Like most businesses, opening a bar in California is costly and time-consuming. In addition, a thorough business plan, permits, licenses, and approval from several government agencies are necessary for the startup. However, despite the mentioned requirements, owning a bar in California yields a high-profit margin based on food and alcohol that covers the abovementioned expenses.
#1. Create a Comprehensive Business Plan
Much like any business, opening a bar in California requires the development of a comprehensive business plan. The plan includes the current business location, its feasibility to customers, and the determination of the overall operation cost that is necessary to open the particular type of bar you want to engage in. A sports bar can be relatively expensive to put up as compared to a neighborhood pub.
Thus, it is very important to determine all the bar’s elements before starting the business venture. Furthermore, other elements must be included in the business plan, such as target market, overall bar concept, startup cost, operation cost, potential revenue, and projected return on investment. Research and planning and how it is executed can figure the success or failure of the business.
#2. Secure a Location
The bar’s location is a measure that spells its eventual success. This is combined with the overall concept of the bar in the hopes of enticing clients to support and patronize the bar. Factors such as zoning ordinances can affect and limit the location to which the bar is intended to be opened.
Therefore, it is essential to consult with the department of city planning or other concerned government agency for potential locations that are proximal to the desired location. Also, factors such as accessibility to customers, parking, and, most importantly, safety should always be considered in selecting the bar’s location. All of this can be done by making an ocular visit to the location at varying times of the day to see the overall landscape on which the bar is proposed to be built.
A conservative neighborhood may not be receptive to a bar business as compared to an area where customers look for a place to hang out and relax after those long office hours. Once all of this is settled, the next thing to do is to negotiate a leasing agreement. It is a wise idea to consult with a lawyer on this process since leasing agreements can be a complicated process.
#3. Guarantee Funding
The startup cost for establishments is based on the business that will be put up. Bars generate significant amounts of funding. This comes in the form of bar renovations (for prior existing bars), construction of a new bar, rentals, security deposits, license, and permit expenses, payroll, insurance costs, utilities, and initial inventory, among others.
Business startups for bars can be financially overwhelming at first. Thus, meticulous business planning should always be considered during the entire business process. As for the source of funding, it may come from your list of assets or through investments from friends and family, a credit line, a bank loan, or from a dedicated business partner.
#4. Procure a Permit With the Alcohol and Tobacco Tax and Trade Bureau
All businesses that are engaged in the sale of alcoholic products are required to register with the U.S. Department of the Treasury. This is done through the filing of TTB D 5630.d Alcohol Dealer Registration before the contemplated business opening and must also be done once business discontinuation is decided upon. It usually takes two months for the permit to be processed for online applications and three months for applications sent via mail.
#5. Alcohol License
Once the bar has received its permits with the Alcohol Dealer Registration, then it’s time to obtain an alcohol license under the California Department of Alcoholic Beverage Control. The liquor licenses issued are dependent on the type of alcoholic beverage that will be sold. A “42” license applies for beer and wine, while a “48” license applies for beer, wine, and other distilled spirits.
Supplemental licenses require at least 50 percent of the total revenue to come from food served. Three months is the expected turnaround time for the license processing. Upon application, the California Department of Alcoholic Beverage Control will alert the public near your bar’s location and give them 30 days to file any complaints regarding your business intention. If no objections were made, then the department shall conduct a thorough background investigation on all personalities listed under the business registration, as well as the business location and the business in general.
#6. California Responsible Beverage Service Training
The California Responsible Beverage Service Training allows for an avenue through which servers are provided with the knowledge and skills they need and are informed regarding their responsibilities concerning serving alcoholic beverages for on-premises consumption and mitigating the harm related to the use of alcohol in communities in California.
It is mandatory training in California in which alcohol servers and managers are required to be certified under any accredited RBS training provider (RBSTP) while passing the ABC exam within 60 calendar days from the date of employment. The RBS training was created under Assembly Bill 1221 (2017), whose sole intention is to reduce alcohol-related harm to local communities.
Key Takeaways
Opening a bar in California requires a comprehensive and meticulous creation of a business model plan which takes into consideration all the aspects affecting the business. This comprehensive plan is crucial to the success of the intended business. This includes business feasibility, funding, and acquisition of the necessary licenses and permits.
Responsible Beverage Service Training is a mandatory prerequisite in California for businesses that have the intention of selling alcoholic beverages. This ensures that all bars in California adhere to the set guidelines that are geared toward the prevention of any alcohol-related farm that might befall communities in California.
Owning a bar business is a high-profit endeavor. With the proper location and business strategy, it is sure to yield great financial gains. However, it is also important to consider all the licenses, permits, and zoning ordinances, as well as the community’s perceptions about the creation of local bars. Human safety and community orders always take precedence above all.
