![]() This number could change depending on your costs, prices, and setup. The monetary answer to this question is about $900. Your bar operating expenses may be substantially lower than they would be in a larger space, as you’ll have less to look after. In a small bar, your average bar profit is about the same as any other bar, as long as your marketing is on point. However, a good place to start is with a small location that suits your needs without breaking the bank. In the future, you might want to look into franchising and moving into larger locations. If you’re still deciding what type of bar you want to open, a good place to start is looking into a small bar. Using this formula will give you a good idea of how to manage your bar business. You can gain more knowledge and control over your profit margin on alcohol sales by understanding the liquor cost formula: Liquor Cost = (Inventory Usage ÷ Total Sales) x 100 When you’re planning out your drink costs, keep in mind things like ingredients cost (including alcohol) and the number of drinks you sell. If you can keep your liquor costs down, you’ll already be on your way to a good profit margin on alcohol sales. While replenishing your liquor cost is a constant expense, if you buy wholesale and keep your inventory organized it can be affordable. ![]() If you can manage your liquor purchasing and price per pour, you can work the profit margin on alcohol sales vastly in your favor. The main reason for the impressive average bar profit is the profit margin on alcohol sales. When compared to general retail profit margins of around 25%, bars are making bank. If those percentages sound huge, that’s because they are. The average gross profit margin is between 70 and 80%. The question of how much do bars make is more extensively answered when you look at the average profit margin of a bar. When you’re ready to get into the bar business, you’ll want to think about your business plan as much as the money you'll make. Whether your bar makes a lot of money depends on how you fit into your niche and how well you market your bar. Variables can include location, bar promotion ideas, prices, types of rum available, overall vibes, and more. The question that goes hand in hand with the question of profits is: do bars make a lot of money? The answer: it depends. However, it’s a good number to start with when asking yourself: how much do bars make? Of course, this doesn’t account for the cost of starting a bar, operating and overhead expenses-including the cost of an ongoing liquor bottle display, buying bar books, and fleshing out a bar equipment layout. This totals an annual revenue of $330,000. An average bar revenue is $27,500 a month. That question is: are bars profitable? The answer: yes. When you’re looking into opening a bar, there’s one question that is really high up there.
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