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Karaoke Business

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How to Start a Karaoke Business

Written by: Howard Tillerman

Howard Tillerman is the Chief Marketing Officer for Step By Step Business and an award-winning marketing professional.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on August 18, 2021 Updated on June 5, 2024

Investment range

$4,000 - $40,000

Revenue potential

$325,000 - $2 million p.a.

Time to build

Profit potential

$80,000 - $500,000 p.a.

Industry trend

After disappearing during the darkest days of the pandemic, karaoke is coming back strong! The live singing activity provides great entertainment at restaurants, bars, clubs, special events, and even within people’s homes. So if you’re outgoing and love to sing, starting a karaoke business may be the right fit. You could bring smiles to people’s faces while making good money. 

Of course, to be successful, you’ll need to get the basics right from the start. Thankfully, you’ve come to the right place, as this step-by-step guide lays out all you need to know to develop and launch your karaoke business and turn it into a flourishing enterprise.

Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.

Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services .

Step 1: Decide if the Business is Right for You

Demand is always strong, so karaoke is a great business idea. But will it work for you? To answer this, you’ll want to focus on the nuts and bolts of the business. 

Pros and cons

Whether you’re starting a karaoke company as a side hustle or a full-time occupation, there are several pros and cons to consider.

• Low startup costs
• No need for an office
• Simple business model
• Strong word-of-mouth referrals
• High customer retention rate
• High overhead
• Work can be inconsistent
• Damaged equipment can be expensive to repair

Karaoke industry trends

After a sharp pandemic-driven downturn in 2020, market analyst IBISWorld expects increased consumer spending to return the US karaoke industry almost all the way back to pre-pandemic levels by the end of 2021.

Hope is growing that the sector will recover as the economy starts to open up and bars and clubs gear up to bring customers back, while more and more people welcome big groups of friends and loved ones into their homes again. 

Industry size and growth

• Industry size and past growth – Research firm Statista values the US karaoke bar industry at nearly $1.1 billion in 2021.(( https://www.statista.com/statistics/1176177/karaoke-bar-industry-market-size-us/ ))
• Growth forecast – Industry analyst Market Research Future expects the global karaoke industry to see steady 2% annual growth through 2030.(( https://www.marketresearchfuture.com/reports/karaoke-market-8034 ))
• Number of businesses – There are around 1,500 karaoke businesses in the US.(( https://www.statista.com/statistics/1178659/number-of-karaoke-bar-industry-businesses-us/ ))
• Number of people employed – The industry employs more than 14,000 people.(( https://www.ibisworld.com/united-states/market-research-reports/karaoke-bars-industry/ ))

Trends and challenges

Trends shaping the karaoke industry include:

• Adoption of contactless solutions such as customers requesting songs through their mobile devices
• Rise of low-alcohol drinks
• Outdoor karaoke as a precaution against infectious diseases

Challenges in the karaoke industry include:

• High cost of karaoke systems
• Rise of virtual musical activities

How much does it cost to start a karaoke business?

Starting a karaoke business can cost anywhere from $4,000 to $40,000, with an average of about $22,000.

The core of any karaoke service is equipment. Creating a delightful karaoke experience can be difficult without the right equipment. You’ll likely need the following equipment to get your karaoke business off the ground:

• Music player
• Wireless microphones
• Monitor with stand
• Sound mixer amplifiers
• Speakers and sound system
• Cases for all equipment
• Music library/songs playlist
• Tool kit and duct tape

Other than commercial space, most costs go toward buying equipment and marketing, as broken down below:

How much can you earn from a karaoke business?

The amount of money you can generate with a karaoke entertainment business depends on the type of karaoke business you’re operating, target customers, products, and services. According to IBISWorld, there are 1,540 registered karaoke bars in the United States, generating $1 billion in annual revenue, which translates to $650,000 per business. 

Standard karaoke bar

If you open a standard karaoke bar, you might be able to make half the industry’s annual average revenue in your first year of operation. Assuming the industry average 25% profit margin, you’d make more than $80,000 in profit. If you can reach the industry average of $650,000 in your second year, you’d take in a tidy profit of more than $160,000. You could open a few more branches by your third year and reach $2 million in revenue and half a million dollars in profit.

Mobile karaoke

If you decide, on the other hand, to start out as a mobile karaoke business, you would rent out your services to bars, clubs, parties, and special events, and have a much higher profit margin of about 60%. The average cost of a one-day, high-end karaoke machine rental, with amplifiers and special equipment, is about $200.

In your first year, with two machines, you might do 10 rentals per week, giving you $100,000 in annual revenue and more than $60,000 in profit. In your second year, you could add two more machines and rentals could double to 20 per week. You’d have to hire staff and buy the additional machines, reducing your profit margin to 40%. With annual revenue of nearly $210,000, you’d have a tidy profit of more than $80,000.

By your third year, you could expand your coverage, hire more people, and add 6 more machines, further increasing your rentals to 50 per week but decreasing your margin to 20%. With annual revenue of $520,000, you’d take in more than $100,000.

What barriers to entry are there?

The karaoke entertainment business has moderate barriers to entry. The main obstacles include:

• High operating expenses, especially in major metropolitan areas
• Frequent shutdowns due to lingering pandemic

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Step 2: hone your idea.

You now have a bird’s eye overview of the karaoke industry and have decided to pursue the business. The next step is about positioning your company to succeed. You can do this by answering the following questions:

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify the opportunity

The success of your karaoke business depends on your ability to explore and analyze opportunities and fill gaps your competitors fail to identify. Your quest to make inroads could begin by introducing your services to bars and clubs that don’t offer karaoke.

You might also stand out by offering innovative karaoke ideas, such as:

• Themed nights to appeal to hardcore karaoke fans
• Karaoke competitions to bring in new customers 
• Karaoke games such as “Guess This Song in Three Words” 
• Deals such as 1 free karaoke song with your first drink purchase 

What? Determine your services and offerings

Karaoke is a highly competitive business, so you’ll need to decide early which services your company will offer. That way, you can narrow down your target audience and stand out from other karaoke hosts in your area.

You might also consider:

• VIP karaoke rooms: A group of friends or colleagues rents out a small room to sing and drink in private 
• Backup vocalist: You could offer to sing as backup vocalist at a karaoke party or event 

How much should you charge?

Your fee will depend on the services you provide, the quality of equipment, and your overhead. Unless you offer private rooms, karaoke is usually free at karaoke bars, so in that case you will earn money from drinks and food. 

If a bar owner hires you to provide karaoke services, the standard rate is between $50 and $90 per hour. Most karaoke sessions last from about four hours, so you can charge $200 to $360 per session per night. For mobile services, prices will vary depending on the type of event, location, skill level, booking lengths, but with high-end equipment you should average about $200 per one-day rental. 

It’s important to consider your audience, overhead, and competitor pricing to determine the best prices for your karaoke business. Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Identifying your target market allows you to customize your product and services to your client’s needs, which leads to greater customer satisfaction. It also enables you to choose the proper marketing channels, use your resources more effectively, and maximize your profits.

The target market for a karaoke service includes:

• Revelers in bars and nightclubs
• Entertainment spots such as cruise liners and ski resorts
• Private parties

Where? Choose your karaoke location

Choosing a business location is a crucial step to the success of your karaoke company. Ideally, you’ll want to locate your karaoke business in an area with many bars and nightclubs . If there aren’t many karaoke bars in your area, you need to find out why. Is it because people aren’t karaoke fans? Or is it because would-be investors can’t see the opportunity?

You can find commercial space to rent in your area on Craigslist , Crexi , and Commercial Cafe . When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Karaoke Bar Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• The name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “karaoke” or “singing”, boosts SEO
• Choose a name that allows for expansion: “Sing It Loud Karaoke” over “Hip Hop Karaoke” or “Private Karaoke Parties”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Karaoke Bar Business Plan

Here are the key components of a business plan:

• Executive Summary: A brief overview of your business plan, highlighting its key points and objectives.
• Business Overview: An introduction to your karaoke business, including its name, location, and a general description of what it offers.
• Product and Services: Details about the specific karaoke services you provide, such as room rentals, song selection, and any additional offerings like food and beverages.
• Market Analysis: An assessment of the karaoke market in your target area, including customer demographics, demand, and trends.
• Competitive Analysis: Information about your competitors in the local karaoke industry, their strengths and weaknesses, and how your business will differentiate itself.
• Sales and Marketing: Your strategies for attracting and retaining customers, including advertising, promotions, and pricing.
• Management Team: A list of key individuals responsible for running the business and their relevant experience.
• Operations Plan: Details on how your karaoke business will run day-to-day, including staffing, equipment, and operational processes.
• Financial Plan: Projections of revenue, expenses, and profitability for your karaoke business, including startup costs and funding requirements.
• Appendix: Supplementary materials, such as resumes, legal documents, or additional data that supports your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to karaoke. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your karaoke business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.

Form Your LLC

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans : This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans : The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants : A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital : Offer potential investors an ownership stake in exchange for funds, keeping in mind that you would be sacrificing some control over your business.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding a karaoke business. You might also try crowdfunding if you have an innovative concept.

Step 8: Apply for Business Licenses and Permits

Starting a karaoke business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your karaoke business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You could use karaoke apps, such as Singa , KaraFun Player , and Karaoke Builder Player to build massive playlists and add animated backgrounds to songs, while software like Boomset and Whova can help manage your events. 

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Here are some powerful marketing strategies for your future business:

• Professional Branding — Cultivate a fun and exciting brand image with a vibrant logo, engaging signage, and lively interior design for your karaoke venue.
• Website Optimization — Develop a website that displays your karaoke venue, song selections, booking options, and promotions, optimized to rank in local searches related to entertainment and nightlife.
• Local SEO  — Regularly update your Google My Business and Yelp profiles to strengthen your local search presence.
• Direct Outreach — Collaborate with local businesses, colleges, and tourist attractions to offer group discounts and host special events to attract diverse clientele.
• Social Media Engagement — Leverage platforms like Instagram, TikTok, and Facebook to share the vibrant atmosphere of your venue, customer performances, and promote themed nights.
• Content Marketing — Manage an entertainment blog with posts about music trends, karaoke tips, and event highlights to engage your audience.
• Email Newsletters — Regularly inform subscribers about new songs, upcoming events, and exclusive deals to keep them connected and engaged.
• Video Content — Produce videos featuring karaoke night highlights, customer testimonials, and virtual tours of your venue to entice new visitors.
• Experiential Marketing — Host themed karaoke nights and contests, collaborating with local musicians and DJs to enhance the entertainment value and attract large crowds.
• Local Collaborations — Forge partnerships with nearby restaurants and entertainment venues for cross-promotions and combined service offerings.
• Loyalty Rewards Program — Offer perks like priority song selection or booking discounts to loyal customers to encourage repeat visits.
• Influencer Collaborations — Partner with local influencers or entertainers to promote your venue, expanding your reach within the community.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your karaoke business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your karaoke business could be:

• Your voice will sound better in our top-of-the-line karaoke equipment
• No entrance fee, and free karaoke! 
• High-end, private karaoke rooms for VIPs
• Get half-price drinks/rentals with our loyalty program

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a karaoke business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in karaoke bars for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in karaoke. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Step 12: Build your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a karaoke business would include:

• Servers — to take care of bar/club customers 
• Maintenance — to service and maintain your karaoke machines
• General Manager — to oversee operations, hiring, scheduling 
• Marking Lead — SEO strategy, social media marketing 

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.  

Step 13: Run a Karaoke Business – Start Making Money!

You’re now ready to embark on your entrepreneurial journey and turn your karaoke system into a profit-making machine. If you’re looking to open a karaoke bar, location is extremely important. You should operate in an area with high foot traffic or near restaurants and entertainment establishments. If you’re going mobile, having durable equipment is crucial. 

Either way, it’s important to offer the latest technology in the karaoke business, such as the use of mobile phones in choosing the songs or ordering food and drinks. You should have the latest songs too. Now, you’re ready to start making mad karaoke money! Good luck!

• Karaoke Business FAQs

You can make a good karaoke DJ if you’re a music enthusiast and can sing. Buy the necessary karaoke equipment, get your playlist ready, marketing your services, and you’re good to go.

To stand out in the karaoke market, offer unique and diverse song selections, create a welcoming atmosphere, provide exceptional customer service, and collaborate with local businesses. You can also host theme nights, contests, or live music events, and invest in high-quality sound and lighting equipment.

The gross income for a karaoke host is $18,000 to $43,000 per year, according to Glassdoor . Even so, you can expect to generate $50,000 to $150,000 per year as a self-employed karaoke host.

Some of the factors that can determine the success of your karaoke bar include the general ambiance of your space. Your bar should be clean, inviting, and comfortable. On top of that, you need to pay your staff well to keep them motivated.

While a karaoke room doesn’t have to be fancy, be sure to install state-of-the-art equipment, including a display screen, a mixer, a karaoke system, and enough four microphones to provide an excellent experience.

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• Decide if the Business is Right for You
• Hone Your Idea
• Brainstorm a Karaoke Bar Name
• Create a Karaoke Bar Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Business Licenses and Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build your Team
• Run a Karaoke Business - Start Making Money!

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Step By Step Guide To Write A Bar Business Plan

Opening a new bar requires grit and determination - as well as a fantastic bar business plan to act as your roadmap. This document can determine the future success of your new venture, so it’s essential to make it as comprehensive as possible.

But for first-time bar owners, figuring out where to start can be challenging. Our step-by-step guide to writing a business plan will help you pinpoint the finer details to consider when building a thriving bar business.

How to Write a Bar Business Plan in 9 Steps

1. bar overview.

The first step in writing a bar business plan is to establish an overview of the type of bar you want to open. You need a concept and location to shape your business model and create an executive summary for your new venture:

One of the defining aspects of your establishment is its concept and theme, which you’ll need to describe clearly in your business plan. Whether it’s a simple sports bar, speakeasy, or high-end nightclub, have a fully developed idea of what your venue will be and what purpose it will serve.

You also need to consider how to meet market needs. If you’re following trending concepts, you’ll know that roof-top bars and lounges are popular now. Or, perhaps you want your venue to be an activity-based bar that offers an art gallery, board games, or mini-golf?  

Part of your business plan also includes setting your mission statement and goals. These should outline your vision and will influence who invests in your bar. Your mission statement should be a comprehensive statement that details what sets you apart from other bars and should include your company’s values.

It’s important to link your statement to your business concept. You should consider how your values and goals are influenced by what makes your bar unique - including your overall purpose.

Next, you need to propose a location for your bar. Venues close to stores, shopping, centers, and tourist attractions, typically get good visibility and attract a lot of foot traffic. Because of the number of people moving through these areas daily, they also usually offer a decent level of security for your customers.

Another consideration for location is to avoid suburban areas where neighbors might lodge noise complaints. Should this happen, it can mean regulations stipulate earlier closing times for your venue so as not to disturb the peace.  

Finally, look for a space where there’s low competition, and your business can shine. There are plenty of strips crowded with bars and nightclubs. While these might attract a decent amount of foot traffic, you’ll need to work much harder to draw people into your place if one establishment has already made a name for itself.

For this reason, aim to secure a spot with little competition. It could mean having a unique concept bar that overshadows the competition. Or it could mean selecting a space where your type of bar doesn’t yet exist.

Ease of Accessibility

Potential customers need to be able to access your bar easily, or they will go elsewhere. They might drive, take public transport, or use a ridesharing company to travel to your venue. It’s up to you to ensure there are ways and means to get them conveniently to the front door.

Here, you should be looking for a venue where you can offer parking to your patrons. It should also be accessible to ride-hailing services and close to public transport.

2. Customer Overview

No bar establishment would be successful without its customers. As part of your bar business plan, include a profile of the type of customer you hope to attract. Consider who your target market is and how it aligns with your bar concept.

You should also outline your demographic's age, income, and interests. You’ll need this information later when developing marketing strategies for your business.  

3. Management Overview

The next step in your bar business plan is building a team structure. Your crafty bar concept requires talented people to execute it properly.

Your bartenders are the face of your establishment. Essentially, they can make or break your customer’s impression of your venue. When going through the hiring process, you’ll need to consider each individual’s personality, qualifications, experience, and skills.

Ideally, you want at least one experienced bartender who knows the ropes and can help set up operations, deal with bar management, and train the team. They will also be able to help streamline any teething issues that come up as a result of starting a new business.

From the get-go, outline your bartending teams’ possible responsibilities and the duties they’ll need to undertake. This can help set expectations ahead of advertising jobs and interviewing potential candidates.

Bar-backs don’t need as much experience as bartenders or servers as they aren’t in the customer eye as much. But they must be willing and eager to learn. They are essential to keeping everything running smoothly and work closely with the bartender as an assistant.

For this reason, they need a solid foundational knowledge of the industry, ingredients, and barware in general.

Depending on your business concept and operational model, you may or may not need to employ servers. Some high-end venues have servers to reduce the crowd around the bar and deliver drinks to the table. Additionally, you’ll need to hire servers if you offer any food.

When building out your staffing plan, you’ll need to determine where your establishment lands with that requirement. Make a note here to look for bar industry candidates with alcohol training who know how to serve alcohol safely and legally.

4. Drinks Menu Plan

Your drinks menu is your bar’s product. To be successful, it’s essential to get this offering right.

While your beverage list will undoubtedly change over time, don’t neglect to include a sample menu in your business plan. This will give potential investors an idea of what’s in store and possibly help you secure funding.

Descriptions

Your drinks menu is the selling point of your bar business and the star of the show. If you can excite and entice patrons with promises of wonderful flavors, you’ll be onto a gold mine.

So, it’s important to include product descriptions in your menu, particularly for signature drinks. Each listing should detail the ingredients of individual drinks, any garnishes they may come with, and add-ons your customers can choose from.

Beverage Names

A successful bar is only as strong as its product. So, aligning your drinks with your bar’s brand and concept is important. Get together with a mixologist to create one or several signature drinks that will be uniquely your own. Give these drinks names that play to the overall theme of your business.

Product Sourcing

Many establishments lean on particular products as their claim to fame. For example, you might want to be known as a French wine bistro, local brewery, or craft cocktail spot. Decide what you wish your unique story to be and reflect this in your plan for product sourcing.

Of course, sourcing locally is the most sustainable way to go. You can also build relationships with vendors in your community, which can help bring people into your venue.  

Industry Trends

It’s essential to do your research and stay abreast of industry trends. Note what these are in your business plan, as this will help keep customers walking through your doors.

For example, one of the most popular cocktail trends in the bar scene is smoke-infused or smoked cocktails. Some mixologists may also use smoke bubbles to infuse the cocktail with a smoky aroma. This trend has gained fame in the last few years and adds a new twist to the cocktail-drinking experience.

Small Food Menu (Small Bites)

Food and beverages go hand in hand. If you plan a small menu with, say, tapas or easy eats, you can increase your revenue. It will prevent your guests from leaving to find something to eat.

Suppose you don’t want the hassle of food storage and preparation. In that case, consider formulating a partnership with a local eatery or small food business that can deliver a menu of select freshly-made items to your establishment.

5. Licenses

It’s key to plan out your business licenses carefully. If you don’t have the right ones in place, you won’t be able to operate.

Tavern License

When putting together your bar business plan, it’s important to research whether you need a tavern license. It’s a government-issued license for restaurants, bars, or businesses with more than 50% liquor sales.  

Beer and Wine License

If you’re planning on starting a beerhouse or wine lounge, you may only need to apply for a beer and wine license. This will restrict your sales to wine and malt beverages, as you won’t be able to sell hard liquors like spirits. Whether you need to apply for this license depends on your bar's concept.

Health/Food Service License

With a small food menu, you’ll likely need to note on your restaurant and bar business plan to apply for a food service license. It’s a requirement to serve any type of food within your establishment. To obtain a food service license, you’ll need to ensure that your bar follows strict rules and regulations laid out by the U.S. Food and Drug Administration .

Music License

Music is one of the key elements of creating ambiance in a venue. But did you know that streaming music from your digital subscription with Spotify or Deezer is not actually operating within the law? This is true even if you’re playing music through a TV or radio.

The right way to go about this is to pay a Performance Rights Organization (PRO) or music service that will send royalties to the relevant artists. For the most part, this doesn’t apply to bands or performers who play live at your venue.

6. Market Research

Performing market research as part of your bar business plan is key to understanding your opportunities and how to capitalize on them.  

Industry Research

Part of your research should be to determine the market size you can potentially snag. Look at other bars already operating in the area, consider the industry as a whole, and determine what trends are driving it forward.  

Target Market

What needs will your bar solve for your target market? You can find out who they are and what they want by considering the local neighborhood and bar type.

It’s also an idea to look at census data to see how many potential customers within a certain demographic live within a reachable radius of your proposed location.

Market Share and Price Point

When doing your market analysis, consider similar bar businesses that have come before you. What do their successes and failures look like? Why did they crash and burn, or soar to new heights? Take these lessons and figure out how to apply them so your business can succeed.

Furthermore, what will your entry into the market mean for the local community? Are you creating new job opportunities? Or are you going to bring in an unruly crowd of patrons they hope to avoid? Knowing this information will help you be accepted and create connections rather than catastrophes.

Lastly, consider what your ‘competitors’ or other similar industry businesses are charging for their drinks and services. Run a competitive analysis in the area to determine your potential price point and how you can stand out.

7. Bar Marketing

Utilizing a marketing plan in the right way helps you take measured steps to get your establishment in front of potential customers. Here are the strategies to get started:

Create a Brand

The key to starting a successful business - and keeping it open - is to create a memorable brand identity. Your toolbox for promoting your brand should include your logo, colors, and ‘personality.’ Use these in a way that becomes synonymous with your bar, no matter where people interact with it.

Marketing Tools

Besides developing your brand identity, consider the channels you can market on to attract customers. At the very least, it should include your social channels, website, and media influencers.

8. Other Avenues to Increase Revenue

Besides being a bar and welcoming guests who come in with reservations or foot traffic, there are other avenues to increase your revenue.

Hosting events such as karaoke nights, wine tastings, or live music is an excellent way to attract larger crowds to your bar. You are guaranteed certain sales, can charge a cover fee, and get new people walking through the door.

If you go this route, we recommend using event management software to keep everything on track and work effortlessly with your team.

It’s no surprise that all businesses go through an ebb and flow of customer traffic. A great way to increase cash flow during slower periods is to introduce ideas like drink specials and happy hour discounts.

When you’re writing up a business plan, don’t forget to brainstorm ideas for a pre-opening promotion as a way to test the market. This can be as simple as a soft launch or as elaborate as a grand-opening celebration.

9. Financials

An important aspect of your business plan is to outline your potential start-up costs. These, along with the costs of day-to-day business operations, and financial projections, will attract or deter potential investors.

Your business plan should also highlight possible funding options like loans and investment opportunities you have available. Additionally, you’ll need to draw up a break-even analysis to determine how much revenue it will take to turn profits.  

Realizing your dream of owning the hottest bar in town starts with a great business plan. It will need to cover everything from your mission statement to your concept and drinks menu. This will help you build a sturdy management team, hire great employees, and attract people to your venue.

Want to know more about Perfect Venue for event management? Try it free to find out how it can be a fit for your new business.

Have thoughts on the article? Feel free to email us at [email protected] - we'd love to hear it!

How to write a Bar Business Plan: Complete Guide

• January 3, 2023
• Food & Beverage

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your bar, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in your bar business plan. Use this template to create a complete, clear and solid business plan that get you funded.

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors may lose interest.

Why do you need a business plan for a bar?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or private grant

How to write your bar business plan’s executive summary?

Provide a precise and high-level summary of every section that you have included in your bar business plan. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately. Ensure that the executive summary doesn’t exceed 2 pages in total.

The executive summary usually consists of the five major sub-sections that include:

• Business overview : introduce your bar and provide a brief of the products and services you will offer. For instance, it may be a sports bar, a social hub, a music venue, or something else. Also mention the number of customers your bar can host at once.
• Market overview : the market overview section will contain an overview of the expected market size and growth of the bar industry in your area as well as your target audience and its demographics. Another important part of any market overview is a clear and thorough analysis of your competitors
• People : introduce your bar’s management and employee structure. Provide a brief (no more than a couple of sentences each) of the knowledge and experience of the team. Also, speak about your hiring plans: who will you hire and who will report to whom?
• Financial plan : how much profit and revenue do you expect in the next 5 years? When will you reach break-even point and start making profits? Include here your key financials such as revenue, gross profits, and net profit
• Funding ask : what loan/investment/grant are you seeking? How much do you need? How long will this last?

Bar Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Bar Business Overview

This is the section of your bar business plan where you properly introduce your bar and its business model.

Here is a sample list of questions that you must try to answer in this section:

• What is the rationale behind the bar?
• What’s the bar’s location and why did you select that location?
• Why did you select the type of bar you want to open?
• What will be the products and services you will offer?
• What will be your pricing strategy and why?
• Will your operating hours be the same as your competitors?
• Who is your target audience?
• How many customers can you serve at once (capacity)?
• What will be the legal structure of your company?

a) History of the Project

Here you should explain the background of your project, more importantly:

• The passion & experience of the business owner for the bar industry
• The rationale behind the business: why did you decide to create a bar today?

Passion & Experience

You may or may not have prior experience. If you have experience, speak about it and how it will help you to run your business. For instance, you may have been a senior manager in a bar for say 5 years, and now you want to start your own bar and use your knowledge to run it more efficiently.

However, if you don’t already have experience, that’s fine. You must demonstrate your passion and some industry knowledge (you may have conducted thorough research).

Is there a certain problem (or perhaps, a set of problems) that your bar will try to solve when it comes into existence? For example, there may not be any sports bar in your area where sports enthusiasts can enjoy sports on a big screen while enjoying drinks and food.

But that’s not all! The market must be suitable for a business to exist and thrive. For instance, if the area has a high rate of hooliganism and vandalism, opening a bar in the area might not be a good idea. Similarly, if the population of the target market has a high percentage of under-aged people and non-drinkers, you may not receive enough customers to keep the bar profitable.

b) Business Model

This sub-section of the Business Overview will explain your business model. Describe the following points briefly:

• Will you buy an existing bar and do some remodeling, or will you start a new bar and design it from scratch?
• The type of bar you want to open and why

What are the different types of bars?

There are multiple types of bars. Some of them that you may consider include, but are not limited to:

• Specialty Bar: They specialize in one or two things. For instance, it can be a Martini Bar or a Cigar Bar. If you decide to open a Martini Bar, expect to have more women customers since the drink is popular among women. Again, a Cigar Bar will attract people who want to enjoy a smoke while drinking
• Sports Bar: This is a type of bar that will televise sporting events continuously on a big TV screen. Usually, these bars remain crowded, and the male species will usually flock to these bars. Things can get raunchy and drunk men can pick up fights.
• College Bar: This type of bar attracts the college crowd – people who have just turned 21. With drinking becoming legal for them, you can expect people to have lots of fun and order a lot of booze. Sorority girls, frat boys, cheerleading squad, football team – you will find them all. But they aren’t among the most responsible drinkers. So, expect some mess
• Concept/Cocktail Bar: These bars are specially for people with big spending capacity. Usually, the bars have something unique to offer and often attract tourists. For example, you may consider an open-air rooftop bar offering a sweeping view of the city. These bars are more about expensive thrills and new trends, and they often tend to be very extravagant
• Irish Pub: They specialize in offering alcoholic drinks that come straight from Ireland. Usually, they have a great ambiance, and they are perfect for relaxation and de-stressing. They have that typical Irish feel complete with decorations and pleasant music

There are many more types of bars that you may consider. However, remember that the bar you are opening must have a high percentage of the target audience. For instance, if you are located in an area popular for expensive tourism, a Cocktail Bar Bar may be a better choice.

c) Products

Of course, the products you will offer in your bar will depend on the type of bar you are opening.

Here, you should provide an overview of the products you are selling, drinks and/or food. Whilst it’s always good to add details, keep the detailed menu for the appendix instead.

Instead, explain here what are the main products you will sell (if you’re specializing in specific drinks for example) which shall tie into how you differentiate yourself vs. competitors later (see Market Overview ).

d) Pricing Strategy

In this sub-section, you must explain the pricing strategy of your bar. If you have multiple competitors in the vicinity, you cannot have huge pricing variation, especially for the drinks. Pricing will, of course, depend on the type of bar you are opening. 

For instance, if you are going for a College Bar with a major focus on beers, you will most likely charge the standard beer rates. However, if you are offering additional entertainment services, you can charge for that, too.

Similarly, you cannot expect to charge super high like the concept bars if you are opening a Sports Bar. Yes, there can be significant price variations in the food that you are offering.

Create a pricing chart and ensure to provide an average price range for your products. You don’t need to provide exact pricing for each product. For example, if you are selling beer, you don’t need to list each beer brand and its price. You can just use a range instead (e.g. $6 to $9 for a pint).

Adding prices to your bar business plan is very important: it will allow investors to tie your pricing strategy with your financial projections later on (see Financial Plan ).

e) Legal Structure

Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Bar Market Overview

A complete understanding of the market where you want to operate is important for the success of your business.

For example, if you intend to open an Irish Pub in an area teeming with a college crowd, that will be a foolish choice. Similarly, if you want to open a Nostalgia Bar and try to attract a music-loving crowd, it will not work.

Only when you understand your target audience and weave your service offerings according to their needs, you will succeed.

Therefore, you must cover 3 important areas in the market overview or market analysis section of your bar business plan:

• Bar industry status quo : how big is the bar industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
• Competition overview : how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
• Customer analysis : who is your target audience? What type of bars do they prefer? How regularly do they drink? What type of drinks do they prefer? How much do they spend at bars every month?

a) Bar Industry Status Quo

How big is the bar industry in the us.

The US bar industry is estimated to be at $26.7bn in 2022 , and it registered a growth of 16.4% in 2022. The primary factor driving the growth is the increased per capita expenditure on alcohol. Also, there are approximately 71,634 bars and nightclubs in the country.

How big is the bar industry in your area?

Once you provide the overall picture of the US, divert your attention to the area where you want to operate.

Yet, it might not be possible to find region or area-specific numbers online. In such case, you must estimate the size yourself. Read our article on how to estimate TAM, SAM and SOM for your startup.

For example, if there are 71,634 bars and nightclubs in the country with total annual revenue of $26.7bn, the average annual revenue for each establishment is $372,728. Therefore, if the area where you want to open your bar has 30 operational establishments, you can safely assume that the bar industry in your area is worth approximately $11.2 million.

How fast is the bar industry growing in the area?

You must show the expected growth rate of the bar industry in your area. This information may not be available via online research papers. However, assessing the growth rate will not be difficult.

You can approach each bar separately and ask for their year of establishment. You will get a clear picture of the overall growth rate. For instance, if there were 20 bars in 2018 and 30 bars in 2022, the average annual growth rate is 11%.

What are the current bar market trends in your area?

It is vital to understand the trends of the bar industry in your area. Understanding trends will allow you to devise marketing strategies.

Understanding trends won’t be easy. You must conduct research and talk with your target audience. Additionally, you must also study your competitors to understand their target audience, the products they sell, etc.

Some common questions you may ask the target audience include:

• What type of bars do they prefer?
• At what time of the day do they prefer to visit a bar?
• How frequently do they visit bars?
• What type of drinks and food do they usually order?

You can ask as many questions as you need to understand the evolving trends.

b) Competition Overview

Studying your competitors’ business models is vital. You need to understand what makes them successful or why they fail. A clear understanding of their products and services, marketing strategies, etc., will allow you to provide a better service.

If your competitors are offering nearly the same products & services, then what is their market share and how do they market their products & services to attract new customers?

It is always a good idea to do some research (if necessary, physically visit your competitors without revealing your business intentions) and create a comparative table summarizing their product & service offerings, marketing strategies, target audience, etc.

Here is a sample table that you can use as a reference:

Bar SWOT Analysis

Try to provide a SWOT analysis as part of your competitor analysis too. It must be crisp and highly focused. SWOT stands for Strength, Weakness, Opportunities, and Threats.

Here is a sample that you can use as a reference:

• Strengths : 8 years of experience bartender experience and 6 years of senior management experience in a reputed bar, experienced staff with a minimum of 4 years of experience
• Weaknesses : Startup cost, no initial brand reputation
• Opportunities : A massive campus crowd of legal drinking age, no college bar catering to the specific needs of the campus crowd
• Threats : Increasing rent due to increased demand for commercial spaces, a high street brand will start operations shortly

A clear understanding of your strengths and weakness along with opportunities and threats in the real market can help you to design your marketing strategy . It also helps potential investors to assess the risk and reward profile of your business.

c) Customer Analysis

This is the sub-section where you will provide a detailed analysis of your target audience. You will expand the data points your provided earlier in the Business Overview segment.

Some important points that you must include in your customer analysis include:

• Age and gender distribution (you can get local demographic data from census.gov )
• Per capita expenditure on alcohol
• Frequency of bar visits
• Average monthly income and disposable income
• Average bill size per visit
• Average yearly or monthly spending on alcohol and food at bars
• Type of bars preferred
• The expected price range for drinks and food
• Inclination towards loyalty programs & free perks
• Things they dislike about existing bars and what they expect to be improved

You can add as many data points as required to validate your business decision. The idea here is to display your deep understanding of the target audience and the needs, preferences, and expectations. This knowledge can help you to tailor your products & services to attract new customers.

4. Bar Sales & Marketing

This is the segment where you outline your customer acquisition strategy. Try to answer the following questions:

• What are the different marketing strategies you will use?
• How do you intend to track the success of your marketing strategy?
• What is your CAC or customer acquisition cost?
• What are your USPs?
• What is your marketing budget?
• What promos and offers do you intend to provide for attracting new customers?

Let’s expand a bit on a few questions below:

What marketing channels do bars use?

A few marketing channels that bars typically use are:

• Content marketing (share content like best foods that pair with beer, wine, whiskey, rum, and vodka; how to make crystal clear ice balls or cubes at home, etc.) on platforms like blogs, social media, etc.
• Word of mouth
• Local listing
• Instagram/Facebook ads, etc.

It is not necessary to use all channels. You can start by focusing on a few of them. You can include other marketing strategies later.

Also, you must have a fair and nearly accurate estimate of your marketing budget. Failure to display a well-planned and adequate cash flow for advertising and marketing can lead to investors losing confidence.

What are your Unique Selling Propositions (USPs)?

In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.

A few examples of USPs are:

• Happy Hours : Enjoy a 30% discount on all drinks at food between 2 PM and 4 PM
• Free Drinks : 2 drinks on the house for bills above $200
• Price Match : Find a bar with a lower price for the same drinks and we will match the price

Your USP will depend on your business model, competitor analysis, and target audience. Whatever your USP be, it should appeal to your potential customers and attract them. Plus, The USP you offer should be convincing enough for investors and lenders.

5. Management & Organizational Structure

You must address 2 things here:

• The management team and their experience/track record
• The organizational structure: different team members and who reports to whom?

a) Management

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your bar business.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.

It is also important that you explain how their experiences and qualifications help you in implementing the bar you are proposing. If they have specialized training and education (such as business management, bartender certification, etc.), add that information.

b) Organizational Structure

Even if you haven’t already hired a senior manager, bartender, waitress or waiter, barback, security guard & bouncer, and other relevant staff members, you must provide a flowchart of the organizational structure defining the hierarchy of reporting.

Such a flowchart will demonstrate your management skills and plans to the interested investors or lenders. If necessary, they may even suggest changes to improve the management structure.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any bar business plan.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your bar is an attractive investment.

There should be 2 sections to your financial plan section:

• The startup costs of your project (if you plan to start a new bar, purchase new equipment, renovate your bar, etc.)
• The 5-year financial projections

a) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a bar, startup costs are all the expenses you incur before you open your bar and starting making sales. These expenses typically are:

• The renovation / refurbishment of the building / space
• Equipment & furniture
• Initial inventory
• Licenses & permits

As an example, it costs on average $148,500 to $239,000 to open a hard liquor bar with 80 seats in a premium location.

Note that these costs are for illustrative purposes and may not be fully relevant for your business. For more information on how much it costs to open and run a bar, read our article here .

b) Financial Projections

In addition to startup costs, you will now need to build a solid 5-year financial model for your bar.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in the business plan of your bar.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 20%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of customers over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of customers as a small change in these assumptions will have a big impact on your revenues.

7. Funding Ask

This is the last section of your bar business plan. Now that we have explained what your bar is about, the products you sell and to whom, what’s your strategy, where you go and how you get there, this section must answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

• What percentage of the total funding the loan represents?
• What is the corresponding Debt Service Coverage Ratio ?

If you raise equity

• What percentage ownership are you selling as part of this funding round?
• What is the corresponding valuation of your business?

Use of Funds

Any bar business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment in paying your employees’ salaries? Or will it cover mostly the cost for the lease deposit and the renovation?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our Bar financial model template , you won’t have any issues answering these questions.

For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

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• May 7, 2023

How To Build A Financial Model For a Bar

Privacy overview.

How to open a private room karaoke bar — hands-on guide with 10 steps

by Silja Niemi , Jens-Antti Andersen

Are you looking for guidance on how to open a private room karaoke bar? We are here to share a helping hand! In this article we'll provide useful insights and information of the steps you need to take to start a karaoke business. You'll find here our 10 step list on how to start karaoke business, with practical steps to help you start your karaoke room business — from business plan to pressing play! And as this article focuses on karaoke room business, we also wrote one about how to open your own bar , so make sure to check that too. If you want more reasons to start your karaoke room business, read here why karaoke is a great idea .

Note that this article is not a legal advise, but a general overview of starting a karaoke room business! For details and specific criteria for opening your business, please consult your local authorities.

Start a private room karaoke bar by following these 10 steps:

1. Make a business plan — investments, operating expenses, profit estimates

When getting started with a karaoke room business, or considering how to open a karaoke bar, you need to plan your business — just like when starting any type of a venture. For business plan guidelines and templates, navigate for example here .

To figure out the starting cost, operating costs, your break even point, and in what terms you'll be able to make profit with your business, you need to detail it all out, run some calculations and scenarios. You might want to look for prospective spaces and their rents, benchmark some competitors, and count in all your necessary purchases in order to make educated forecasts about your business. To estimate and benchmark your costs and revenue streams, download our free karaoke room business guide !

To make some calculations about your karaoke room you can see some averages on Singa powered venues below. Of course, it depends on your city, location, target audience, your marketing etc. You can use our room price calculator below!

Do you need external funding or business partners?

When your business plan is advancing, you will need to consider your financing and starting costs. For funding your business, there are more opportunities, in case you don't have all the money ready in your bank account. For example, you might want to talk to potential investors, consider bank loans, governmental entrepreneur support funding, or getting business partners onboard.  

2. Define and decide your concept

So, you've decided to open a karaoke bar or a karaoke room venue. What else you need to think? You need a concept for your venue — what's your vibe and who's the audience for your venue. This is also dependent on the neighborhood you're planning to open in, so do your research on potential spaces, neighborhoods, and existing bars. Find your sweet spot and something to make you stand out from competitors! Our customers include for example Vietnamese bistro with karaoke rooms as well as bowling alley with karaoke rooms.

Maybe put together an ideation workshop on your own or with your potential business partners and put your creativity in action to define your concept. To define your business, you can include for example:

• Name: an important and obvious one. What will your venue be called? That'll be the usual suspect of what people know/remember of your bar. So make it a good one. To get some ideas, why not try some bar name generators online or a random word generators!
• Pitch: If you'd have to explain your karaoke bar in few sentences, what would those be? You can also use your pitch as a tagline in your website, instagram, flyers etc. Make it stand out!
• Target Audience: eventually, who will your audience be? Is your karaoke bar targeted to young, hipster folks, hardcore karaoke enthusiasts, or above-median income business groups — or something else? It can help your planning to define your primary target visitors. ( Obviously , they are karaoke singers!)

3. Find the perfect space

One of the most crucial decisions of your private karaoke room bar is the space itself. Maybe you started your planning with spotting a perfect available space, but in case you haven't found your desired spot yet, you'll want to make the right decision. Venue will be one of your big monthly costs, and it'll determine the framework to your operations. Obviously, you can renovate, decorate and style your venue, but some things you cant change are clearly;

Size: How many rooms you want to operate? Are you opening an intimate karaoke bar, or a party karaoke hub? Do you need a proper kitchen, terrace, dancefloor?

Based on our k araoke room business guide the typical karaoke room size is 12-15 m2. The number of rooms can be anything between 1 and a dozen, depending on if you're planning to open karaoke room focused business, or a bar with karaoke room as an additional benefit.

Location: Central, neighborhood gem, nightlife hotspot? Where your bar is located will play a major role in how your customers will find it. Do your research, ask around — just know where to go.

4. Register your business, get licenses, permits, trademarks!

To open a business, there will be a lot of paperwork to do — and it's not always the easy part. Especially when opening a business that includes selling alcohol, having visitors, and staying open late, you want to make sure that you have done everything by the book, and you have all necessary permits and licenses to run your business.

Note that getting all paperwork done can take a while, so make sure to start well ahead your planned opening! It might be a good decision to hire a lawyer and accountant to make sure everything is covered and correctly executed.

The necessary paperwork depends on the country and state you're operating in, so please check the necessary steps from your local authorities! But some general things to take into account:

• Register your business
• Get all necessary insurances (property, staff, liability, etc.)
• Taxes and accounting
• Permits for alcohol, opening hours, public music playing

5. Get the best karaoke content

The obvious thing to consider when digging into how to start karaoke room business — karaoke itself! When karaoke is used in a commercial and public display, you need to make sure to have fully licensed karaoke for this type of use. Luckily, there are karaoke providers that have made sure to get the licensed content easily available for you.

To get the best professional karaoke software out there, you should check Singa Business —  the go-to resource for bars, nightclubs, restaurants, bowling alleys, you name it. It is ideal for any venues that are looking to enhance their experience with flexible karaoke software. Singa Business is an iPad software with constantly updating karaoke catalogue, from old karaoke classics, to new hits. Singa Business has a spesific karaoke room feature — Karaoke Box Mode — that enables you to manage easily all your rooms and bookings. See the video below for more info!

With Singa, you'll also have background music on hand, that you can use to play music even though you would not be running karaoke.

👉 Contact us to get more info and prices for Singa Business for karaoke rooms ! Read also our comparison of 5 best karaoke hosting software to get an overview or some options in the market!

6. Get the equipment!

Before you can move towards opening your venue, there is obviously various kind of equipment you will need. Starting from the obvious: you need furniture — but let's go in more detail with that in the next point.

When you are opening a karaoke bar, you need to make sure to have a PA system for each karaoke room. Don't worry — it doesn't need to be a massive, high-end pricy set-up, but you can get started with quite a light karaoke gear for your karaoke rooms. Just make sure you have some good microphones, a screen, a small mixer and speakers, plus the device where you'll be streaming the karaoke from. Read here all you need to know about professional karaoke equipment . If you plan to book DJ's, you can usually use the same PA system of course!

But here's some things listed that you might need to purchase or rent. You can also consider some partnerships or sponsorship deals with different brands!

• Drinks: from alcohol to no alcohol. Depending on your concept, you might not neer a massive variety of different type of drinks, if you know your audience and/or focus on spesific drinks. Eg. local brewery beers, with some classic coctails. Or natural wines, and tap beers. Or maybe you are an all-in venue with list to cater all needs. Your call!
• Catering/kitchen equipment: such as glasses, plates, knives, forks, bottle openers, napkins, etc. If you run a proper kitchen and serve food, the list of kitchen supplies will obviously be more thorough!
• Cash register/Card reader
• Cleaning supplies

What else? Well, that gets you started with your shopping list!

7. Make your space dashing (and safe and accessible!)

What can make your venue stand out from the crowd — and make your customers want to post about it in their socials — is the interior design, or somehow eye-appealing interior of the space. Themed karaoke rooms can be really anything — only your imagination and budget is the limit! Use an interior specialist, or your imagination. Source fleamarkets for furnitures or go upmarket — it all really depends on your budget and vision. If your budget is not big, even well picked paint can do wonders! Read here for more karaoke room design tips .

Especially if you are running several karaoke rooms, you need to take care of soundproofing your venue , so that neighbors, or singers in other rooms wont get too bothered when the singing gets loud in the am hours. And trust us — it will! Also, customer-proof your equipment , to increase their longevity.

Also, make sure to follow the requirements of safety and accessibility. You want your customers to enjoy their karaoke evenings safely and with no worries, and take accessibility into account.

8. Hire staff!

When your launch is getting closer, you need to do some recruitment, unless you're planning to run the operations on your own (could be tricky!). So make sure you have your karaoke-loving, customer-service oriented people ready when your opening is getting close. A good practice is to do a proper onboarding to your personnel, so that they get familiar with all practices, places, and devices. PS. Maybe have a karaoke night with your staff pre-opening, at one of your brand-new karaoke rooms, so that they'll know exactly what they'll be selling to your customers! This can also be an extremely good team building exercise — speaking from experience!

9. Get the word out with marketing!

To fill your venue right from the start, you better get marketing! Whether you have a dedicated marketing person, or you're running marketing on your own, here's some general marketing channels for you to consider.

👉 Read our comprehensive article about how to promote your karaoke room business !

• Social media marketing: Tiktok, Instagram, Facebook, Twitter. Make sure your venue has an account with up-to-date info and some appealing images and videos. Don't be shy, show your face and what's happening at the venue! Behind-the-scenes, party footage, etc. Might be worth it to hire a professional photographer for few nights to get some great footage from your venue to use in marketing!
• Google Ads: Paid ads on Google — target the people you wanna reach online.
• Flyers, posters, ads to the neighborhood and venues/stores nearby: Spread the word! Many people might spot info about your venue when they visit a close-by grocery store or a burger joint. But make sure to do this on friendly terms — only leave flyers and posters with permission!
• Influencers: invite over some folks with a good following! Can turn your karaoke room venue's reputation from ' neverheard' to ' place to be' in one night, if you get the right people in!
• Special events: a good marketing hook can be built around a special event or discounted karaoke room campaigns!
• Press/PR : let the press know! You can either invite some press over to your opening event or try sending some press releases to local new sites or papers.

10. Open the doors and let singing begin!

Whoah! That must have been a journey — to open a private room karaoke bar from an idea to a ready-to-launch entertainment venue. Congrats already! Once you open your doors, the real work begins. And of course — the singing begins! How to sell more food and beverages in your karaoke room? Read here .

We hope this was helpful. Please be in touch with us on [email protected] , or chat with us on our website www.singa.com/business , if you need help with starting a karaoke room business.   And don't forget to download our karaoke room business guide , with valuable insights and business data to give you more knowledge on how to open a private room karaoke bar!

Karaoke Bar Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Food Sector » Bar

Are you about starting a karaoke bar? If YES, here is a complete sample karaoke bar business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a karaoke bar. We also took it further by analyzing and drafting a sample karaoke bar marketing plan template backed up by actionable guerrilla marketing ideas for karaoke bar companies. So let’s proceed to the business planning section.

Why Start a Karaoke Bar Business?

If there is anything that would make it easier for you as an entrepreneur, it would be starting a business that you are passionate about. A business that you have good knowledge of, a business you are proud of and of course a business that you can go the extra mile for.

The truth is that if you start a business just for the sake of making money, you are likely going to struggle to grow the business. When the going gets tough as expected, you are likely going to pull out. One business that falls under this category is a karaoke bar; you cannot successfully run a karaoke bar business if you aren’t a music lover yourself.

If you are sure that this type of business is what you truly want to do after you must have conducted your market research and feasibility studies, then the next step to follow is to write a good business plan; a detailed blueprint of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your services.

Below is a sample karaoke bar business plan template that can help you to successfully write your own with little or no difficulty.

A Sample Karaoke Bar Business Plan Template

1. industry overview.

Establishments in the karaoke bar industry basically offer karaoke entertainment along with food and drinks. Karaoke is a form of interactive entertainment in which amateur singers can sing along with recorded music (or a music video) using a microphone and public address system.

Businesses in this industry usually provide limited food and alcohol services as a means of increasing their revenue generation.

If you are a close observer of happenings in the karaoke bar industry, you will agree that the escalating external competition and tepid growth in alcohol expenditure have harmed the performance of the Karaoke Bar industry over the five years to 2017.

Consumer spending has assuaged these factors somewhat, as renewed interest in high-end karaoke bars has stimulated consumer interest in urban areas. Nevertheless, the primary drive behind the industry’s structural decline has been the continued shift of karaoke fans away from karaoke bars and into the comfort of their own homes.

Going forward, industry revenue is anticipated to continue its descent, even though at a slower rate than during the previous five years. As a means to counteract the industry’s structural decline, karaoke bars are anticipated to focus closely on their target markets in the years ahead.

The Karaoke Bar industry is indeed a thriving industry in the united states, Canada and in most countries in Europe. Statistics has it that the Karaoke Bars in the United States of America are worth $435 million, with an estimated growth rate of -1.2 percent.

There are about 1,270 legally registered and licensed karaoke bars scattered across the United States of America and they are responsible for employing about 6,288 people. The industry is an open industry hence a low level of market share concentration.

A recent report released by IBISWorld shows that the Karaoke Bars industry is in the decline stage of its economic life cycle.

This stage is characterized by a slow decline in the number of establishments and stable product lines. Industry value added (IVA), which measures an industry’s contribution to the overall economy, is expected to decrease at an annualized rate of 0.5 percent over the 10 years to 2022.

On the other hand, US GDP is projected to grow at an annualized rate of 2.0 percent during the same period. These figures signify that the industry’s share of the domestic economy is slowly declining. Over the 10 years to 2022, the number of domestic karaoke bars is forecast to decline at an annualized rate of 1.7 percent to reach 1,190 locations.

Any entrepreneur who wants to start a karaoke bar business in the US would definitely be confronted with tough competition.

The truth is that you will not only compete with karaoke bars in your location or city, but you would be competing with every other entertainment options such as wine bars , night clubs, restaurants, casinos et al where people are allowed to perform karaoke.

2. Executive Summary

Black Street® Karaoke Bar, LLC is a neighborhood karaoke bar that will be located in the heart of Las Vegas – Nevada close to a residential estate. We have been able to secure a one-year lease of a vacant facility within the city. We are fortunate to secure a facility with an option of renewal for 5 years at an agreed rate that is favorable to us.

We are going to be involved in operating karaoke lounges, serving alcohol, serving food and nonalcoholic beverages et al to visitors in a conducive environment that is specifically designed for socializing and networking, and free from all forms of violence.

Black Street® Karaoke Bar, LLC is designed to meet both the health and safety standard as recommended by the local authority.

Our customers are going to be treated with good music at all times. We have made provision for live band, karaoke, country side music and jazz et al.  This will be played at the background to create the ambiance that our customers will cherish.

We are in business to make profits at the same time to give our customers value for their money; we want to give people the opportunity to choose from a wide genre of music, and drinks manufactured in the United States of America and overseas.

We aware that karaoke bars easily attract music lovers and we know that the campus community is one of the places where we can easily tie down these people especially when they have to socialize.

We will ensure that all our employees are selected from a pool of customer centric people in and around Las Vegas – Nevada. We will make sure that we take all the members of our workforce through the required training that will position them to meet the expectation of the company.

Black Street® Karaoke Bar, LLC is owned by Ella Middleton and her immediate family members. Ella Middleton has managed several karaoke bars and night clubs in Los Angeles and Las Vegas prior to opening her own karaoke bar.

3. Our Products and Services

Black Street® Karaoke Bar, LLC is going to operate a standard karaoke bar in the heart of Las Vegas that will also make available assorted wines and alcoholic drinks. We are in the karaoke bar line of business to make profits and we will do all that is permitted by the law of the United States to achieve our business goal, aim and objectives.

These are some of our product and service offerings;

• Operating karaoke lounges
• Serving alcohol
• Serving food and nonalcoholic beverages
• Cover fees and song charges

4. Our Mission and Vision Statement

• Our vision is to establish a standard karaoke bar in Las Vegas – Nevada that will be the melting pot of all lovers of karaoke and good music in and around the location where our karaoke bar is located.
• Our mission is to establish a karaoke bar business that will become a leading brand in the Karaoke bar industry in Las Vegas – Nevada.

Our Business Structure

Black Street® Karaoke Bar, LLC is a business that is established to be a pacesetter when it comes to how a standard karaoke bar should be run.

We have the goal of assembling a team of dedicated workforce who will give our customers excellent customer service at all times, a team that will ensure that we will continue to have repeated customers and a team that will indeed make us the melting pot for karaoke lovers in and around Las Vegas – Nevada.

We will work hard to ensure that we only attract people with the right mindset to help us achieve our business goals and objectives. Below is the business structure that we will build Black Street® Karaoke Bar, LLC;

• Chief Executive Officer (Owner)
• Karaoke Bar Manager
• Bartender/Baristas
• Accountants/Cashiers
• Procurement Officer
• Greeters / Customer Service Agent / Table Attendant

Security Officers

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions.
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Karaoke Bar Manager:

• Responsible for managing the daily activities in the karaoke bar
• Ensures that the facility is in tip top shape and conducive enough to welcome customers
• Interfaces with vendors
• Reports to the Chief Executive Officer
• Attends to Customers complains and enquiries
• Responsible for Training and Development in the organization
• Responsible for procuring of supplies
• Handles any other duty as assigned by the CEO

Bartender/Baristas:

• Interacts with customers; takes orders for drinks and snacks.
• Plans and presents bar menu to clients.
• Checks identification of the guests to make sure they meet age requirements for purchase of alcohol and tobacco products.
• Mixes ingredients to prepare cocktails and other drinks.
• Mixes drinks, cocktails and other bar beverages as ordered and in compliance with standard drink recipes.
• Prepares alcohol or non-alcohol beverages.
• Arranges bottles and glasses to make attractive displays .
• Assesses customers’ needs and preferences and make recommendations
• Makes lists of supplies in conjunction with the bar manager/management
• Prepares inventory or purchase requisitions as needed to replenish supplies.
• Ensures that the assigned bar area is fully equipped with products needed for mixing beverages and serving guests.

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Disc Jockey (DJ)

• Coordinates karaoke sessions
• Ensures that customers are entertained with the best of music
• Manages the sound system for the karaoke bar
• In charge of music collections
• Responsible for developing music playlists.
• Responsible for mixing music tracks

Greeters/Customer Service Agent/Table Attendant

• Opens door and welcome customers
• Ensures that customers feel relaxed and at home
• Handles customers’ enquiries
• Provide recommendations and suggestions to guest for choosing drinks and snacks.
• Serves customers in a friendly manner.
• Determines when a customer has had too much alcohol and if required refusing any further serving in a polite way.
• Demonstrates a thorough knowledge of company alcoholic products, menus and promotions
• Handles any other duty as assigned by the karaoke bar manager
• Cleans up after customers
• Clears ashtrays as and when required.
• Washes glassware and utensils after each use.
• Maintains a clean working area by sweeping, vacuuming, dusting, cleaning of glass doors and windows, etc. if required.
• Ensures that toiletries and supplies don’t run out of stock
• Ensures that the karaoke bar facility is secured at all time
• Controls traffic and organize parking
• Gives security tips to staff members from time to time
• Patrols around the building on a 24 hours’ basis
• Submits security reports weekly
• Any other duty as assigned by the karaoke bar manager

6. SWOT Analysis

Black Street® Karaoke Bar, LLC is established with the aim of becoming the melting point for karaoke lovers in Las Vegas – Nevada which is why we have taken our time to conduct a SWOT analysis to be able to identify areas we need to work on if indeed we want to achieve our business goal.

No investor would want to invest his or hard earned money without assessing the risks involved in the venture and also his or her capability to deliver and make profits from the business. The ability to make profits from any business and to favorably compete with competitors in the industry starts with the result you get from your SWOT analysis.

Below is a summary of the result that was generated;

Our strength as a company are excellent and detailed customer service, well-coordinated karaoke sessions and a wide range of assorted tobaccos, and alcoholic drinks both from the United States and other parts of the world. Excellently secured facility, good ambiance and perfect location are also our strengths.

Our perceived weakness could be that we are a new business, and we may not have the financial muscle to sustain the kind of publicity we want to give our business.

• Opportunities:

There are unlimited business opportunities available to karaoke bar businesses in busy cities like Las Vegas – Nevada; Las Vegas is one of the cities in the world where social life is at its peak. Besides, the city where our karaoke bar is located is one of the busiest in the United States and it is open to loads of opportunities due to the influx of tourists.

Another opportunity that we stand to leverage on is the fact that we can easily order any brand of tobacco, wine and drinks directly from the manufacturers with little or no stress.

Securing license from music artists might pose a threat for our new karaoke business. Another major threat that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power which ultimately affects social life.

Another threat that may likely confront us is the arrival of a new karaoke bar within same location where our target market exists and who may want to adopt same Business model like us.

7. MARKET ANALYSIS

• Market Trends

The trend in this line of business is that karaoke bars are anticipated to more closely focus on their target markets to counteract declines in demand. Despite the fact that the karaoke bars industry has long existed in the United States, it is starting to come back into fashion.

Innovative music genre and sound system technology have increased demand over the last five years. A close observation of the trends in the industry shows that patrons of karaoke bars have increased dramatically among American and European youths in recent years because of the social atmosphere it creates, and because many young adults believe karaoke bars can give them the pleasure they will get by attending expensive musical concerts.

In order to remain open, many karaoke bars started selling food or beverages. Many of these karaoke bars are furnished with cozy booths encased in rich colors and plush surroundings in hopes their guests will linger. The phlegmatic environment lends itself to a good socializing setting with a less crowded feel and more intimate appeal.

A host of karaoke bars have begun to incorporate a larger variety of alcoholic drinks and food choices as part of their product offerings. It is obvious that adding these product offerings help in creating alternate source of income even if they struggle to attract people who are only interested in being entertained.

8. Our Target Market

Before starting our karaoke bar business in Las Vegas – Nevada, we conducted a market survey and feasibility studies and we are certain that there is a wide range of people who would patronize our karaoke bar on a regular basis. In view of that, we have created strategies that will enable us reach out to various groups of people who are likely going to become our loyal customers. Below are our target markets;

• Corporate Executives
• Taxi Drivers
• College Students

Our Competitive Advantage

We are mindful of the fact that there are competitions in the karaoke industry in the United States of America; hence we have been able to hire business developers to handle our sales and marketing. Part of the competitive edge we will be bringing to the market is the fact that we already have a loyal customer base, our ability to quickly adopt new technology in the industry and we aware that we must adhere to licensing requirements.

So also, the fact that we operate a standard karaoke bar in a perfect location for the kind of business that we run and also the fact that our karaoke bar facility is highly secured counts favorably for us. We are not ruling out the fact that we have a dedicated and customer centric workforce that are willing to go the extra mile to give our customers full value for their money and time whenever the patronize our karaoke bar.

We are not ignoring the fact that we are among the few neighborhood karaoke bars in Las Vegas – Nevada and we sell almost all brands of tobacco and alcoholic drinks available in the United States of America.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups karaoke bar businesses in the United States) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Black Street® Karaoke Bar, LLC is established with the aim of maximizing profits in the karaoke bar industry and we are going to go all the way to ensure that we do all it takes to attract our target market. The sources of income for Black Street® Karaoke Bar, LLC are stated below;

10. Sales Forecast

One thing is certain when it comes to karaoke bar business, if your karaoke bar is cozy, relaxing, well stocked and centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Las Vegas – Nevada and we are quite optimistic that we will meet our set target of generating enough income from the first six months of operation and grow the business and our clientele base.

We have been able to critically examine the karaoke bar market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in Las Vegas – Nevada.

• First Fiscal Year: $120,000
• Second Fiscal Year: $350,000
• Third Fiscal Year: $750,000

NB : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products as we do within the same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Top of the list on our marketing and sales strategy is generating a buzz for our karaoke bar via word-of-mouth and leveraging on road show around UCL campus community.

Despite the fact that our first outlet is located in the heart of town in Las Vegas – Nevada, the model of karaoke bar we intend running is a neighborhood bar hence we are not going to rely only on conventional ways of marketing. We don’t have the plans to run paid adverts on Local TV and radio stations or even local newspapers but we will sure maximize every other available means to promote our business.

Our unique selling proposition is that we have a collection of almost all the genre of music and we also have assorted alcoholic and non – alcoholic drinks et al. In view of that, we are going to adopt the following marketing strategies to ensure that we do not only attract customers but generate repeated sales from them. Parts of the marketing and sales strategies that we will adopt are;

• Open our karaoke bar in a grand style with a party for all.
• Introduce our karaoke bar by sending introductory letters alongside our brochure to organizations, households and key stakeholders in Las Vegas – Nevada
• Ensure that we have a wide range of tobacco, wines, beers, liquors, distilled spirits, martinis and non-alcoholic drinks at all times.
• Make use of attractive handbills to create awareness and also to give direction to our karaoke bar
• Delivering consistent customer experience to all our guest; making our first impression count positively
• Position our signage / flexi banners at strategic places all around Las Vegas
• Position our greeters to welcome and direct potential customers
• Create a loyalty plan that will enable us reward our regular customers
• Engage on roadshows within our neighborhood to create awareness for our karaoke bar.

11. Publicity and Advertising Strategy

Black Street® Karaoke Bar, LLC is a neighborhood karaoke bar and we will ensure that we create the buzz that will make people in our area know about us and what we do.

We are quite aware that one of the effective ways of promoting our karaoke bar is to create special internal promotions which in turn will help us achieve our aim of leveraging on word of mouth publicity. Here are the platforms we intend leveraging on to promote and advertise Black Street® Karaoke Bar, LLC;

• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, 4Share, Google+ and other platforms (music online forums) to promote our business
• Ensure that our we position our banners and billboards in strategic positions all around Las Vegas – Nevada
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Advertise our karaoke bar business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and vans and ensure that all our staff members and management staff wears our branded shirt or cap at regular intervals

12. Our Pricing Strategy

Black Street® Karaoke Bar, LLC will charge our clients flat fees except for few occasions where there will be need for us to charge special clients on monthly basis.

At Black Street® Karaoke Bar, LLC we will keep our fees below the average market rate for all of our clients by keeping our overhead low. In addition, we will also offer special discounted rates to all our clients at regular intervals. The prices of our services will be same as what is obtainable in the open market in the United States of America.

• Payment Options

The payment policy adopted by Black Street® Karaoke Bar, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Black Street® Karaoke Bar, LLC will make available to her clients;

• Payment with cash
• Payment via credit cards/Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer

In view of the above, we have chosen banking platforms that will enable our clients make payment for our services without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a karaoke bar business; it might differ in other countries due to the value of their money.

This is what it would cost us to start Black Street® Karaoke Bar, LLC in the United of America;

• The total fee for registering the Business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,200.
• Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring business consultant – $2,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost of accounting software, CRM software and Payroll Software – $15,000
• Cost for payment of rent for 12 months at $1.76 per square feet in the total amount of – $105,600.
• The cost for facility remodeling – $25,000.
• Other start-up expenses including stationery – $500
• Amount needed for phone and utility deposits – ( $2,500 )
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for start-up inventory (assorted tobaccos, assorted cigars and alcoholic and non-alcoholic drinks) – $16,027
• Storage hardware (bins, utensil rack, shelves, glass cases) – $3,720
• The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
• The cost for serving area equipment (glasses, flatware) – $3,000
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
• The cost of launching a website – $600
• The cost for our grand opening party – $5,000
• Miscellaneous – $2,500

We would need an estimate of two hundred and fifty thousand ($250,000 ) to successfully launch our karaoke bar in downtown Las Vegas – Nevada.

Generating Startup Capital for Black Street® Karaoke Bar, LLC

Black Street® Karaoke Bar, LLC is a private business that is owned by Ella Middleton and her immediate family members and they intend to finance the business alone. Although they have plans to make the karaoke bar manager part owner of the business after 5 or 7 years of service.

Since they are the sole financiers of the business, they have decided to adopt the following means to generate startup capital for the business;

• Generate part of the startup capital from his personal savings and sale of his stocks
• Source for soft loans from family members and friends
• Apply for loan from the Bank

N.B: Mrs. Ella Middleton and her family have been able to generate $100,000 . The breakdown shows that they generated $75,000 from their personal savings and sale of their stocks and they generated $25,000 soft loans from their family members and friends.

The balance of $150,000 will be generated as loan facility from the bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategies and business structure. If all these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Black Street® Karaoke Bar, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to properly position our karaoke bar, ensure adequate security, availability of various brands of tobacco, alcoholic and nonalcoholic drinks and excellent customer service et al.

Black Street® Karaoke Bar, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing license from music companies: In Progress
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Renting of facility and remodeling the facility plus installation of sound system: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, electronic appliances, office appliances and bar accessories: In progress
• Creating Official Website for the Company: Completed
• Creating Awareness for the business both online and in the neighborhood: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party/launching party planning: In Progress
• Establishing business relationship with vendors – suppliers of cigars, wine, alcoholic and non – alcoholic drinks, tobacco etc: In Progress

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The Provi Guide: How to Write a Bar, Restaurant or Retail Shop Business Plan

Build your dream bar, restaurant or retail shop business with Provi

The key to a successful bar, restaurant or retail business starts with an effective and enticing business plan. Whether you’re looking to open your dream business or already running one, Provi's business plan guide includes valuable information for any aspiring or practicing entrepreneur.

Here's what's inside

• An in-depth guide on the key elements of a hospitality business plan
• Tips on how to craft a mission statement, perform an industry & competitive landscape analysis and define a concept's service model
• Includes an essential list of financial overview and projection needs to help secure funding

Fill out the form below to download the guide to writing a bar or restaurant business plan

Corey hines.

Career bartender turned Content Marketing Manager at Provi, covering all things beer, wine and spirits.

[email protected]

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1. Don't worry about finding an exact match

We have over 550 sample business plan templates . So, make sure the plan is a close match, but don't get hung up on the details.

Your business is unique and will differ from any example or template you come across. So, use this example as a starting point and customize it to your needs.

2. Remember it's just an example

Our sample business plans are examples of what one business owner did. That doesn't make them perfect or require you to cram your business idea to fit the plan structure.

Use the information, financials, and formatting for inspiration. It will speed up and guide the plan writing process.

3. Know why you're writing a business plan

To create a plan that fits your needs , you need to know what you intend to do with it.

Are you planning to use your plan to apply for a loan or pitch to investors? Then it's worth following the format from your chosen sample plan to ensure you cover all necessary information.

But, if you don't plan to share your plan with anyone outside of your business—you likely don't need everything.

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Bar Business Plan Template

Bar executive summary.

As the introductory section to your plan, the executive summary is usually the last element to be written. Investors and lenders focus on the first page of the executive summary before deciding whether to read on, so lay out the most critical elements right away. Describe your bar in simple, concise terms. Provide a summary of your market analysis and proof that the market can support another bar. Also describe what makes your bar uniquely qualified to succeed. For example, will you be the only sports bar, or can you attract a unique customer segment?

BAR BUSINESS PLAN OUTLINE

• Bar Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan
• 10. Appendix
• Bar Business Plan Summary

Start Your Bar Plan Here

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How to Start Your Own Karaoke Business?

• 45 comments
• 55,965 views

Karaoke's popularity is gaining momentum as time passes, and many entrepreneurs plan on setting up their karaoke-related businesses. Your finances are the primary thing to consider when setting up this kind of business. Your financial standing will lay the groundwork for what type of karaoke business you wish to establish. Micro-entrepreneurs only need a list of karaoke machine makers and your supply of karaoke machines for rental.

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For those who wish to set up KTV bars and lounges, you would need several things: financial backing, location, a sharp lookout with competing business establishments, and acquiring the necessary papers for your business. Karaoke businesses of almost all kinds are sprouting like mushrooms in almost every country, and why not?

This kind of business seems to have so much breathing room for expansion. Karaoke’s popularity is only gaining momentum as time passes. It is incredible that less than 40 years ago, this word was never seen in any dictionary – not even in Japan. Today, almost everyone knows what karaoke means and even what it initially stands for. However, many pronounce it with a “Western twang,” often saying ‘kar-ee-OH-kee’ rather than the Japanese pronunciation ‘ka-rah-ok-e.’

Starting this kind of business may or may not be pricey. It depends on your budget and what type of karaoke business you wish to run. So first, check your financial standing and see how much overhead you want to invest. This will lay the groundwork for what kind of karaoke business you wish to establish.

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Some karaoke businesses need as little as one coin-operated machine, a microphone, and a willing singer. In this case, all you need is a tiny place to place the machine, preferably someplace that is either sound-proof or so far away from people who might not wish to be subjected to all that singing. Undeniably, this sort of micro-entrepreneurship is thriving. You might even find one or two of these coin-operated machines in the most unlikely places: in malls, in bazaars, in fairs, etc. Other forms of karaoke-related micro-entrepreneurship include online selling of karaoke machines and rentals. This entails owning a list of karaoke machine makers, where you act as the middle person between supplier and buyer and your supply of karaoke machines for rental, respectively.

The evolution of karaoke technology has forever given rise to the word KTV or karaoke TV. This is due to the advent of the karaoke box: a standard karaoke machine connected via fiber-optic links that provide instant high-quality music with video and accompanying song lyrics. This then gives rise to the famous night entertainment establishments like karaoke bars and lounges.

This type of business needs a lot of financial backing. KTV bars and lounges cannot be web-based for undeniable reasons. You would therefore need to find a location for your business. Anywhere in the city where the nightlife is active is a perfect place to start this business. There are some things to look out for, nonetheless. One is competition among other KTV bars and lounges. Another one is the possible noise restriction, which can be easily checked by studying local laws and regulations concerning setting up new businesses.

Also, if you serve liquor and alcoholic beverages in your place of business, learning the local laws and regulations is helpful. You will need to apply for permits and licenses for your KTV bar/lounge and the liquor and alcoholic beverages you plan to sell. At the onset, a KTV lounge was not a place where liquor and alcoholic drinks were once served. These days, the line between a KTV bar and a KTV lounge is somewhat blurred, and both establishments now have the liberty to sell food and drinks should they wish to.

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• Starting a Ringtone Business Looking into rise in number of cell phones one can easily see the scopes in ringtone business. If you want to know how you can start a ringtone business then read on. Starting a ringtone company becomes very easy after you go through our pointers.

45 Comments

• ojen   said on January 30, 2010 Cafe/Bar/KaraokeBox(2-3rooms). Queen st. and Jameson st. Toronto, ONT Canada. please help me in starting this business.
• paul brewer   said on March 27, 2010 I would like to start my own karaoke business. My son gave me a idea of a karaoke lounge. The concept is to start with six individual (5-10 people) karaoke rooms and one large (25-50) room. It sounds simple, computer controlled and operating from a single serve type device over a LAN. However, I don't know enough about the necessary equipment required from a single song bank to the end user. I've looked at dozens of equipment sites but none advertise equipment and accessories that do what I envision. I'd like a list of server equipment, connectivity, and end-user equipment. Also. sources to buy. I need this info for the business plan. Thanks Paul Brewer
• June Yoon   said on April 27, 2010 I have a 2500sqt space in commercial zoning in Aldergrove B.C Canada. I am going to use 1250sqt for a cafe and 1250sqt for karaoke rooms. I have been a cafe business for many years, but a karaoke bar is a first time. I need to know what kind material is the best for a sound protection. Also, what is the newest karaoke machine, and how to download the new song which how can I put in the equipment. I need that English, Korean, Chinese, and Vietnam songs for customers
• Rainbow   said on July 22, 2010 I would like to start my own karaoke business, we will start with 10 individual small karaoke rooms, and one open place. I want to know what kind material i need to buy.(computer controlled type) we focus on the international customer. and we want the system all the time update. we would like to get the list of the equipment we will going to buy. thank you.
• KyawSwa   said on July 29, 2010 I want to start karaoke business, i have all necessary equipment and enough pc for my business. But I have problem.......I don't have any software to control. I will use one PC per one room and then I will save all song on the server. Is there any software that can use like that? Please help me
• Doug Glesne   said on August 31, 2010 I have started to sing country western classic music but I need instrumental background music as I don't play guitar or anything. Please advice me how to set up to get background music. Thank You.
• Uni-voice   said on December 25, 2010 Me and four of my friends have been planning and in the works of opening up our own karaoke bar/lounge. We have everything planned and now we just need the start of cost. I got a great deal on a spot. It is 10k square feet and charging 6000 per month. I'm starting out with 10 rooms and a big lounge area. I need an estimate price on karaoke systems and tvs. Also any other advice would be greatly appreciated. Thank you!
• Shawn Nguyen   said on December 31, 2010 I would like to start my own karaoke business, we will start with 4 individual small karaoke rooms (6-10), and one open place. I want to know what kind material i need to buy.(computer controlled type) we focus on the international customer (Chinese/Vietnamese/Korean. etc) and we want the system all the time update. we would like to get the list of the equipment we will going to buy. thank you. Also what kind of material I need to sound proof the walls. Also how much space do you think I need to get. Also a cafe.
• Aishath Rasheeda   said on January 28, 2011 Me and 3 of my friends are planning to open a karaoke cafe', start with 2 individual small karaoke rooms (2-6), and one open place. I want to know what kind material i need to buy.(computer controlled type) we focus on our own community who loves singing English & Hindhi songs and we want the system all the time update. we would like to get the list of the equipment we need to have and an estimated pricing for equipments. thank you. Also what kind of material I need to sound proof the walls. Also how much space do you think I need to get. Also a cafe.
• Tshering Phuntsho   said on April 21, 2011 i would like to open small karaoke club with some drinks available. I would like to know in which place would it be best in the area of Bts in Thailand. i also would like to know how to attract the customer and which kind of customer will they come. I am planning on the project but have no idea how to get started. So i can i get started and how can i get all the materials that i need.
• wobbs   said on April 28, 2011 Hi I would like to start my own karaoke business, to run in conjunction with my DJ work. Where can I find the correct song format to be able to do this? I'm not interested in midi format.
• Gao Meng   said on November 4, 2011 I interested in having a karaoke. but I don't know to start
• Marc   said on November 18, 2011 Hi! I'm looking to start a Karaoke Business in Switzerland. I was wondering if there are recommended machines and what is the best way to obtain the KTV content? Especially how does updating work? Are there services that provide frequent updates of popular songs? English and Chinese required, German would be a huge plus. Thanks!
• jihane mrad   said on December 13, 2011 los angeles ,hollywood. i need to get the franchise of ktv karaoke to open it in hollywood. how can i do that or the same concept with help with all the equipments and stuff and if i can get some of the resources to contact them and deal with it
• grace francisco   said on January 21, 2012 manila, philippines, hi me and my two friends are planning to establish a karaoke bar, please share as some info on how to start. thanks
• lyzakim   said on March 11, 2012 hi,,me and my husband planning to open a karaoke or ktv bar.but i dont know if how to starting.because this is my first time to handle the Business like this.i need this info for this Business.please help me,share as some info on how to starting.thank you
• Elina   said on April 9, 2012 Hello, everybody! I would like to start my own karaoke business Illinois. There would 9 rooms and no open space. I don't know how to get karaoke, liquor, food license. if someone knows or someone has a karoake business in Illinois, please share ur experience! Thanks you :)
• Helen Chambliss   said on May 10, 2012 My son married a Filipino and they wish to soon return to the Philippines to live. I was wondering if you knew of tourist locations with reasonable commercial buildings to purchase and also what would be needed to start up a KTV Bar and small cafe for basic appetizers?
• Rose   said on September 6, 2012 Hi! my partner and I are planning to put up a KTV bar, maybe about 3-4 small rooms(6-10). We're from the philippines, btw. But I wanna know first how much would it cost us to start this kind of business. Information about this matter would greatly be appreciated.
• carlo ras   said on September 6, 2012 what is the best and affordable sound system for ktv business? Ozamiz City, Phils.
• wilson   said on October 5, 2012 United State, Philadelphia. My biggest concern is where do i start looking for the karaoke song licenses. How much are they and would you know any link? Thank you, Wilson
• Isabel   said on October 19, 2012 I want to start my own karaoke combine with hall of events.which are the documentation that i need.
• Rosie   said on November 18, 2012 My brother is a dealer for karaoke and selling all lights and sounds system in the Philippines. Want to buy? Contact me. [email protected]
• luann   said on November 24, 2012 Lexington NC. where can you buy karaoke cds. And what kind of software do i need for my pc?
• danial   said on January 19, 2013 Hi, i want to start a karaoke business but i dont know what equipment i need n where t start. I'm planning on a karaoke in room from 4-6 people per room. location : malaysia. Please give me advice. i really appreciate.
• Kshipra Dhindaw   said on February 16, 2013 Hi, this idea is appealing but before I start planning I need an estimate on the cost here, what sort of space do I need and other details. Can you help. Location India. Assistance Appreciated
• DavidT   said on March 18, 2013 Atlanta, Georgia, Like the others, I've been checking on possible equipment and solutions to get a more up-to-date library for my clients. RSQ player is in one of my choices. Can you give me suggestions. I would like it to be a client/server network. I'm planning to build a 10 room karaoke shop with a open lounge. I'm looking forward to your advice.
• chao guo   said on March 31, 2013 Richardson, Texas, i know where i can get equipment but i am wondering how much does cost for 10 private rooms, remodeling ect. and how could i find out if my city allow me to do karaoke business.
• ivee japson   said on April 14, 2013 i like singing thats why i want to manage a karaoke business but i dont know where i gonna start.. i have a place its in the city and it have a 5 room. all the equipment are set for a karaoke business...
• Daisy   said on September 16, 2013 Hi, I am in Toronto, Ontario, Canada, and I am considering opening up a karaoke business. I am wondering where I could get furniture and equipment, and what equipment would I need?
• Tabitha   said on September 23, 2013 I dont know where to go, to or how to get a license to open a karaoke bar, but its bring your own beer. Not a bar that sales beer. I plan on going to SingSnap, and paying monthly for online karaoke, instead of buying disks they have every song u could want. I live in ms, plan on opening in magee ms help please. Tabytha4klover @ gmail.com
• Rosant   said on October 2, 2013 Hi, I am in the early stages of opening a sports/karaoke bar in Iceland, where I can combine both live sports and karaoke. in your opinion is it more feasibly to have few small rooms for 5-10 people each or a big open area with a stage? The place is 550 sqft. Furthermore, what is the latest technology on the karaoki systems, is it only run by pc or still large LD´s like back in the days. Regards, Rósant
• Khanh Nguyen   said on December 25, 2013 Hello, I would like to start a Karaoke lounge in San Diego, California. I have no idea where to start, please help.
• annie   said on May 10, 2014 i have cafe n ipoh. i would like to add in a ktv for my customers what should i do
• [email protected]   said on May 26, 2014 I would like to start a Karaoke Lounge in philippines but I am residing here in singapore. What should I need to do, pls advise. thanks
• Michelle   said on August 22, 2014 Tacloban City, Leyte, Philippines, Help me on how to put up a business, like a videoke bar. how much is the estimated amount of cost on how to put up the business and its materials.
• mich   said on December 13, 2014 Philippines: I'd like to put up a small Karaoke bar here in our place. Where can I buy a complete set of equipment? can you give me an idea of much would I need to start and how much for the back-up.
• L-jay jamaybay   said on December 18, 2014 id like to put up small karaoke bar here in our place. how much is the estimated amount? complete set of equipment? this is my digit..0595475445..plz repz asap.
• Dyree   said on January 7, 2015 Hi, I would like to start a small Karaoke Bar in my Place Vienna, Austria. Can you give me an idea how to put up the Business, and how much is the estimated cost? and where can i get the equipment needed. Theres no good Karaoke bar here in vienna. thank you in advance.
• Navin   said on January 20, 2015 Hi. I am keen to start a Karaoke Bar in Bangalore, India. Appreciate if you could help me put up the business plan, estimated investment and equipment details. Thanks.
• p333   said on January 29, 2015 Hi i would like to start a karaoke business in the Philippines was wandering about prices for equipment etc...anyone can help me please thanks
• Jerry Ling   said on April 30, 2015 Hi i'm from singapore and i'm planning to start a karaoke business in manila . Could anyone share with me how much is the start up capital involved ?
• Jay   said on May 4, 2015 Hi, I'm from Florida. I would like some suggestions on what brand of karaoke machine is the best. I've seen several brands at other ktv bars and also wondering if there is a single central unit where you can connect to each individual room. and also what is the profitability of this business? thanks!
• kavita   said on March 4, 2016 Hi,I live in Atlanta, GA and planning on starting KTV bar, 4 rooms of 10 capacity+ a café space.I need details like,space needed, machines needed, what kind of connection to use for accessing songs from single library. type of insulation needed for sound proofing approximate cost? and links to buy/rent the machines, installment etc.
• NICOLE DENNIS   said on June 17, 2018 I have read your article above but I still need a step by step advise on how to start my karaoke lounge and what equipment will I need?
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How To Open Up A Bar In The Philippines

Have you ever wondered how to open up a bar in the Philippines? Of course, the process to start any business is not the easiest; however, breaking the complicated stages down into easily readable steps is what we do best.

Today’s article will explore how much capital to start a bar in the Philippines, considerations when opening a bar, and share some existing bars for sale in the Philippines.

Table of Contents

How To Open Up A Bar In The Philippines Step-By-Step

Step 1 – create the business plan of your bar.

It was once said – If you fail to plan, you are planning to fail . These famous words of Benjamin Franklin hold true when opening a bar in the Philippines. A bar business can be costly if there is a lack of initial planning. 

You can skip the small details when making your business plan since these are likely to change as your business grows. Your goals in making your business plan are to determine what needs to be fixed before launching and increase the chance of success.

You can start by planning your startup costs and other finances by determining how much capital to start a bar in the Philippines. You also include your target audience, marketing strategies, revenue projections, and other details that gear toward growing and making profits.

A business plan is crucial for any business. To help you better create your business plan, we have a free PDF guide that can be downloaded above.

Step 2 – Choose A Business Structure

One of the first major steps on how to successfully open up a bar in the Philippines is deciding on your business structure. There are 3 business structures in the Philippines: Sole proprietorship, partnership, and corporation.

If you want to start your bar business in the Philippines on your own, you can consider a sole proprietorship. This is the most basic structure since you work alone. It is also easier to set up because you do not need much capital, have less strict regulations, and SP is more straightforward when obtaining permits and licenses from the government.

Nevertheless, one area to consider is that the business owner is accountable for possible legal issues, and there is no limit to the liability.

Another good option is to opt for a corporation as this will avoid this kind of accountability in some respects. For example, you and your business are 2 different entities since you are not the sole owner. So if someone tries to sue your bar, the business gets sued and not you in theory.

When opening a bar in the Philippines, we recommend speaking to a business lawyer for complete details regarding your personal situation.

Step 3 – Picking A Location For Your Bar Philippines

The ideal location of your restaurant depends on your target market. If your target market is young professionals, you can choose your location in the business districts of cities.  When looking for bars for sale Philippines, it’s recommended to check if customers and staff can easily access the establishment.

Please note, the location of the bar should not be near government buildings, public plazas, hospitals, athletic stadiums, churches, public schools and parks, and other charity or learning infrastructures. The bars should also have proper lighting and sanitation as per local law. If you are launching a nightclub you may wish to check out executive order 319.

Step 4 – Choose Your Bar’s Name

The next step when opening a bar in the Philippines is to decide on your business name. It would be best if you made it unique. A good piece of advice is to prepare at least 5 names and see what will stick in people’s minds. You can also check the names yourself by visiting DTI’s website to see if your preferred name has already been taken.

Step 5 – Select Your Bar’s Image

Picking the concept for your bar is a crucial step on how to open up a bar in the Philippines. That is because your goal from the beginning is to make your bar stand out even if you consider purchasing bars for sale in the Philippines. Being different is critical in industries with market saturation.

You can set your bar’s image and promotional efforts by being the bar with the best prices or serving specialty beer and other drinks. You can also decide on the type of bar you will have, such as a brewery, lounge, or sports bar, among many others.

Step 6 – Decided On Your Design

Your layout and your menu are the 2 crucial features in the design aspect of opening a bar checklist. You can base the vibe of your bar on the image you have decided. The decor and furnishing you will purchase should tie in with your image. Your menu could also match the vibe of your location.

Step 7 – Get All Bar Required Licenses And Permits Philippines

Required licenses and permits are crucial when writing your “opening a bar checklist.” This prevents your business from getting into legal trouble. A business owner will need to obtain licenses to be permitted to serve alcoholic drinks and food. 

First, a new business owner will need to register the business name by going to the DTI to choose a sole proprietorship. For a corporation, a new business owner will need to go to the SEC. In addition, there is also barangay clearance. Then, a business owner will visit the city hall to get the mayor’s permit and the BIR for the TIN. 

Since you will be serving alcohol, you need a liquor license and statutory benefits for your employees, such as SSS.

These are just some of the basic requirements. Depending on the city where you will establish your business, there can be different requirements. Therefore, it is best to visit your city’s official website to see the complete list of requirements. 

Step 8 – Search For Bar Suppliers Philippines

After you know how much capital to start a bar in the Philippines, you can start searching for suppliers. When looking for suppliers , you can consider the variety of brands they offer, the minimum purchasing cost, and delivery schedule and price. 

You also consider the equipment and other furnishings you may need. Some of these are:

• Air Conditioner
• Bar Counter
• Dining Furniture (Chairs, Tables, High Chairs, Etc.)
• Entertainment Equipment (TVs, Speakers, Etc.)
• Glassware And Serving Tools
• Measuring Tools

Step 9 – Hire Staff For Your New Bar Business

The last task to complete the process on how to open up a bar in the Philippines is hiring the best people who will help you operate your bar. Depending on your bar plan and size, you will need security guards, bartenders, servers, hosts, and hostesses. If you have a kitchen, you may also need to hire chefs.

How Much Capital To Start A Bar In Philippines 

The estimated capital you need to start a bar business in the Philippines is 2 million pesos to 4 million pesos for a large bar and 500,000 Pesos to 1 million pesos for a small-sized bar. Nonetheless, your business plan will determine the total price you need. This price will be decided by the staff, size, location, facilities, and others.  

Estimated Breakdown:

• Commercial space – P35,000 to P40,000 per month (This is the estimated lease price in Quezon City.)
• Renovations and decor – P15,000 to P20,000 for every square meter (The cost includes construction, furniture, and decor.)
• Kitchen supplies and equipment – P100,000 – P1,000,000 (This includes storage hardware such as shelves, store equipment such as security and cash register, and serving equipment such as glasses.) 
• Licenses and permits – P7,000 to P14,000 (This depends on the chosen business structure.
• Furniture and gadgets- P200,000 – P400,000 (TVs, computers, air conditioners, telephones, POS system, and sound system are considered.)
• Food and beverage costs – P150,000 – P400,000 (This is the estimated cost for your startup inventory.)
• Operational cost for the first 3 months– P2,500,000 (This covers the salaries of your staff, bills payment for electricity and internet, etc)
• Miscellaneous- P120,000 (Examples of these are uniforms and staff training.)

There are also existing bars for sale In the Philippines. For instance, in a premium spot in Muntinlupa, a well-maintained bar with a POS system, website, and following on social media was purchased for P9,000,000 through a broker.

Rules And Law On How To Open Up A Bar In The Philippines

Here are some of the rules you need to remember when you open or check out bars for sale Philippines. 

The location of the bar should not be near government buildings, public plazas, hospitals, athletic stadiums, churches, public schools and parks, and other charity or learning infrastructures. The bars should also have proper lighting and sanitation. All the staff should also have a health certificate from the city health office. This is to prove that they are free from any contagious diseases.

Licenses and permits have to be complete and updated. Therefore, it is best to verify the validity of all the permits and licenses you obtain. The business license can be revoked if there is evidence of gambling or playing prohibited games in the bar.

Opening A Bar Checklist 

Your opening a bar checklist gives your bar a better chance to succeed. Here are some of the things you need to tick before your launch:

• Buy And Monitor Your Inventory
• Choose The Business Structure For Your Bar
• Conceptualize Your Bar
• Create Bar’s Business Plan
• Do Marketing (Social Media)
• Hire Excellent Staff
• Obtain The Required Licenses And Permits
• Pick A Location
• Register Your Business Name

Bars For Sale Philippines

• Location: Ortigas
• Link: https://linkbusiness.ph/businesses-for-sale/OR00491/FAMOUS-RESTOBAR-FOR-SALE-in-ORTIGAS
• Price: P4,500,000
• Location: Cubao
• Link: https://linkbusiness.ph/businesses-for-sale/OR00389/Your-Neighborhood-Reputable-Sports-Bar
• Price: P1,800,000
• Location: Muntinlupa
• Link: https://linkbusiness.ph/businesses-for-sale/AL00144/Modern-Comfort-Food-in-Filipino-Style-Serving-With-Wine-and-Liquor
• Price: P8,000,000

Tips On Opening A Bar In The Philippines

When purchasing a bar in the Philippines, it is important to know why it is being sold. Being thorough in your research would help. For instance, the bar we mentioned in Muntinlupa was sold due to the retirement , absence of successors, and a change in lifestyle of the owners. Other things you have to consider are the finances and competition of the bar you are considering when opening a bar business in the Philippines.

Starting A Bar Business Philippines: Resourced & References

• Department of Trade and Industry – https://www.dti.gov.ph/negosyo/business-registration-and-permits/
• Business Law (for foreigners) – https://lawphil.net/statutes/repacts/ra1968/ra_5455_1968.html
• Other Business Law – https://businesstips.ph/list-of-business-laws-in-the-philippines/
• Consumer Beer Price – https://iprice.ph/groceries/alcohol/beers/
• Beer Price – https://business.inquirer.net/194424/its-more-fun-for-cheap-beer-drinkers-in-ph
• Filipino Beer Expense – https://www.philstar.com/lifestyle/food-and-leisure/2021/02/24/2080054/average-filipino-spends-p23000-yearly-beer-report

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How to Write a Winning Bar and Grill Business Plan + Template

Creating a business plan is essential for any business, but it can be beneficial for bars and grill s who want to improve their strategy or raise funding.

A well-crafted business plan outlines your company’s vision and documents a step-by-step roadmap of how you will accomplish it. To create an effective business plan, you must first understand the components essential to its success.

This article provides an overview of the critical elements that every bar and grill owner should include in their business plan.

Download the Ultimate Business Plan Template

What is a bar and grill business plan.

A bar and grill business plan is a formal written document describing your company’s business strategy and feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and includes information about your team members. Your business plan is a critical document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Bar and Grill Business Plan?

A bar and grill business plan is required for banks and investors. The document is a clear and concise guide to your business and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Bar and Grill Business Plan

The following are the critical components of a successful bar and grill business plan:

Executive Summary

The executive summary of a bar and grill business plan is a one- to two-page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your bar and grill  
• Provide a summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started and provide a timeline of milestones your company has achieved.

You may not have a long company history if you are just starting your bar and grill business. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company or been involved in an entrepreneurial venture before starting your bar and grill company, mention this.

You will also include information about your chosen bar and grill business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is a crucial component of a bar and grill business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the bar and grill industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and, if applicable, how do these trends support your company’s success)?

You should also include sources for your information, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a bar and grill business’ customers may include:

• ​​ Business professionals in their 30s and 40s who are looking for a happy hour spot after work.
• Families with young children who are looking for a kid-friendly restaurant for dinner.
• Couples who are looking for a romantic night out.

You can include information about how your customers decide to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or bar and grill services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or you may promote your bar and grill business via PR, events, or word-of-mouth marketing.

Operations Plan

This part of your bar and grill business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

You also need to include your company’s business policies in the operations plan. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, your Operations Plan will outline the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a bar and grill business include reaching $X in sales. Other examples include expanding to a second location, launching a new menu, or partnering with a local brewery.

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to your specific bar and grill industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here, you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs and the cost of any equipment and supplies used to deliver the product.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Bar and Grill  

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : Everything you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Bar and Grill  

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include cash flow from:

• Investments

Below is a sample of a projected cash flow statement for a startup bar and grill .

Sample Cash Flow Statement for a Startup Bar and Grill  

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your bar and grill . It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

Creating a well-crafted business plan is essential for any bar and grill owner looking to start or grow their business. This guide provides an overview of the key components of a successful business plan as well as helpful tips for putting together your own. Be sure to include detailed financial projections, information about your management team, and marketing strategy, among other important details.

A well-written bar and grill business plan is a must for any new bar owner. It’s a great tool for attracting investors and keeping the company focused.  

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