The bar and the nightclub business always see huge profit margins. In the year 2019, the business clocked in the phenomenal growth of 1.4% which means that this business has a lot of contribution to the annual GDP of the economy of the country. But does the owner of the bar also garner good returns from this business? To figure out this problem, let us have a look into the costs incurred in opening and managing a bar and then we can conclude whether opening a bar is a good idea or not and whether the bar manager makes bar profit margins.
How much does opening and operations of a bar cost and how to Increase Bar Profit Margins?
The average cost of opening a bar is around $4,50,000 and the cost of running the bar after opening it for the first year would cost the owners of the business around $7,20,000. The business cost is given only for the first year because, in the first year, you would have to invest a lot of money in renting or buying the premises to set up the bar, hire staff and obtain the licenses and paperwork necessary for opening a liquor shop. After the first year, the cost of running a bar per month is around $24,000.
The cost of running the bar includes the cost of alcohol, the wages of the staff, the cost of license renewal, the rental cost of the premises or the property tax and other insurance charges. To manage all these costs you need the best inventory management system so that the costs that are borne by the company are updated, therefore you need to get in touch with BNG POS to get the best inventory management software for your bar.
How much profit does a bar owner make from the business?
A bar owner’s yearly profit is calculated from the annual profit margin of the bar. As per studies, the average profit margin of the bar owners per year is about $27,000 and that makes the yearly profit of a bar owner ranging from $3,30,000. Out of that if the average expenses are deducted then still it leaves a profit of around $40,000 for the bar owner. Based on this number, the business of opening and operating a bar leaves an owner with a profit margin which is 14-15%. Therefore, opening a bar could be considered a profitable business venture.
Reasons why you should open up a bar
● Bars are the places where people come in to relax and let their hair down for a while. Therefore, it leads to high business generation and owners can expect a high high-profiting.
● If you are opening your own you are creating job opportunities for people. If your staff knows how to sell the staff, then your business can skyrocket in no time.
If you have invested in the best software to control your inventory, then you can start the bar business and earn huge profits from it.