What is a wine lover to do when local vineyards are scarce? Frequent the local wine bar! Wine bars provide an opportunity to taste-test various wines, buy premium bottles and socialize in a particular type of atmosphere.
If your local area does not have a wine bar, why not start one yourself? Of course, opening a wine bar costs money, and one of the first things you will need to do is create an in-depth budget to plan out your finances. Such a well-organized budget can come in handy when applying for a loan, and it also ensures you get the proper amount.
When considering starting a wine bar, here are some of the costs and fees you will need to take into account. Because prices can vary so widely, do specific research for your area and fill in estimated costs on a budget spreadsheet.
Obtaining Business Licenses
First and foremost, you will need to register your business with the local government for tax purposes and get an Employee Identification Number (EIN) for tax forms. You will also be issued with a business license or permit.
Due to the nature of your wine bar business, you will need a liquor license as well. And if you want to offer snacks, you will need to explore the various local requirements that govern food service permits. Want to get around this with a vending machine? Not so fast — those require permits as well.
In fact, you even need a license for the music that you want to play over your sound system to create ambiance, and if your bar incorporates entertainment like a pool table or arcade games, you will need to license those as well. Study local business permits thoroughly so that you know what you need to do to make your operation legal. It is safe to say that local governments tax pretty much anything that can bring you revenue.
Real Estate for Starting Your Wine Bar
Next, you need to figure out a great location for your wine bar. You will want to find real estate in an area already frequented by your target audience, such as an upscale downtown area or up-and-coming suburb. You want to be accessible to people who have extra money to spend on fine wine and a night out.
The real estate itself represents a huge chunk of your start-up budget in the form of a down payment and a monthly fee. But there are some hidden fees too. You will need an occupancy permit to demonstrate that the local government has deemed your building safe. And do not forget about property taxes, or you are in for a big surprise in the spring.
Finally, you also need to consider whether the space you have bought needs to be remodeled to turn it into your dream establishment. It might make sense to tear down the existing structure and build something new. Or, maybe you just need to make minor tweaks to the space. Either way, buying a turn-key wine bar is rare, so be prepared to budget for renovation and remodeling.
Alternatively, if you do not have the capital for a large down payment to purchase real estate, you will want to consider renting or leasing. For a commercial lease, you can still generally modify the building to suit your needs as a wine bar.
Furnishing the Space
Once the wine bar has been remodeled and looks beautiful with new floors, a fresh coat of paint, nice bathrooms and functional utilities, you still need to fill it with furnishings. There is also wine storage to consider, the bar itself, stools, glassware, tables and chairs for patrons.
Decorations will add to the unique charm of your wine bar. And do not forget important factors like the cash box or safe, a POS system along with a way to accept credit card purchases, plus more mundane things like cleaning equipment and a first-aid kit.
Monthly Utilities Cost
Now that your wine bar has started to take shape and is ready to operate, you will be running electricity on a daily basis. The water will be used regularly for cleaning, flushing toilets and washing hands. In the winter, you might need to use natural gas to power your heating system. And do not forget trash and recycling pick-up.
All of these bills will be issued on a monthly or quarterly basis, so you need to budget for these costs as well. Remember, fuel costs vary considerably based on your location, so when you do research for cost estimates, contact the local energy and water companies to be as accurate as possible.
Another factor to consider is the size of your wine bar, as this directly affects how much energy it takes to keep it cool in summer and warm in the winter. The smaller the square footage, the lower your bills. It is great to be optimistic about how busy and popular your wine bar will be, but be sure to weigh that against the costs associated with maintaining a larger space.
Staffing Your Wine Bar
You simply cannot run a wine bar by yourself. You need staff, but you also need people with certain talents and experience. You might be able to provide some hands-on training to people new to the wine and bar industry, but the best people already have experience with different types of wine and confidence in their interactions with customers.
Luckily, the food and beverage industry is a unique industry with regards to wages. A competitive wage in this industry does not cost you much, as bartenders, servers and bussers generally make a majority portion of their pay in tips. As long as you have customers coming through your doors and a top-notch operation, you can maintain quality employees for as little as less than $3.00 per hour.
Check with your state and local laws regarding minimums, but be sure to compensate for the position. Often bartenders will make a higher hourly wage than servers, say $5.00, and bussers might make even more, like $7.00, to compensate for their smaller portion of tip out. Kitchen staff and management, however, will need to be paid competitive wages to maintain the highest quality staff.
You also need to have enough staff to provide a great experience for each of your guests. During wine tastings, people love individualized attention. It may take some trial-and-error to determine how many team members are needed to ensure a smooth operation, while also giving everyone enough hours and a chance to have a couple of days off each week.
You can do some market research by talking to other people who own wine bars similar in size to the one you want to open. These people can prove to be invaluable mentors, so it is worth forging a non-competitive relationship when you can. How many staff members do they have? What types of positions are filled? What kind of experience and certification has proved beneficial for each of those positions? You can also ask your mentors about outsourcing certain types of administrative tasks, like accounting and marketing.
Buying Inventory for Your Wine Bar
We have already discussed so many aspects related to starting a wine bar, but have yet to mention the critical stock you must have on hand at all times: wine! Purchasing your start-up inventory and then maintaining and diversifying that inventory represents a substantial part of your budget.
Many people like to visit wine bars because they can sample more expensive types of wines for a fraction of the cost of a full bottle. They are also popular venues for engaged couples looking for a wine to serve at their wedding, and for other groups looking for something interesting to do together. This means much of your clientele will not be interested in cheap wine. They will be prepared to spend a little extra for a special occasion.
Of course, offering expensive wine requires you to purchase expensive wine. This does not mean your entire repertoire needs to be out of budget for the average patron, but it does mean that you want to have some classy wines in stock alongside wines that appeal to other budgets. You will spend the most money on your wine inventory when you make your initial purchase.
After that, the restocking costs will be a less painful blow to your wallet because you only buy what you need to replace that your clients have bought. And, unopened wine that stays on the shelf certainly does not go bad!
Logo Design and Branding
Now that you have all the physical necessities of a wine bar accounted for, it is time to consider your marketing strategy. This is how you get the word out about your wine bar to get people in the door. Once they step foot inside, it is up to you and your staff to provide an excellent experience to encourage repeat customers and great testimonials.
But your marketing efforts begin with branding and logo design. A logo will appear in so many places: your shop window, signage, your website, custom mugs or wine glasses, custom labels, napkins, t-shirts, hats, pens, billboards, bumper stickers, phone cases, beach towels... the point is, you can slap a logo on virtually anything these days. Some make more sense than others, depending on your business.
But wherever it appears, you need a logo that truly represents your style and vibe in order to accurately convey your brand message. Are you hip and trendy or exclusive and upscale? A great graphic designer can create a logo that translates that message into a beautiful image, but you will need to set aside upwards of several hundred for the best of the best.
Web Presence and Digital Marketing
With nearly everyone carrying a powerful computer around with them these days, you have plenty of digital avenues to pursue to try to reach potential customers and invite them to visit your wine bar. And it all starts with a web presence: A professionally-designed website builds trust in your brand and provides potential customers with critical information. The keyword here is professional — you will certainly get what you pay for in this arena.
But digital marketing is more than just making sure your website looks good. Search engine optimization, or SEO, helps your website show up on search results pages when people type in keywords or phrases.
You definitely want to appear in at least the top three results for search queries like "wine bar in [your town here]" or "best wine bar in [your region here]". That is because searchers often do not scroll past the first page, never mind click beyond the top three results. This requires strategy and analytics that easily translate into many labor hours, so you will want to consider hiring someone to do this for best results.
An engaging social media presence also plays a role in building trust among your target audience and serves as an excellent channel for engaging with your target market. And if you receive guidance from a social media marketing professional, you might be able to handle your social media posts on your own. There are also paid advertisements that you can take advantage of on these channels, and for best results, an expert is well worth it. In short, you need a digital marketing budget if you want to attract people to your wine bar.
Traditional Advertising and Marketing
Finally, your budget needs one more section for marketing. This time, it is for traditional advertisements that do not occur in a digital sphere. Consider placing advertisements in newspapers and magazines, creating flyers, sending snail mail or purchasing space on a billboard. The strategy you choose depends a lot on your target audience and the types of advertisements they typically respond to.
Hiring an agency that specializes in traditional advertising and market research can offer a great advantage to your overall strategy, especially as you launch your wine bar business. Do not worry about doing every little thing yourself — as long as you budget for outside marketing help along with each of the items above, you will have a great time starting a wine bar.
Cathy Habas specializes in marketing, customer experiences, and behind-the-scenes management. Cathy has contributed to sites like Business and Finance, Business 2 Community, and Inside Small Business. She served as the managing editor for a small content marketing agency before continuing with her writing career.