In Spain there are about 255,000 bars with 1.7 million people working in the sector. The boom of such businesses is so great that in the centre of Madrid there are no licenses to open bars.
Choose very well where to open it! This factor conditions 50% of the success of your venture. The other 50% is divided equally between the brand you choose as a franchise and your management. Learn every detail of how much it costs to open a bar.
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How much does it cost to open a bar?
In order for you to estimate the cost of opening a bar, let’s start with a premises of hypothetically between 90 and 110m2. It is best to look for one that used to be a bar in the past, so that you can focus only on the cost of renovations and machinery.
- Between the project of the work and the inauguration it would be 2mil€
- The work to fit it out would amount to 3500€
- The licence to work is estimated at 1400€
- The building licence is estimated at €200
- Renting the property another 800€
- Furniture and machinery would be around 4500€
- Self-employed registration another 250€
- Soundproofing of the bar would be 120€
Giving a bill of 12770 euros. It is best to opt for an establishment in an urban area and if it is corner, so much the better!
Remember that you will also require a plaque to identify your bar. The bulk of the costs for the administrative approval vary depending on the region in which you will be doing the paperwork.
How to set up a bar?
In the section above we talked about costs. Now we will look at the importance of each aspect to your success. Refurbishment works are the essential refurbishments such as putting up partitions for bin and bag space.
Also renovate the toilets to make one handicapped accessible. It also involves changing the bar and painting for the establishment. You will need to draw up the technical project concerning the work and inauguration.
You need to change the ownership of the licence if you opted for a premises that used to function as a bar and pay the implicit fees. Was it closed? Then you will need to apply for a new licence.
The cost of the building licence will be subject to the cost of the calculation of the entire building work. The self-employed registration includes discounts for the new ones, it also applies if you had five years of sick leave. So you will be paying €50 per month for the first half of the year.
As for renting the premises, consider requesting a grace period from your landlord. This would cover the time the premises will be closed for the works. Nowadays, any hospitality establishment needs to be soundproofed.
What my bar must have to be good
It is important that you check the PGOU of your local council. That way you will know the proportions of the toilets and how many you should have. In your estimate of how much it costs to open a bar, make sure you include a chimney. This should be individual and go up to the roof of the building.
For your bar to be successful, you need to know what hours you can open, whether or not you can have a stereo system It is also advisable to know the licensing restrictions.
Terraces have an overwhelming charm that can detonate the appeal of your bar. So make sure you can do one. Check the attributes of the area, whether it has numerous shops, grocery stores, easy access to public transport and other bars.
Of course, the liquor will make a difference between a top bar and one on the verge of bankruptcy. So take the time to choose the right brands and types of drinks, as well as the drinks glasses, drink stirrers, straws…
In Europe, beer accounts for 55% of sales, followed by distilled options with 31%, while wine accounts for 10%. How do you build your inventory? Make sure you have 45% in beer, another 40% in various spirits. Only 5% in wine leaving the remaining 10% for mixers.
How to be successful with my bar?
Once you have covered the aspects of permits and infrastructure, you have to choose carefully the human resources you will have. Discard hiring just because “they are attractive people”, go for competent and qualified people.
This way they will give first class customer service. The way you serve will be crucial for the customer to return, even more so than the alcohol on offer. Gastronomic quality cannot be neglected either.
The range of products, quality, suppliers, an attractive menu and an analysis of the competition will also play their part. As far as marketing is concerned, go with professionals! This way you will make your potential customers fall in love with you until they become loyal.
If your bar is less than 120m2, you will probably have to run it as a family business. Because the income will limit you to pay waiters, unless the flow of customers is excellent.
It is recommended that the annual rent of the premises is a maximum of 10% of the turnover of your bar. A bar has an average turnover of 400,000 euros per year and an average ticket of 8€.
Segmented as follows: 30% staff salaries, 25% raw materials, 20% rents and other fixed costs. Finally the margin takes another 25%. These percentages will help to know from the beginning how much it costs to open a bar.
Half of the success of your bar depends on choosing the right location. Costs will go up or down depending on where you open. Depressed areas comprise low-income sectors that are not very willing to spend. They are close to metropolises.
To be successful in such an area, low prices are needed to attract young people. On the other hand, the affluent sectors are of modest income and family atmosphere, although industrial figures are included.
Expenses decrease but the advantage is that you will have more loyal customers. Consumer behaviour is to consistently go to the store of their choice, rather than rotate.
Finally, there are the premium areas that have a much higher budget. Users are consumerist and spend for leisure. They comprise the core metropolis and tourist areas, but there is little loyalty.
We hope we have answered your questions, thank you for your attention!