10 Steps on How to Start a Wine Bar

4) Select the Wine Bar Location

One of the essential choices the new business owner must make is where the bar will be located. Since this decision is so influential, here are some questions that may help clarify things:

• Does the area experience high foot traffic? How close is it to the center of the city or town? It makes sense for a hip, younger crowd to look closer to urban areas. On the other hand, the suburbs might work well if the plan is to create a more formal or family atmosphere.
• What size wine bar can the owner afford? Consider that a large amount of wine will need to be stored, and there should also be an area for comfortably dining and sipping wine.
• What specific facilities are required? A full kitchen? Wine taps and a full bar? The business model and plan should help owners finalize these plans.
• Whom will the bar’s neighbors be? A shopping plaza will create a much different landscape than a city street, and while valued neighbors can enhance business, the wrong neighbors can also damage it.
• What is the overall intended atmosphere? The bar’s concept can impact location.
• Who are the identified competitors, and how close are these other bar businesses to the proposed location?

5) Choose a Business Structure

Next, the new wine bar owner must decide on the business’s legal structure. An important choice in the process of opening the business, the structure of the wine bar will dictate:

• How much the individual owner is taxed.
• How much is the business taxed.
• The owner’s responsibility for company debts if the business goes bankrupt or legal action is taken against it.

Limited Liability Companies (LLCs) are a popular choice for entrepreneurs who open wine bars because they are inexpensive and offer protection over liabilities. LLCs help to shelter owners from business risks, and they also help the business save money on taxes.

LLCs can also strengthen the business’s credibility. However, there are other structural choices that wine bar owners may be interested in, such as a partnership or sole proprietorship.

While a sole proprietorship may make sense if the wine bar is a side business, it can be a difficult choice for an owner managing the wine bar as their full-time job. In addition, sole proprietors can be held responsible for the bar’s debt and lawsuits. Partnerships, LLCs, corporations, and S-corporations offer more protection for owners.

The Small Business Administration posts a guide online that can be helpful when making these structural choices. Once the new business owner has decided on a structure for the wine bar, they must apply for an Employer Identification Number (EIN). This number is used to file taxes, pay staff, and accomplish other essential tasks.

6) Estimate Staffing and Equipment Costs

While passionate staff members are integral to the success of all bars and restaurants, a wine bar presents its challenges. Therefore, it is crucial to recruit not only employees who are hardworking and enthusiastic but who have above-average knowledge of wine and grape varieties. Although some employees can learn on the job, a foundation of staff members who are knowledgeable about wine will help a new wine bar succeed.

Equipment costs will vary, but for a successful opening, most wine bars will need:

• One or more wine fridges
• A bar
• Furniture and glassware
• A large selection of wine
• A website and other costs associated with advertising and marketing

Ask suppliers for quotes, and take the time to shop around. It also makes sense to ask for recommendations from other business owners.

New wine bar owners should also be aware of administrative costs such as payroll, bookkeeping, and scheduling. Sometimes, hiring an accountant is a clever idea.

Lastly, do not forget about insurance for the new wine bar.

7) Obtain Licenses for the Wine Bar

The most necessary license for a wine bar is a liquor license, but that is not all needed to meet legal requirements. Wine bars usually need the following licenses, but check in with local and state authorities to ensure the bar is ready to open when the time comes. The bar will probably need:

• Sales tax license
• Resale permit
• Occupancy permit
• Food handler’s permit
• Business License
• Food service license

8) Create a Plan for Marketing

Bars rely solely on patrons, so being able to attract customers and keep them coming back is paramount. A strong marketing plan establishes the bar’s strategy for getting the word out to the masses, and successful business owners pay careful attention to this step. There are a few different ways to market the new wine bar and create a buzz about the business before it even pours its first glass of wine:

• Social Media: Various platforms, from Facebook to Twitter to Instagram, offer an easy and cost-free way to influence and inspire the public. From photos to videos to Instagram stories, make the bar come alive for people before they even visit. Capture the atmosphere, the wine, the food, and more so that patrons become enticed and spread the word. Social media also is an excellent way to interact with customers and advertise new wine deliveries, deals, and unique offerings.
  
  
• Website: An official website for the wine bar has become essential. It extends the bar’s web presence and provides the company with a virtual home base. From hours of operation to helpful links to news, the bar’s website should be clean, simple, and filled with up-to-date information. Also, the website can feature reservations through an online booking system.
  
  
• Traditional Media: Although the web has all but taken over our lives, local media lives on and can still provide a significant helping hand for small businesses. Bloggers, newspapers, magazines, and more are great outlets to target. So get in touch with journalists, invite them to the grand opening, and spend time putting fliers, signs, or balloons outside. Remember: any strategy that brings in business is worth time.

All wine bars are different, so choose the strategies that suit the particular style of the bar. Generally, a combination of these three marketing approaches can help a new business thrive.

9) Obtain Funding

Even if the entrepreneur has mastered marketing and ordered some of the top wines, if they do not have enough capital, the business will not succeed. Opening a bar involves renting a space, purchasing supplies, and paying the staff competitively, and these startup expenses add up.

For most wine bars, financing originates from these sources:

• Loans: small business loans are available through credit unions and banks. Private lenders can also offer funding, but pay attention to their repayment terms.
• Savings: known as “bootstrapping,” some entrepreneurs decide to pay for all expenses out of pocket. However, this is a risky move, especially in the restaurant industry.
• Partners: adding another owner or two can quickly solve financing problems if the business is open to it. Usually, the owners share the costs of the business based on their respective company percentages.
• Grants: small business grants are available through various local and national organizations, so some research is worth the effort here. Sometimes, a business can find funding through their city or even state.

Before deciding on one or more of these funding options, prospective business owners should estimate the contribution they can make to the company’s equity. Even a small amount of capital generated by owners can help offset funding needs. Plus, investing in the wine bar shows investors that the entrepreneur is dedicated to the business and that they believe in its potential.

10) Prepare to Open the Doors

The feeling of finally opening a new business’s doors to the public is incomparable. However, there are a few final tasks that can help improve the chances of early success. Competition is steep throughout the service industry, so even that tiny decision can set a business apart at this stage. Here are a few final tips for success in the industry.

• Plan a grand opening
• Advertise on social media
• Offer early incentives for visiting, such as a complimentary wine flight or discounted bottles
• Hold a soft opening for local media

Trying out one of these ideas could help the new wine bar gain notoriety. Whatever you choose to do, congratulations on opening your new wine bar!