20 Steps to Start a Drinking Places Business
Opening a bar, tavern, pub, or lounge takes more planning than most people expect. This guide walks you through every stage of launching a drinking places business — from choosing your concept and finding a location to securing the right permits, stocking your bar, and bringing in your first regulars.
A step-by-step guide for getting your food service business off the ground — whether you're cooking from a home kitchen, running a food cart, or planning to open your doors for the first time.
Most people who read this are already feeding paying customers. Maybe you cater for friends' events, sell plates from your kitchen, or run a stand on weekends. That is a real food service business. The paperwork catches up to the work, not the other way round. Find where you are on the map above and start there. You don't need to go back to the beginning if you're already selling — you need to fill in what's missing.
## Prove
Before anything else, decide that this is a business, not a favour you do for people. Food service is hard, physical work with tight margins and long hours, and the people who last are the ones who chose it on purpose. Sit down this week and write one sentence: "I run a food service business." Say what kind — a taco cart, a catering service, a small lunch spot. You don't need it perfect. You need to stop treating your cooking as something you happen to do and start treating it as something you sell. That shift is the whole first step. Everything after this is detail. Write the sentence, put it where you'll see it, and mean it.
Pick the single dish, meal, or service you do best and lead with it. A menu of forty items confuses buyers and wastes food. A tight offer — "wood-fired pizza," "boxed lunches for offices," "birria tacos on Saturdays" — is easier to sell, cheaper to run, and easier to get known for. This week, name your one thing in plain words a stranger would understand. Cook it three times and time how long each takes and what it costs you in ingredients. That tells you whether you can make it at volume without losing money or your mind. You can add items later once the core sells. Start narrow. The businesses that spread themselves thin on day one are the ones that burn out fastest.
A drinking places business sells direct to the people sitting at the bar or at a table — there is no wholesale or distribution layer between you and your customer. That said, understanding who those customers are in structured terms helps with marketing and location decisions.
The primary buyer is an individual consumer visiting for recreational or social purposes — someone ending a workday, celebrating an occasion, watching a game, or meeting friends. A meaningful secondary segment includes people attending a privately booked event, such as a birthday party or work function, where the drinking places business serves as a venue. A third segment, relevant for bars located near hotels or entertainment districts, is the travelling guest who chooses based on proximity and atmosphere rather than loyalty. Building your concept around one or two of these segments early will shape everything from hours to layout to pricing.
Take money from one person for your food this week. Not a promise, not a "maybe next time" — an actual sale where cash or a payment lands in your hands. Post in a local group, offer a plate to a coworker, set up outside an event, or take one catering order for a small gathering. The point is to prove someone will pay, and to feel the wholeloop: they order, you cook, they eat, they pay, they tell you if it was good. One real sale teaches you more than a month of planning. Write down what they paid, what it cost you, and what they said. That single transaction is your business in miniature. Do it before you spend money on anything else.
## Legalise
If you're already selling food, you're operating as a sole proprietor by default — that's a real, legal way to run a business, and you haven't done anything wrong by starting there. Now decide whether to stay that way or form something separate, like an LLC, which puts a line between your personal money and the business. Food service carries real risk — someone can get sick, a fryer can burn — so many owners want that separation. This week, read a plain-language comparison of sole proprietor versus LLC for your situation. Think about how much personal money you'd lose if something went wrong. You don't have to file anything yet. You just have to understand your options so the next step is a choice, not a guess.
If you chose to form an LLC or corporation, this is where you file it with your state's business filing office — usually the Secretary of State. If you're staying a sole proprietor but operating under a name that isn't your own, you likely need to register that name, often called a DBA or "doing business as," with your state or county. This is the step where your business becomes official on paper, and it's normal to reach it after you've already been earning. This week, find your state's business registration website and read what it asks for. Filing is usually a short online form. Getting this done unlocks the bank account, the permits, and the tax steps that follow. It's the hinge the rest of the guide turns on.
An EIN is a free federal tax number from the IRS that works like a Social Security number for your business. You'll need it to open a business bank account, hire help, and file taxes. Apply directly on the IRS website — it takes a few minutes and costs nothing. After that, register with your state's tax agency, since food sales usually mean collecting and remitting sales tax, and register with your city or county if they require a general business license. This week, get your EIN first because everything else asks for it, then look up your state's sales tax registration. Each layer — federal, state, local — has its own sign-up, and food service almost always touches all three. Do them in that order and you won't get stuck.
A drinking places business operates under one of the most closely regulated permission frameworks in the United States. At the federal level, you will need approval from the Alcohol and Tobacco Tax and Trade Bureau (TTB) before you can sell or serve alcoholic beverages commercially. At the state level, a retail liquor or beer-and-wine licence is issued by your state's alcoholic beverage control authority — the name and structure of that body varies by state. Many counties and municipalities layer on their own local permits covering zoning, occupancy, and hours of operation. Because holding the wrong licence, or serving before all approvals are in hand, can result in criminal exposure, confirm every requirement directly with the relevant issuing body before you take your first customer.
## Equip
Open a separate bank account for the business and run every dollar of food money through it. Mixing business and personal cash is the single most common thing that makes taxes a nightmare and makes it hard to see whether you're actually making money. Once you have your EIN and registration, this is quick. This week, call or visit a bank or credit union and ask what they need to open a business checking account — usually your EIN, your registration paperwork, and an ID. Get a debit card tied to it and use only that card for ingredients, equipment, and fees. When customers pay you, the money goes here first. This one habit turns a shoebox of receipts into records you can actually read at tax time.
The first money in a drinking places business goes to securing the physical space — lease deposits, first and last month's rent, and any required tenant improvements to meet code. Next comes the licence and permit process, which requires application fees and, in some states, the purchase or transfer of a licence from an existing holder, a cost that varies considerably by jurisdiction. After that, capital flows toward build-out: bar millwork, seating, lighting, sound systems, point-of-sale equipment, and refrigeration. Initial beverage inventory — spirits, beer, wine, and mixers — represents another significant outlay. Finally, working capital must cover payroll, utilities, and supplier invoices through the first months before cash flow stabilises. The range across all of these categories varies widely depending on location, concept, and facility condition.
Food service can hurt people and property in ways most businesses can't — food poisoning, kitchen fires, a customer who slips. Insurance is what keeps one bad day from ending your business and your savings. The common starting point is general liability coverage, and if you handle food you'll want product liability too. If you have any employees, most states require workers' compensation by law. If you use a vehicle for catering or a truck, you need commercial auto coverage — personal policies won't pay for business use. This week, call two or three insurance agents who work with restaurants or caterers, describe exactly what you do, and get quotes. Ask what a claim would actually cover. Landlords, venues, and event organisers will often ask for proof of insurance before they let you work.
A drinking places business draws from a broad supply network; the positions described here represent a starting point, not the full picture.
Your most essential supplier relationship is with beer and ale wholesalers Beer and Ale Wholesalers and wine and distilled beverage wholesalers Wine and Distilled Beverage Wholesalers. In most states these relationships are regulated — you may only purchase through licensed distributors, and those distributors are often tied to specific brands or territories. Beyond beverages, a bar that serves food or garnishes relies on general line grocery merchant wholesalers General Line Grocery Wholesalers for staples like mixers, snack items, and packaged goods. The full supplier set for a drinking places business also includes commercial equipment suppliers, chemical and cleaning product distributors, and fresh produce sources, depending on your menu and service style.
## Operate
Write down how you make your food and run your day, step by step, so it doesn't all live in your head. Recipes with exact amounts, how you prep, what temperature you cook and hold at, how you clean, how you take orders. This feels unnecessary when it's just you, but it's what lets you cook consistently when you're tired, train the first person you hire, and pass a health inspection. Food safety agencies expect you to control temperatures and cross-contamination, and written steps prove you do. This week, write out your top-selling item exactly, and a simple opening and closing checklist. Keep it somewhere you can update it. When something goes wrong, fix the written process, not just the one plate. That's how quality holds as you get busier.
Keep track of every dollar coming in and going out, from day one. You don't need to be an accountant — you need to know what you sold, what you spent on ingredients and supplies, and what's left. Good records tell you which dishes actually make money, prove your income at tax time, and show a lender or landlord that you're serious. Use simple bookkeeping software like QuickBooks, a spreadsheet, or even a dedicated notebook, as long as you update it weekly. This week, pick your methodand enter the last month of sales and expenses to get current. Save every receipt and match it to your bank account. An hour a week now saves you a panicked scramble later and keeps the tax office off your back.
Food service has taxes most people forget until they hurt. You'll likely collect sales tax on food and pass it to the state — that money is never yours, so set it aside the moment it comes in. As a business owner you also owe income tax and self-employment tax, and because no one withholds it for you, you generally pay estimated taxes through the year instead of once in spring. This week, open a separate savings account and start moving a set share of every sale into it for taxes, so the bill doesn't wipe you out. Talk to a tax preparer who knows restaurants — one conversation early can save you far more than it costs. Know which taxes you owe and when, and put the money aside before you're tempted to spend it.
The day you can't cook, serve, and clean alone is the day you need help — and how you bring someone on matters legally. A contractor runs their own business and works on their terms; an employee works under your direction, on your schedule, and comes with payroll taxes, workers' comp, and wage rules. Misclassifying an employee as a contractor to save money is a common mistake that gets expensive when caught. Food service leans heavily toward employees because you control the hours and the how. This week, if you're near needing help, write down exactly what tasks you'd hand off and how many hours. That tells you whether you need one part-timer or a real hire, and lets you plan the cost honestly before you're desperate.
## Grow
For a drinking places business, the first three sales almost always come from the same place: people who already know you or know someone who does. Your personal network — friends, former colleagues, neighbours — will fill the room on opening night if you invite them directly and make the occasion feel like an event worth attending.
The second source is the immediate neighbourhood. Residents and workers within walking distance are the most likely repeat customers in the early weeks. A soft-open period, where you invite small groups before your official launch, lets you work out service issues while building word of mouth among exactly the people who will become regulars.
The third source is local media and community listings — neighbourhood blogs, event calendars, and social platforms where people look for new places to go. A well-timed announcement tied to your opening week gives people outside your immediate circle a reason to show up before habit or reputation has had time to form.
Being findable online is how new customers decide to try you. Claim and fill out your free listing on Google Business Profile so you show up on maps with your hours, menu, and photos — this alone drives real foot traffic for food businesses. Do the same on Yelp and any local delivery or ordering platforms that fit your model. Then get verified where you can: confirmed hours, real photos of your actual food, and honest responses to reviews build the trust that makes strangers walk in. This week, claim your Google listing and add ten good photos of your food and space. Ask three happy customers to leave a review. Listings are free, they work while you sleep, and an unclaimed or empty one costs you customers you'll never know you lost.
Once you've run a few months, compare your numbers to what's normal in food service so you know whether you're healthy or bleeding. Food cost as a share of sales, labour cost, rent as a share of sales — there are published benchmarks for restaurants and caterers, and they tell you fast if something's off. If your ingredients eat far more of each sale than the typical range, your prices or your recipes need work. This week, pull your last three months from your bookkeeping, work out what share of sales went to food and to labour, and look up the industry ranges for your type of place. Don't guess whether you're doing well. Measure it against real figures, and you'll know exactly what to fix next.
Now that you're operating and you know your real numbers, write the plan you couldn't have written on day one. Not a fifty-page document — a few honest pages: what you sell, who buys it, what it costs to run, what you want to grow into, and what you need to get there. This is the thing a lender, a landlord, or a partner will ask to see, and writing it forces you to face the parts of your business you've been avoiding. Use a free template or a tool like LivePlan to structure it. This week, draft the one-page version: your offer, your customers, your monthly costs, and your goal for the next year. Update it as you learn. A written plan turns a busy kitchen into a business with a direction.
Starting this business? Get the printable one-page checklist for these 20 steps.
This is how to get started. If you want the whole thing — a plan with your numbers in it, benchmarked against federal figures for your industry, with the procedures for running it already written — that is what we build. A free template asks you to describe your customers. Ours names them.