How to Open a Sports Bar

Sports bars have long been popular spots for sports fans to gather to watch the super bowl or any popular game any night of the week. The sports bar industry has come back in a big way after the pandemic, worth $2 billion in the U.S.

Whether you’re in New York City, Midtown Tampa, or any town in the country, you could start a sports bar to tap into that market and have a great time doing it.

But in addition to a love of sports, you’ll need some business savvy. Luckily, this step-by-step guide has you covered with all the information you need to open a sports bar that will bring on the cheer. 

Step 1: Decide if the Business Is Right for You

Pros and cons

Sports bar industry trends

Industry size and growth

Sports bars are a segment of the bars and nightclubs industry and by itself is worth $2 billion. 

• Industry size and past growth – The U.S. bars and nightclubs industry is worth $36.4 billion in 2023, after growing 2.2% for the last five years.((https://www.ibisworld.com/united-states/market-research-reports/sports-bars-industry/))
• Growth forecast – The U.S. bars and nightclubs industry is projected to decline by a modest .3% in 2023. 
• Number of businesses – In 2022, 1,234 sports bars were operating in the U.S.((https://www.ibisworld.com/industry-statistics/market-size/bars-nightclubs-united-states/))
• Number of people employed – In 2022, the U.S. sports bar industry employed 11,654 people.

Trends and challenges

Trends

• Many sports bars have added interactive sports games such as indoor minigolf, soccer, and pickle ball.
• Sports bars are upgrading their classic bar food to offer healthy or upscale tapas and meals. 

Challenges

• More people have big screen televisions in their homes, decreasing the clientele of sports bars. 
• Staffing issues are plaguing the sports bar industry and the bar industry as a whole, making it challenging for sports bars to effectively serve customers. 

Demand hotspots

• Most popular states – The most popular states for bar managers are Pennsylvania, New Jersey, and West Virginia.((https://www.zippia.com/bar-manager-jobs/best-states/))
• Least popular states – The least popular states for bar managers are Nebraska, South Dakota, and Louisiana. 

What kind of people work in nightclubs?

• Gender – 44% of bar managers are female, while 56% are male.((https://www.zippia.com/bar-manager-jobs/demographics/))
• Average level of education – The average bar manager has a bachelor’s degree.
• Average age – The average bar manager in the US is 39.1 years old.

How much does it cost to start a sports bar business?

Startup costs for a sports bar range from $100,000 to $175,000. Costs included liquor licenses, space rental and preparation, food and alcohol inventory, and an operating budget.

You’ll need a handful of items to successfully launch your sports bar business, including: 

• Refrigerator 
• Freezer
• Grill, oven, fryer
• Bottle Cooler
• Bar Cooler
• Sinks
• Draft beer equipment
• Ice Machine
• Glass racks
• Glass washing machine
• Bar Blender
• Glassware
• Bar
• Bar stools
• Bar supplies
• Tables and chairs
• Televisions

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$100 - $500	$300
Business licenses and permits	$5,000 - $10,000	$7,500
Insurance	$100-$500	$300
Website	$200 - $1,000	$600
Initial Marketing Budget	$500 - $1,000	$750
Space rental	$5,000 - $10,000	$7,500
Space preparation and equipment includeing televisions	$50,000 - $100,000	$75,000
Food and alcohol inventory	$15,000 - $20,000	$17,500
Operating budget	$15,000 - $30,000	$22,500
Total	$90,900 - $173,000	$131,950

How much can you earn from a sports bar business?

What you charge for food and beverages will vary based on the item. These calculations will assume that the average bill per customer will be $30. Your profit margin should be about 15% after all your operating costs. 

In your first year or two, you could serve 75 customers per day, bringing in more than $820,000 in annual revenue. This would mean over $123,000 in profit, assuming that 15% margin. 

As you gain traction, sales might serve 150 customers a day.  With annual revenue of more than $1,640,000, you’d make a tidy profit of nearly $247,000.

What barriers to entry are there?

There are a few barriers to entry for a sports bar. Your biggest challenges will be:

• Funding the startup costs
• Finding a great location
• Breaking into a competitive market

Step 2: Hone Your Idea

Now that you know what’s involved in starting a sports bar, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.

Analyze your competitors 

Research sports bars in your area and online to examine their products, price points, and customer reviews.

• Make a list of sports bars that offer similar products. 
• Review your competitors’ products – their features, pricing, and quality – and marketing strategies
• Check out their online reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
• Identify your competitors’ strengths and weaknesses. 

This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.

Why? Identify an opportunity

You’re looking for a market gap to fill. For instance, maybe the local market is missing a sports bar that offers craft cocktails, or a neighborhood bar with an extended happy hour.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products

You’ll want to create a cocktail and beer menu, including draft beers, and a food menu. You could add additional revenue by offering pay-to-play games such as pool or darts. You could also sell sports bar merchandise like t-shirts or beer mugs. 

How much should you charge for sports bar products?

Your prices for various items will depend on market prices in your area, but they’ll also depend on your cost of the items. 

Once you know your costs, 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

Your target market will depend on your area, and the concept you develop for your sports bar. If you’re in a more established neighborhood, your demographic may be best found on Facebook. Conversely, if you’re in a younger trendy area, your best bets will be TikTok and Instagram. 

Where? Choose a sports bar location

You’ll need to rent out a space for your bar. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a space for your sports bar, you may want to follow these suggestions:

1. Demographics: Study the local demographics. Ensure your target audience (age, gender, income level, etc.) is well-represented.
2. Visibility: Choose a location that is easily seen by passersby. High traffic areas can help with walk-in customers.
3. Accessibility: Ensure the location is easily reachable, offers good parking, and is near public transport.
4. Proximity to Competitors: Being near similar businesses can be beneficial (it’s a known spot for your target audience) but ensure there’s enough demand for another sports bar.
5. Local Sports Facilities: Being near stadiums, arenas, or popular sports hubs can boost patronage, especially during event days.
6. Size and Layout: Ensure the space can accommodate a bar, seating, big-screen TVs, restrooms, and possibly a kitchen.
7. Lease Terms: Review costs, lease length, restrictions, and what’s included (like maintenance).
8. Safety: Review crime statistics for the area. A safe environment is key to attracting and retaining customers.
9. Growth Potential: Consider future developments in the area which could increase foot traffic or demand.
10. Licensing and Regulations: Ensure the location can be zoned for a sports bar and can meet all required licenses.

Step 3: Brainstorm a Sports Bar Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

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 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “sports bar” or “sports pub”, boosts SEO
• Name should allow for expansion, for ex: “PlayPoint Pubs” and “LeagueLounge” over “Gridiron Grub” and “HoopsHub”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

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. 

Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation. 

Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward. 

Step 4: Create a Sports Bar Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Summarize your sports bar business plan, including your concept, target audience, and financial outlook.
• Business Overview: Provide an overview of your sports bar, including its location, size, and the type of sports and events it will focus on.
• Product and Services: Detail the menu offerings, drinks, and any unique services or entertainment options like live music, trivia nights, or themed events.
• Market Analysis: Analyze the local market for sports bars, considering factors like demographics, competition, and potential demand for your niche.
• Competitive Analysis: Identify other sports bars in the area and explain how your establishment will differentiate itself, whether through pricing, sports coverage, or ambiance.
• Sales and Marketing: Describe your strategies for attracting customers, including advertising, promotions, and partnerships with local sports teams or organizations.
• Management Team: Introduce yourself and any key team members involved in running the sports bar, highlighting relevant experience in the hospitality or food and beverage industry.
• Operations Plan: Explain how your sports bar will operate daily, covering hours of operation, staffing, inventory management, and customer service.
• Financial Plan: Present financial projections, including startup costs, revenue forecasts based on expected customer traffic, and profitability estimates.
• Appendix: Include any supporting documents, such as sample menus, mock-ups of the sports bar layout, and marketing materials.

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

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 sports bar. 

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 sports bar 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. Here’s how to form an LLC.
• 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. Read how to start a corporation here.
• 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. 

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.

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.
• 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 option, other than friends and family, for funding a sports bar business. You might also try crowdfunding if you have an innovative concept.  

Step 8: Apply for Bar Licenses and Permits

Starting a sports bar 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’ll need to check with your state and local governments about liquor license, food service license, and health permit requirements. 

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.

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 sports bar 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 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 may want to use industry-specific software, such as Mr. Black, Sevenrooms, or Focus, to manage your inventory, pricing, sales, payments, and employees.

Accounting

• 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.

Create a 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 services like WordPress, Wix, or Squarespace. 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.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. 

Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Contact Now”. This can sharply increase purchases. 

Marketing

Here are some powerful marketing strategies for your future business:

1. Theme Nights and Special Events: Plan themed nights around popular sports events, such as game-day specials, jersey nights, or trivia competitions, to create a unique and engaging atmosphere.
2. Social Media Engagement: Leverage platforms like Instagram, Twitter, and Facebook to share real-time updates, promotions, and exclusive offers, fostering a sense of community among sports enthusiasts.
3. Partnerships with Local Sports Teams: Collaborate with local sports teams or leagues to sponsor events, host watch parties, or offer discounts to fans on game days, creating a mutually beneficial relationship.
4. Happy Hour Promotions: Introduce enticing happy hour deals during non-peak hours to attract customers, encouraging them to unwind and enjoy the sports experience without breaking the bank.
5. Interactive Fan Experience: Invest in interactive elements like sports trivia games, prediction contests, or fantasy sports leagues to engage patrons during halftime or slower periods, enhancing their overall experience.
6. Loyalty Programs: Implement a loyalty program that rewards customers for repeat visits, encouraging brand loyalty and transforming occasional visitors into regular patrons.
7. Influencer Collaborations: Partner with local sports influencers or personalities to promote your sports bar, leveraging their fan base to increase awareness and credibility.
8. Themed Menu Items: Create a menu that reflects the spirit of different sports seasons or major events, offering unique and themed food and drink options to enhance the overall sports viewing experience.
9. Community Sponsorships: Support local community events, tournaments, or youth sports teams to enhance your sports bar’s visibility and build a positive reputation within the neighborhood.
10. Game-Time Promotions: Offer time-sensitive promotions tied to specific game moments, such as discounted drinks for every touchdown or goal scored, creating a dynamic and interactive atmosphere during live games.

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 sports bar 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 sports bar business could be:

• Every game, every day
• Celebrate game day with craft cocktails and fine food
• Biggest draft beer selection in town

Networking

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 sports bar business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in sports 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 sports bars. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

You will lneed workers to fill various roles. Potential positions for a sports bar business include:

• Bartenders – make and serve drinks
• Wait Staff – take orders, customer service
• Servers – serve food
• Cooks – prepare food items
• Marketing Lead – create and implement marketing strategies
• General Manager – scheduling, accounting, inventory management

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 Sports Bar – Start Making Money!

Sports bars are a great place for people to interact with comrades or rivals on game day and can also be fun anytime. By starting your own sports bar, you could offer people a great experience, share in the fun, and make a good living at the same time.

You’re ready to go with your business savvy now, so roll up your sleeves and get your successful sports bar going!