitors have many of the same products. However, you do have control over the atmosphere and experience of your customers.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your beer garden is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Entrepreneurs who have a strong obsession with beer, relaxed hospitality, or both, are a good fit for a beer garden business. Some owners brew beer as part of their business, while others are more interested in providing a fun space for patrons to enjoy themselves. If you dream of spending your days talking about beer and making sure your guests can leave their worries behind, you could be the ideal person to start a beer garden business.

What happens during a typical day at a beer garden?

A typical day at a beer garden business starts with managing logistical concerns, such as taking inventory, ordering supplies, and preparing for events like reservations, parties, and so on. Staff tends to work in shifts, while management and/or owners may be there all day. Beer gardens are similar to bars and restaurants, with opening and closing shifts, daily cleaning tasks, end-of-day cashouts, and all the other tasks that must be done to prepare for guests, serve guests, and then close the establishment. Each day the process is repeated.

What are some skills and experiences that will help you build a successful beer garden?

Restaurant and bar experience, particularly management experience, will help you be a better beer garden owner. Starting any restaurant or bar is a big undertaking that requires far more than just a love for the products you are serving. You will need to manage staffing, financing, food and beverage sales, inventory, health codes, legal requirements, marketing, and more to get a beer garden business off of the ground.

What is the growth potential for a beer garden?

The bars and nightclubs industry has seen a small yearly decline from 2016 through 2021, although experts expect 15.7% growth in 2021 – significant, but it’s important to keep in mind the substantial decline in the industry throughout the 2020 pandemic.