A wine bar is a bar or small restaurant where wine is the main drink available; a characteristic feature of many standard wine bars is a wide selection of assorted wines available by the glass. Some wine bars are profiled on wines of a certain type of origin, such as Italian wine or Champagne.
The market size of the wine bar sector in the United States reached 1.73 billion U.S. dollars in 2020, reflecting a decrease over the previous year’s size of 2.39 billion U.S dollars. The market was forecast to reach 1.93 billion in 2022. The number of businesses in the wine bar sector in the United States was 1,546 in 2020, down from the previous year’s total of 1,723. In 2022, the number of businesses in this sector was forecast to reach 1,595.
Steps on How to Start a Wine Bar Business
Table of Content
Conduct Market Research
It is important to note that starting a wine bar business requires reliable market research to be able to maximize profits from the business. Please note that the first step in the market research process for your wine bar business is to develop market-based research questions in line with your overall business goal and objective.
In this regard, you should source for information that will help you maximize your business, information that will give you reliable data of what your potential market will be looking out for from a wine bar business and also help you operate your wine bar business with less stress.
a. Who is the Target Market for Wine Bar Business?
If you are thinking of opening a wine bar then you should make target demographics all-encompassing. It should include corporate executives, socialites, students, entrepreneurs, tourists, celebrities, and every adult in the neighborhood where your wine bar will be located.
b. Is Wine Bar a Profitable Business?
Yes, the wine bar business is very profitable and the industry is worth over 1.73 billion U.S. dollars.
c. Are There Existing Niches in the Industry?
No, there are no existing niches when it comes to wine bars because wine bar is a niche idea in the bars and nightclubs industry;
d. Who are the Major Competitors?
- Veritas Wine Room
- Caveau Wine Bar
- Beckrew Wine House
- Ça Va
- Bar Covell
- The Ten Bells
- Tastes of The Valleys
- MJ’s Wine Bar
- Southeast Wine Collective
- C’est le Vin
- Fig & Thistle
- Kazimierz World Wine Bar
- Purple Cafe & Wine Bar
- Dickson Wine Bar
- Aldo Sohm Wine Bar
- Bar Avignon
- Bar Covell
- Crush Wine Bistro & Cellar
- Cadet Wine
- Camerata at Paulie’s.
e. Are There County or State Regulations or Zoning Laws for Wine Bar Business?
Of course, there are county and state regulations and zoning laws for wine bars in the United States. Please note that the primary Federal law governing alcohol policy is the 21st Amendment, which repealed national prohibition. It also gives individual States control over whether to allow importing and the sale of alcohol in the State.
f. Is There a Franchise for Wine Bar Business?
Yes, there are franchise opportunities for the wine bar business. Here are some of them;
- Sea Legs Wine Bar – Investments: $591,900
- WeOlive – Total Investment: $215,000-$387,100
- WineStyles Tasting Station – Total Investment: $230,500-$475,5000
- The Vine Wine Bar – Initial Investment – $186,950 – $312,200
- Society Wine Bar – Initial Franchise Fee – $45,000
- The Wine Loft Wine Bar – Investment Range: $200,000 – $650,000
- Wine Not International, Inc. – Investment Range: $9,500 – $9,500
- PJ’s Coffee and Wine Bar – Investment – $300,001 – $400,000
- The Grape – Liquid Capital Required: $875,000 – $1,200,000
- Water 2 Wine – Investment – $167,500 – $548,650.
g. What Do You Need to Start a Wine Bar Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- A Good Bar facility
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Suppliers of different brands and types of wines
- Startup Capital
Memorable Wine Bar Business Names
- Village Square© Wine Bar, Inc.
- Night Life® Wine Bar, LLC
- Lucas© Wine Bar, Inc.
- Wine Nets® Wine Bar, Inc.
- Bob Robinson™ Wine Bar, Inc.
- Wine Lovers™ Wine Bar, LLC.
- The Choice© Wine Bar, LLC
- Jonny Mover® Wine Bar, Inc.
- Eagles Nest© Wine Bar, Inc.
- Tic Tac© Wine Bar, Inc.
- John Anderson® Wine Bar, LLC
- Bruno Mantel® Wine Bar, LLC
- Allen World™ Wine Bar, LLC
- Wine Spot© Wine Bar, Inc.
- Benson Ric® Wine Bar, Inc.
- Mario Gomez™ Wine Bar, Inc.
- Men’s Club™ Wine Bar, Inc.
- Al Capone© Wine Bar, Inc.
- El Classico® Wine Bar, LLC
- Rob Dickson™ Wine Bar, Inc.
Register Your Business
a. What Type of Business Structure is Best for Wine Bar?
There are several options when it comes to the business structure of a wine bar, but the one that most players consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits. Please note that an LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Wine Bar Business?
- General Business License
- Health and Safety Permit
- FSSAI license
- Liquor license
- Health and trade license
- Lift clearance license
- Zonal Permits
- Signage Permit
- Operational State Facility Inspections
- A live entertainment license if you want to provide entertainment such as live musicians or offer dancing or karaoke.
- A music license if you want to play live, recorded, or streaming music in your wine bar
- A dumpster placement permit that specifies where you can put your dumpster outside your wine bar
- A valet parking permit if you plan to offer valet parking for customers
- Sidewalk permits if you plan to offer outside seating
d. What Type of Certification is Needed to Open a Wine Bar Business?
You don’t need any certifications to open a wine bar business.
e. What Documents are Needed to Open a Wine Bar Business?
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering opening a wine bar business, usually you may not need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Wine bar Business?
There is no clear-cut startup cost for a wine bar, but available data shows that the cost of a small to medium wine bar can range from $50,000 to over $300,000.
b. What are the Costs Involved in Starting a Wine Bar?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $1,300.
- Marketing, Branding and Promotions – $1,000.
- Business Consultant Fee – $2,500.
- Insurance – $1,400.
- Rent/Lease – $75,000.
- Other start-up expenses like phone and utility deposits ($1,800).
- Operational Cost (salaries of employees, payments of bills et al) – $30,000
- Start-up Inventory – $25,000
- Store Equipment (cash register, security, ventilation, signage) – $1,750
- Furnishing and Equipping the Bar – $30,000
- Website: $600
- Opening party: $3,000
- Miscellaneous: $2,000
c. What Factors Determine the Cost of Opening a Wine Bar Business?
- The size of the wine bar
- The choice of location
- The required licenses and permits
- The type of facility
- The type of wines and related products retailed in the bar
- The cost of hiring and paying a business consultant and attorney
- The cost for branding, promotion, and marketing of the wine bar
- The cost for furnishing and equipping the wine bar
- The cost of insurance
- The cost for registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost of the grand opening of the wine bar business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
It is not compulsory to build a new facility for your wine bar business, but if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.
e. What are the Ongoing Expenses of a Wine Bar Business?
- Supplies (inventory expenses)
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Salaries of employees
f. What is the Average Salary of your Staff?
- Bar Manager – $45,000 Per Year
- Accountant – $32,630,000 Per Year
- Barman – $30,800 Per Year
- Waiters, and Waitresses – $28,100 Per Year
- Cleaners – $25,000 Per Year
- Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Wine Bar Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Al Capone© Wine Bar, Inc. is a neighborhood wine bar that will be located in a centralized area between a residential neighborhood and a busy business district in downtown Asheville, North Carolina. We are aware that North Carolina is one of the states that allow individuals to operate wine and liquor stores which is why we have decided to open our wine bar in Asheville. We have been able to secure a 10,000 sq. ft. facility for our wine bar as required by the law in the United States of America.
b. Products and Service
- Alcoholic and non–alcoholic wines
- Non–alcoholic beverages
c. Mission Statement
Our mission is to establish a wine bar business that will make available all the brands of wine in the United States and other parts of the world at every given time to our customers, and a place where people can network and socialize.
Our vision is to establish a standard and secured wine bar in Asheville, North Carolina that will be the melting pot of all lovers of wine.
d. Goals and Objectives
The goals and objectives of a wine bar business are to provide a retail outlet where patrons can go to relax, network, buy and drink different types of wine.
e. Organizational Structure
- Bar Manager
- Bartender, Waiters, and Waitresses
- Security Guard Security Guard
a. SWOT Analysis
- Ideal location for a wine bar business
- Highly experienced and qualified employees and management
- Access to finance from business partners
- Availability of different types of wines.
- Reliable and efficient inventory management system.
- Financial constraints may restrict the publicity and branding of the business
- A new business that will be competing with well-established wine bars in the city.
- Inability to retain our highly experienced and qualified employees longer than we want during the teething stage of the business.
- A rise in the number of wine lovers within our market space
- Online market, new services, new technology, and of course the opening of new markets.
- The arrival of a new wine bar within our market space
- Economic uncertainty
- Liability problems
- The U.S. Food and Drug Administration (FDA) could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses like ours.
b. How Do Wine Bars Make Money?
Wine bars make money by selling the following products;
- Alcoholic and non-alcoholic wines
- Non-alcoholic beverages
c. Payment Options
- Payment with cash
- Payment via credit cards
- Payment via check
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Introduce your wine bar business by sending introductory letters alongside your brochure to households, gyms, schools, socialites, celebrities, and other key stakeholders throughout the city where your wine bar business is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business to give your business an online presence
- Directly market your products.
- Join local wine bar associations for industry trends and tips
- Provide discount days for your customers
- Advertise your business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Product?
The industry standard is to mark up a bottle of wine between 200 to 300 percent over its retail sales price. Thus, if a high-end wine retails for $20 at a wine bar, it is likely to sell for $60 to $80 at a restaurant. For rare, expensive, or specialty wines, the markups could be as high as 400 bars.
b. How Much Profit Do Wine Bar Owners Make a Year?
It depends, but available reports show that on average, a wine bar in a less desirable location or state will make up to $70,000 annually. Other businesses can make between $100,000 to $150,000 on average. Estimates suggest the revenue of the average bar is between $25,000 to $30,000 per month.
These estimates are based on certain assumptions: An average price of $8 for drinks, $6 for appetizers, and $13 for mains. Your profits will depend on how well you run your bar and manage your operating costs.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the wine bar
- The type of wines and other drinks retailed in the shop
- The location the wine bar is covering
- The management style of the wine bar
- The business approach of the wine bar
- The advertising and marketing strategies adopted by the wine bar.
- The number of years the wine bar business is in business
d. What is the Profit Margin of a Wine Bar?
You can expect a net profit margin of around 7 to 10 percent for a wine bar. Just a little less than a standard bar. That’s because you’ll likely be selling more wine bottle retail than you’ll be serving at the bar.
e. What is the Sales Forecast?
Below is the sales forecast for a wine bar. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $420,000
- Second Fiscal Year: $650,000
- Third Fiscal Year: $1.2 million
Set Up your Shop
a. How Do You Choose a Perfect Location for Wine Bar?
- The demography of the location especially as it relates to people that drink wine regularly
- The demand for the wine and related products offered by wine bars in the location
- The purchasing power of businesses and the residents of the location
- Accessibility of the location
- The number of wine bars in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Wine Bar?
- Washington, D.C.
- Scottsdale, Arizona
- Portland, Oregon
- Asheville, North Carolina
- Las Vegas, Nevada
- Los Angeles, California
- New York City, New York
- San Francisco, California
- Washington DC
- Chicago, Illinois
- Dallas-Fort Worth, Texas
- Atlanta, Georgia
- Boston, Massachusetts
- Palm Beach, Florida
c. What Equipment is Needed to Operate a Wine Bar?
Before you can open a wine bar, you should budget and buy chairs and tables, POS and receipt issuing machines, storage hardware (bins, rack, shelves, food case), counter area equipment (countertop, sink, ice machine, etc.), (Flat Screen TVs, sound system, DVD players,
Satellite dish and decoder, furniture (table, stools, and sofas), telephones, filing cabinets), store equipment (cash register, security, ventilation, signage), serving utensils (plates, ashtrays, glasses, flatware) and fancy lightening amongst others.
When it comes to hiring employees for a standard wine bar, you should make plans to hire a competent shop manager (you can occupy this position), account clerk, barman, waiters and waitresses, cleaners, and security guard.
Launch the Business Proper
In recent times, no wine bar opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the wine bar, you will be able to inform people in your city that your wine bar is open for business.
a. What Makes a Wine Bar Business Successful?
- Choose a good location and shop facility to launch the business
- Make sure your shop is stocked with different brands of wines (give your customers options)
- Throw a grand party before officially opening the wine bar business
- Be deliberate with your marketing sales approach
- Encourage the use of work of mouth to promote your wine bar business
- Leverage on all available online and offline platforms to promote your wine bar business
b. What Happens During a Typical Day at a Wine Bar?
- The shop is open for the day’s work
- The serving area, bottles of wine, serving wares, chairs, and tables are properly arranged
- Walk-in customers are attended to
- Deliveries of orders are made
- Stocks are taken and reports are written and submitted
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Wine Bar Business?
- Excellent customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining skill
- Work experience in a wine bar environment
- Experience in managing people
- Experience in business administration
- Experience in identifying different types of wines.