How to Start a Sports Bar Business

Start a sports bar business by following these 10 steps:

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

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.

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 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

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

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.

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.

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 sports bar business 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.

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.

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.

Food Regulations

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

Liquor Licensing

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.

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?

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.

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.