Starting a bar requires substantial capital, a tolerance for risk and an understanding of how to market your product. A bar is a potentially profitable but high-risk business. Millions of people enjoy going to bars and spending money, but there is intense competition in the industry as well as liability issues in the event that a drunk patron is injured, either on the premises or after he leaves. Prospective bar owners should be prepared for long hours and occasional stressful situations.

Step 1.

Acquire a liquor license. Depending on where you are, this can be a very expensive proposition. Some areas, such as San Francisco, have stopped issuing new licenses meaning that you must buy an existing one.

Step 2.

Apply for municipal, state and federal business licenses. The exact combination of permits that are required to start a legal business entity that serves alcohol will vary depending on your location. Be safe and have all of your licensing in place before you sink money into a location.

Step 3.

Lease, rent or buy a high-traffic location. An accessible and appealing location is critical for the success of a bar. Look for a venue that's close to other attractions, such as a theater district, waterfront or sports stadium, to take advantage of related foot traffic.

Step 4.

Hire reliable staff and train them thoroughly in their various duties. Emphasize the importance of consistent drink mixing for inventory control and customer satisfaction. Also train your staff to recognize people who have had too much to drink and instruct them to be consistent in refusing to serve over-indulgers.

Step 5.

Maintain comprehensive liability insurance to protect your business from insurance claims.

Step 6.

Keep your business location clean and tidy. A bar that gets a reputation as a grungy or unsafe place to be is going to lose business or attract the kind of clientele that you don't want.

Step 7.

Identify your target customers and build a brand and reputation to attract them. Specialize your business in a niche market, such as a sports bar catering to young males, a quiet bar for older clientele or a party bar with loud music that attracts college kids. Supply food, drinks and decor that are appropriate to your clientele. For example, sports and college bars might call for nachos, beer and large-screen TVs while a bar that caters to an older clientele might offer hors d'oeuvres, martinis and leather couches.

Step 8.

Market your new bar in venues that are frequented by the demographic you want to attract. Campus newspapers are effective and relatively low-cost places to solicit college students. Older and wealthier clientele can be appealed to through community newspapers, banner ads on local websites and a TV spot during the nightly news.