Sports bars are an excellent place to visit for happy hour specials and casual dining–but they can be pricy to establish. From the food costs to the liquor bottle display, there's a lot of money that goes into it. They also need some level of focus on restaurant risk assessment.
You’re probably mapping out a restaurant business plan if you’re starting a bar. As you probably know, many expenses go into opening a sports bar. All the bar books would agree.
There are numerous factors to be mindful of as an entrepreneur within the restaurant industry. So, we broke it down into rough estimates so that you can confidently budget your business venture.
Sports Bar Entertainment Cost
The sole purpose of a sports bar is to supply your customers with entertainment. On average, every sports bar has twelve televisions. If you opt for 50-inch flatscreens, expect to pay roughly $300 for each one. For satellite television, you should also budget about $130 a month (or $1,560/year.
Sports bars also have a couple of pool tables, running about $3,000 each. However, the bar layout will determine how much furniture and electronics you can fit.
As your business grows, you can revisit your entertainment budget to offer more to your customers. Equipment such as microphones and high-quality speakers won’t be necessary at the start.
Bar Staffing and Management
Bar staff, wait staff, and different types of chefs are all necessary to run a successful sports bar. One of the final steps before the opening weekend will be hiring your team, so you don’t want to overlook this expense. The labor costs of your sports bar will depend on your overall operating budget.
Considering training costs for all of your employees is a must during the initial phases of being in business. Hire employees with experience to spend less time during the training period. For instance, a bartender with mixologist certifications will be more efficient than someone with little to no experience.
Hourly wages for managers, bartenders, servers, and kitchen staff will increase your monthly expenses. Check out the average bar manager salary for more info.
The sports bar owner’s salary will also be dependent on the team’s size and other operating expenses.
If you own or manage a bar, use the following formula to measure efficiency:
X = Cost of Goods Sold (COGS) + Total Labor Cost
Licenses and Permits
To legally operate a sports bar, you’ll need to receive various licenses and permits. These costs will be dependent on your state and municipality, so you want to find out the details from local officials.
If you’re wondering what the average liquor license cost is, there isn’t a definite answer for everyone. This cost can range from a few hundred to tens of thousands of dollars. For instance, opening s sports bar in states like California or New York will be more expensive than others. There might also be local fees on top of the initial annual fee.
Once you obtain a liquor license, don’t forget to onboard a bar or restaurant inventory management system to supply food, various beer brands, and different types of alcohol to your customers, such as whiskey, wine, and more, to create popular cocktails.
Check out our free inventory spreadsheet to effectively take inventory of your liquor storage cabinets.
Like liquor license fees, bar permits can also cost a small fortune. This figure is also dependent on location, but we recommend budgeting around $3,000 for it.
You can expect to pay roughly $5,000 per year on bar and restaurant insurance. Take insurance into serious consideration before opening your sports bar, as this will protect you from liabilities.
Interior Design Cost
Now that you have a building where you’ll operate your sports bar, it’s time to give it an aesthetic. Stylish, clean, and on-brand bars will create a welcoming atmosphere and look great in photos.
Sports memorabilia will make your startup costs higher than what they’d be for an average bar. However, the thematic decor will be interesting to look at, and hanging everything up will be a fun interior design project.
From tables and chairs to the fixtures that light up the space, we recommend setting aside $25,000 to furnish your sports bar.
To fully furnish your sports bar, you’ll need the following items:
- Sports memorabilia
- Tables and chairs
Though it may seem like a high budget for what it’s for, stock up on all of these items (except the memorabilia) in case anything breaks, the dishwashers aren’t functioning correctly, etc.
If you need inspiration, work with a design firm or hire an interior designer. Investing in an interior design service will pay off, especially once it becomes memorable to customers.
Exterior Design Cost
Let people driving by know who you are with outside decor and a lit-up sign. Many people discover new places just from being out and about, so you don’t want to miss out on the outdoor real estate.
On average, outdoor signs can cost roughly $1,000. Though it may seem like a hefty amount, just think about all the attention it’ll draw to your sports bar.
Point of Sale Technology
A point of sale (POS) system will allow you to streamline payments, especially for customers using debit or credit cards. The right kind of POS software will also help you simplify food delivery orders if this should be something you offer.
A POS system will allow you to keep track of revenue, which is essential for managing your expenses and simplifying restaurant operations.
Estimate approximately $5,000 for an efficient POS system. This figure would include hardware, screens, tablets, keyboards, etc.
Social Media Marketing Budget
Consumers spend a ton of time on their phones scrolling through social media. During the months leading up to your grand opening, engage with accounts of other local bars, posts with relevant hashtags, and users who follow your competitors.
Organic social media marketing can do wonders, but paid advertisements bring the visibility up a notch. If you set aside $500 a month for marketing efforts, you will have enough to push your content to the right people and increase bar profits.
If you figure out that your social media ROI is higher than you thought, you can always scale back your marketing budget. As your business grows, organic traffic will increase, anyway.
Your budget will come in handy if you take your digital marketing strategy to the next level by conducting restaurant SEO practices.
You should also dip into this budget to create a professional website. It doesn't have to be complex, but make sure that it includes:
- Hours of operation
- Location and address
- An “About Us” section
- Menu QR codes
- Dessert menu
- Drink specials
Learn about other restaurant marketing ideas to accelerate exposure.
Business Registration Cost
A limited liability company (LLC) should be the business structure for your sports bar. An LLC will provide you with legal protection against personal debts and liabilities.
If you partner with other people to start your business, an LLC will also accommodate multiple people.
LLC registration fees can vary depending on the state. Since state filing fees can differ from one state to another, it’s advisable to allow for more than it might cost. To register your sports bar as an LLC, expect to pay up to $500.
To accept all types of payments, you'll also need the following equipment:
- Cash register with cash drawers
- Receipt printer
Cost of Bar Equipment
A functional sports bar must have a variety of equipment. Keeping food items fresh and obtaining the proper tools to serve menu items are necessary.
The following items are what you should prioritize getting before opening your sports bar:
- Kitchen appliances
- Soda fountains
- Draft beer dispensers
- Ice machines
- Light fixtures
We recommend setting aside $50,000 for all bar equipment and appliances to be safe. However, take advantage of Black Friday discounts and other types of sales. Major retailers often host huge sales events where you can save a ton of money on some of your most expensive items.
It can feel daunting to lay out such a high expense; however, keep in mind that high-quality equipment can last for years. You can go almost a decade before replacing some of these items when purchasing a reputable brand.
Miscellaneous Sports Bar Expenses
In addition to standard fees, there are also a handful of random bar and restaurant expenses that you’ll face when starting a sports bar. Some miscellaneous expenses may include:
- Bookkeeping services
- Tax preparation services
- Legal advice
- Cleaning supplies
- Menu lamination machine
A business savings account and emergency fund are always safe for less-obvious expenses.
Recurring costs will be an essential part of your budget too, so keep track of which expenses are flat rates vs. monthly fees.
The necessary funds to open a bar can be much lower or higher than the figure above; however, location, bar size, and furnishings will drastically impact your total expense.
Frequently Asked Questions About Costs to Open A Sports Bar
How Profitable Is A Sports Bar?
Sports bars are some of the most profitable small businesses, as they are welcoming to the general public, and sports is a favorable niche market. Depending on the location, popularity, and expenses, a sports bar can bring in nearly one million dollars every year. They are a big part of the profitable answer to how much do bars make.
How Much Do Bar Owners Make A Year?
Sports bar owners can make anywhere from $40,000 to $60,000 per year. However, many factors go into this salary.
What Type Of Bar Is Most Profitable?
Bars with limited entree food are the most profitable. Bar owners can save quite a bit of money by ordering fewer ingredients to make meals. Plus, bars typically generate most of their profits from liquor sales.
If you calculate the food cost for your bar and realize that it wouldn’t negatively impact your business, an extensive menu could be a good source of revenue. But first, learn how to price a menu to maximize profits.
Let’s Sum It All Up
On average, the following startup fees should give you an estimate of how much it’ll cost to launch a sports bar:
- Entertainment: 6,730
- Staffing and management: TBD
- Licenses and permits: $30,000
- Interior design: $25,000
- Exterior design: $1,000
- POS technology: $5,000
- Social media marketing: $500
- Business registration: $500
- Bar equipment: $50,000
You could expect to spend almost $120,000 to open your sports bar. We didn’t include employee expenses, as this will depend on the number of employees you hire, which depends on the size of your bar.