- By Check-a-Salary
- Posted Monday 04
th July 2022
A bar or any other business in the line of selling alcohol can be a handsomely-rewarding venture. In most cases, however, one of many significant challenges lurks as far as the economics perspective is concerned.
Successfully owning and running a nightclub, brewery, tavern, or pub can be downright costly. The initial investment and the ongoing costs might require a sizable capital, prompting you as the business owner to seek extra funding.
But how do you go about securing funding for a bar, brewery, or other alcohol-selling business? Read on for some options!
Things to Consider Before Seeking Funding
Understand Your Legal Requirements
As with any other venture, starting an alcohol-selling business requires you to get a liquor license and acquire other permits and documentation that make it legitimate and legal. It also requires you to choose a location where such businesses are not prohibited, such as near schools, places of worship, and so forth.
Depending on the type and scale of your business, you may also have to submit a brewer’s notice, obtain a liquor license, and register with the tax and trade bureau.
Figure Out Your Startup Costs
The major hurdle for managing whether a bar or a brewery is the startup cost. These costs may encompass anything from documentation to wages, supplies, and real estate costs.
If you are looking to fund a brewery then you have to strike a balance between what’s important and what’s not. By this, it means redefining your priorities.
Don't Forget Permits, Licensing, and Insurance
These must be factored in as they’ll help to protect you, your investment, and most importantly, your employees. These papers will ensure compliance with the authorities and must be acquired before opening your doors to your customers.
Funding Options to Consider
While it’s a lucrative business, not so many people realise the amount of money required to successfully operate a bar or a nightclub. To be on the safe side, you require a substantial amount to get things moving. Here are some funding options that exist today.
For ages, crowdfunding has been used to help entrepreneurs realise their dreams of business ownership. In this day and age where you need to provide your financier with your credit report, crowdfunding helps eliminate such hassles.
Consider an SBA Loan
Small Business Association (SBA) loans are available in a variety of options with flexible repayment terms. They are ideal for this particular venture because of their low-risk nature.
Additionally, they attract low-interest rates.
Getting a bank loan is one of the best ways you can seek financing for a bar startup. With the government guaranteeing to shield you from some risks, you have every reason to consider such a loan.
Finding the right investors for your business startup is worth exploring. With an investor, you’ll have to agree on the take-out amount on their total capital. With this funding option, you’ll have in so many ways mitigated the risks involved with conventional bank loans such as high-interest rates and defaulting.
Consider Equipment Financing
If you are not able to secure any of the above funding options for your bar or pub startup, then it’s worth considering equipment funding. You’ll require a lot of equipment to successfully run your establishment.
The other benefit of equipment financing is that the purchased equipment will act as collateral.
This, therefore, means that you have more options to raise the remaining capital from elsewhere.
It has never been an easy road sourcing for funding to start any type of business and the alcohol selling business is no exception. Nevertheless, it’s worth trying out some of the above options before you throw in the towel.
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