Start a beer garden by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. 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.
Check out our How to Start a Business page.
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 are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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.
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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your beer garden is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment 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.
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.
Learn more about General Liability Insurance.
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.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a beer garden
You can dig deeper into your target market by identifying demographic data and psychographic data. Demographic data is the physical aspects of your market – age, gender, etc. Psychographic data is the mental aspects of your market – political inclinations, hobbies, humor, etc. For example, if you know that a college is within walking distance, you can target college students that love their football team.
Promotions are another common marketing method for these types of businesses. Happy hours, drink specials, food specials – you can get people in the door by offering good deals on products that they love.
How to keep customers coming back
Beer gardens are more likely to succeed if they have the right atmosphere. People are coming to enjoy beer and have fun, so you need to cater to those desires in multiple ways. Are the lighting and temperature comfortable? Are the beers interesting? Does the food add to the experience? It may take some trial and error, but it’s important to keep trying to create the perfect atmosphere for your customers. If coming to your beer garden feels like coming home, they are more likely to keep coming back.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Beer Garden In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.