Start a sports bar business 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 sports bar business. 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 sports bar business?
The start up costs for a sports bar can range anywhere from $100,000 to $1 million, depending on the size and scope of the operation. An average sports bar start up can usually be estimated around $400,000. Rental of an existing building, or construction and ownership of a new building, will affect some of your costs. Your liquor license will also add an initial fee to the total, somewhere between $15,000 and $400,000, depending on the location and local or regional laws. The build-out of your bar and kitchen, the tables and seating, electronics, and games, such as arcade style, pool, darts, etc. will also need to be purchased with the seed money.
What are the ongoing expenses for a sports bar business?
A majority of your expenses will pertain to the restocking of food and drinks. Liquor, beer, and wine restocks, along with whatever bar food you may offer, will need to be ordered weekly, if not more often. You should be able to estimate your needs, based on customer patronage, within a 6 month period of operations.
Who is the target market?
Your customer base are sports fans who enjoy having some drinks while watching their teams compete. Most customers will also gravitate to a local bar for location and familiarity.
How does a sports bar business make money?
Sports bars make money off of the food and drinks sold to customers.
How much can you charge customers?
Customers should be charged according to market prices of restaurants and bars in your region. Research the average mean pricing of your potential competition and find a fair, yet profitable price point for your food and drink.
How much profit can a sports bar business make?
Depending on the location and size of your establishment, an average bar will make $20,000-$30,000 per week. That adds up to more than $1 million per year. Much of this money will go back into the maintenance of the bar and paying your bar and wait staff, but sports bars can prove to be quite lucrative businesses, if managed correctly.
How can you make your business more profitable?
Offer clubs and organizations options for hosting their meetings at your establishment. Create special nights for sports competitions and trivia nights. Offer weekly specials to get more customers through your doors. Offer catering services, once you’re established, and continue to reach out to the local community. Becoming a staple of a community will go a long way in creating good will and keeping customers positive about your business, ensuring more customers for more sports bar visits.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Sports Bar Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
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 sports bar business 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.
Federal Business Licensing Requirements
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a sports bar business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A sports bar business is generally run out of a standalone building. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a sports bar business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your sports bar business will be in compliance and able to obtain a CO.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections
Businesses involved in the sale of alcoholic beverages are required to obtain a liquor license from the appropriate state or local agency. A comprehensive list of laws by state (including necessary licenses, zoning laws, etc), curated by the Alcohol and Tobacco Tax and Trade Bureau, is included here.
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.
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How to promote & market a sports bar business
Often, word of mouth will be your best advertising service. Keep a pulse on customer responses to your bar. Additionally, websites, social media, and print advertising are all acceptable, and frequently low cost, options for spreading the word about your business. Finally, signage for your sports bar will bring in new customers who find you on a whim or via exploration.
How to keep customers coming back
As mentioned above, customers are the lifeblood of your business and are critical to having a successful sports bar. Return customers happen when they feel comfortable and appreciated. It is critical to be consistent in quality and service to your customers. Make sure they leave each time with a positive outlook on your establishment. Offer incentives for return customers in the form of free drinks or food, discount certificates and recognition of their continued patronage.
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 Sports Bar Business 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?
Successful sports bar owners must be quite knowledgeable about the restaurant and bar business. A background in either of these fields of work is highly recommended. Managerial experience and a detailed eye, regarding finances, are also positive attributes.
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 sports bar business?
Customers are the goal of any successful business, especially a restaurant. Day to day activities at a sports bar, then, focus on this aspect. Restocking the bar and kitchen are regular activities, along with maintenance of the bar, in general. Contacting distributors and ordering supplies ahead of time ensures you don’t run out of customer favorites. Cleaning and updating the establishment’s amenities, such as televisions and sound system(s), are also necessary to maintain customer patronage.
What are some skills and experiences that will help you build a successful sports bar business?
As mentioned above, extensive knowledge of the restaurant and bar business is essential for striking out on your own. You will also need to create and maintain relationships with your distributors, as they will almost work as an outside partner in your business. Understanding and following trends in these industries is also critical, as is knowing the sports world. Your knowledge of your bar’s specialties, sports, food, and drinks, will help draw customers who share those same passions.
Finally, make yourself available to your patrons. Having more personal relationships with the people who frequent your establishment is an important aspect of your job. These customers will become more like friends and family over the years of maintaining a successful business.
What is the growth potential for a sports bar business?
With the popularity and exposure of sports constantly expanding, bars which cater to sports fans can be quite popular, as well. This also means there can and will be added competition. Your sports bar can be very successful if you have a good location, offer top quality entertainment, food, and drinks. Research your area to see which sports are most popular, if you would have enough regular customers, and what food and drinks fare best with your potential customers. The initial leg work will best prepare you for establishing a successful sports bar. Your growth potential will hinge on these numbers.
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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.
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.
What are some insider tips for jump starting a sports bar business?
Customers are your number one concern. Initially, you will be looking to attract, with retention being the long term goal. Stay aware of what customers want and don’t be afraid to ask your regulars what they like or might change. Make the bar and sports industries your business and become a student of both.
- Offer weekly specials and incentives to get people through the door.
- Create club or organization nights in which groups will meet up at your bar.
- Advertise with upcoming sporting events on a bar calendar.
- Host trivia or sports competition nights, such as pool or dart tournaments.
How and when to build a team
A sports bar will need a capable bar and wait staff from the beginning, although the size of your team can be minimal to start, depending on the size of your establishment. As your business grows, you’ll be able to continue adding capable members to your team.