How to Open a Bar With No Money (2024 Guide)

How to Open a Bar With No Money

Anyone who loves food or who has worked in the restaurant industry has grand ideas about running their own restaurant or bar. But restaurants are notoriously difficult to open, with one in three failing in their first year. You need money to open a food establishment and to fall back on in case of failure, right?

While yes, opening a bar can be expensive, you need guts and vision more than anything else.

Still, with a high bar failure rate, it can be challenging to find investors, and bar opening costs can easily run hundreds of thousands of dollars. You need to find money if you don’t have any, but it’s the guts and vision that come in handy here.

Many people have opened a bar with no money, and you can be the next one to do so if you get creative. While you may not know how to open a bar with no money, this guide will help you understand what you need to be successful.

In this article, you will learn creative ways to find capital to open your bar.

What do you need to open a bar with no money?

So, you’re short on money to open your bar. What you need is an abundance of everything else, and that includes work ethic. The step-by-step process of opening a bar can be long, but it doesn’t need to be complicated. Here are the basics of what you need:

• A bar concept: This part should be easy, you’ve probably thought about your dream bar for years before taking the first steps toward making it a reality. 

• A bar business plan: The first tough step is writing your bar business plan. Articulating your idea is one thing, but getting into the nitty-gritty of how it will operate day-to-day, how it will stand out in a crowded marketplace, and how you’ll maintain a sustainable profit margin is the meat and potatoes of your eventual pitch to investors.

• Bar capital: We’ll explore this more in-depth later, but even if you want to open a bar with no money, you’ll have to find money somehow.

• Licenses and permits: Different states and cities have different rules about licensing and permits. Make sure you explore what’s needed in your location and understand the feasibility of getting the necessary licenses and permits. Massachusetts, for instance, is notoriously tight-gripped with liquor licenses.

• Menu: Again, you may have thought about your bar menu a bit already when you dreamed up the concept, but now’s the time to put it all in writing. This will be an important part of your business plan and pitch to potential investors.

• Bar staff including FOH, BOH, and managers: You don’t need to hire them right away, but you should understand from early stages what kind of staff your bar will need and what that will cost.

• Bar technology: Restaurant technology has come a long way in recent years, making it easier than ever for bar owners and managers to streamline operations and manage both short- and long-term financial goals. You’ll need a point-of-sale system, inventory software, accounting and payroll software, and more. 

• A marketing or promotional plan: Bars are incredibly competitive. Your bar marketing plan will communicate to investors how you intend to stand out from the crowd and bring in customers.

• An opening date and launch plan: Your launch plan is tied in with your marketing or promotional plan, but more specifically targeted to your first day (or days if you plan on a soft opening or special pre-launch events.)

How much does it cost to open a bar?

The average cost to open a bar, according to Investopedia, is between $110,000 - $850,000, depending on whether you’re renting or buying. It’s less expensive to buy an established bar than it is to start a new one.

How to open a bar with no money?

You probably don’t have hundreds of thousands of dollars just lying around. So, how do you open a bar with no money? There are a number of avenues worth exploring.

Use a restaurant incubator

Restaurant incubators are shared spaces filled with all the kitchen facilities you may need, giving you space to practice your concept while gaining expertise and guidance from other experts.

The benefits of an incubator may include:

• Equity-free capital

• Business development training

• Mentorship programs and workshops

• A community of supportive culinary professionals

There are incubators all over the country, from giants like yogurt company Chobani Incubator to more local program like Boston, MA’s CommonWealth Kitchen.

Apply for restaurant loans or explore capital opportunities

There are many restaurant financing options available to bars and other food establishments, but they’re tricky to generalize about.

Depending on your specific situation, you may be able to find partnering lenders, get help from community development organizations, or be eligible for micro-lending programs like the Small Business Association (SBA) loan program. There are many resources available online for new small business owners, so spend a little time doing some research in your area.

Peer-to-peer lending services that match lenders with borrowers and traditional bank loans are also options for bar startup funding. You may be able to get a low interest rate, but will be subject to a long review process.

Finally, alternative lenders who specialize in the restaurant industry are becoming increasingly popular for new bar and restaurant owners. Lenders who understand the nuances and challenges of the restaurant industry can simplify the process and help develop a custom repayment plan for your business.

Find an investor

You can always go through the process of finding a restaurant investor to find someone who is as enthusiastic about your bar as you are, but expect it to be a long, and likely difficult, process.

The best investors are likely people you already know. Angel investors are those who invest because they believe in a project or vision, and often come in the form of deep-pocketed family members or mentors who are willing to bet on you. Lean on your existing network to find connections to people who might be looking for opportunities to invest in local talent or businesses — especially ones that could benefit the community.

Get creative with crowdfunding

Most people probably wouldn’t think of crowdfunding when it comes to food establishments. But sites like Kickstarter, Indiegogo, GoFundMe, and Wellfound have successfully funded restaurants before.

The trick is capturing the imagination and excitement of a local audience that understands what you’re trying to do and believe in the mission. That could be through a creative grassroots marketing campaign, pitching your business plan to influential locals, offering awesome incentives to backers, or any number of creative solutions. You just want to get as many people as possible to throw a little bit of money your way to help your bar get off the ground.

Start small

While starting a mobile bar isn’t quite as easy as testing out a restaurant as a food truck, you can try out your bar as a pop-up as a proof of concept for potential investors. Pop-up bars became especially trendy during the COVID-19 pandemic, and new bars have evolved into nationwide institutions or started laying brick-and-mortar roots by beginning as pop-ups.

Greg Boehm’s Christmas-themed Miracle pop-up, for instance, takes over more than 100 bars worldwide every December. Before NYC staple Death & Co. opened a second location, it attempted pop-ups in ten different cities to test the concept’s viability in different markets before settling on Denver. Denver staple Death & Co. New bars all over the country have taken out short-term rentals on spaces to test menu items and bar concepts before committing to expensive, more permanent digs.

Reach out to your local restaurant association

Finally, your local restaurant association has contacts and guidance that may be invaluable to new bar owners trying to open a bar with no money. They may make introductions to potential investors, have leads on pop-up or permanent spaces, or have resources to help you develop your business plan or pitch.

A few resources to check out are:

• The National Restaurant Association, where you can find events and webinars about restaurant growth and advice for small businesses.

• Your state restaurant association, which may have specific programs or perks to help new bar owners.

• Local groups like rotary, which encourages dialogue and idea exchange about businesses from all over the world.

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Opening a bar can be an extremely expensive, time-consuming, and risky endeavor. You may have an amazing idea, but with no money, it can be exceedingly difficult to make your bar a reality. However, this guide will help you find resources to open a bar with no money, so long as you have the passion and vision to see it through.