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You’ve chosen your bar name, developed your unique branding, and found your dream location. Before you can celebrate your grand opening, there are still a few technicalities to work out.
Prior to legally serving your customers, you need to obtain a number of bar permits and licenses. Without these, your business faces the risk of fines or even closure.
Although regulations vary from state to state, the general overview of the restaurant permits and licenses necessary to open your bar remains the same.
What Do You Need to Open a Bar?
1. Business License
To open a legal business in the United States, you need a business license.
As a business selling liquor, you’ll need to obtain a federal business license from the Alcohol and Tax and Trade Bureau (TTB) and a state business license. State licenses will vary depending on the location of your bar.
How to Get a Business License
To obtain a bar business license from the TTB, apply via their website and follow the application process.
To obtain a state license, you’ll need to research your state and its licensing procedures on Google. Simply search for your state + bar business license and follow the application process on the related government website. Make a note of renewal dates, as these vary between each state.
How Much Does a Business License Cost?
There’s no fee to apply for or maintain a bar business license from the TTB.
The registration cost of a state business license is around $50. Additionally, there’s the fee of the actual business license, which can cost between $25 and a couple of thousand dollars, depending on where you’re located and your projected profit.
2. Employer Identification Number
All businesses require an Employer Identification Number (EIN) to legally operate within the US. You’ll also need this to apply for a bar business license.
An EIN is essentially a tax number that’s issued by the IRS to help to identify your business. The good news is that once issued, an EIN never expires. You may need to wait up to a couple of weeks to receive it.
How to Get an Employer Identification Number (EIN)
You can obtain an EIN online via the IRS, or by phone, mail or fax.
How Much Does an EIN Cost?
It’s free to get an EIN.
3. Certificate of Occupancy
Once you’ve secured your bar’s location, you’ll need to obtain a Certificate of Occupancy. This requires an inspection by your local government to verify that the building is safe for customers.
How to Get a Certificate of Occupancy
Each local government has varying jurisdiction. To start the process of obtaining a Certificate of Use and Occupancy, research your local government’s website and follow the steps shown online.
How Much Does a Certificate of Occupancy Cost?
The cost depends on where your bar is located and can be based upon several factors, including the overall square footage of the building. Typically, it will cost somewhere between $100 and $200.
4. Liquor License
Alcohol is the staple of your bar, so you’ll need a liquor license to legally sell these beverages. Depending on what type of liquor you serve, you may need to obtain a beer and wine license alongside your liquor license. This is for bars who don’t sell hard liquor, such as whiskey or gin. If your bar is selling beers, wines, and spirits, you’ll likely be granted a tavern license.
You can find out more about the types of liquor licenses and how to obtain them here.
How to Get a Liquor License
Your state’s Alcohol Beverage Control Board (ABC) grants liquor licenses. You may need to apply to both your state and your county or town depending on where your bar is located.
It’s best to apply for a license as soon as you can, as the application process can take up to six months. Search for your local ABC board online and research the steps you need to take before applying.
How Much Does a Liquor License Cost?
The fee for a liquor license can range anywhere from $12,000 to $400,000. This includes a processing fee and cost of application. Renewal fees can cost the same amount.
5. Resale Permit
A resale permit enables your business to purchase wholesale products without paying sales tax. When you use these products to make items for resale (beverages), the tax is passed on to the customer at the point of purchase. These taxes are then collected by you and submitted to your local state either monthly or quarterly.
How to Get a Resale Permit
Acquiring a resale permit depends on your state and your total annual sales. Search resale permit + your state in Google and follow the instructions on your local government’s website.
How Much Does a Resale Permit Cost?
In some states, it’s free. You’ll also need to check for your local sales tax rate.
6. Signage Permit
A sign is a key part of your bar branding and marketing efforts. But you need to obtain a signage permit from your local government. The requirements vary regarding the size of your sign, how it’s displayed, and your location. If you rent your building, you may have extra specifications to consider.
How to Get a Signage Permit
Once you have approval from your landlord, apply for a signage permit from your local government. Search for signage permit + your city in Google and follow the instructions online.
How Much Does a Signage Permit Cost?
A typical signage permit costs between $20 to $50 per sign.
7. Music License
Music is an integral part of your business. It sets the tone and atmosphere for your bar. Before you can play music or hire a DJ, however, it’s important to get a music license. As songs are protected by copyright, you can face financial penalties without having a license in place.
How to Get a Music License
Music licenses are normally obtained from performing rights organizations, such as Broadcast Music Inc (BMI), The American Society of Composers, Authors and Publishers (ASCAP) or The Society of European Stage Authors and Composers (SESAC). Alternatively, you can obtain licensed music from a business streaming service.
How Much Does a Music License Cost?
The cost of a music license often depends on the type of recording you play, how many nights you play it, and which organization or platform you choose. Performing rights organization fees normally start from $500 annually.
8. Live Entertainment License
Live events like holiday celebrations or singles nights can bring more customers through your doors. If you’re planning on hosting a fun live experience, you’ll need a live entertainment license.
If you’re opening a sports bar and plan on showing live games on the big screen, you’ll also need a commercial TV package as these events are copyright protected. There are some copyrighted material exceptions depending on the size of your bar. For example, if you were to show the Super Bowl on television and the overall area of your bar is less than 3,750 square feet, you’re unlikely to be able to have more than four televisions in total.
How to Get a Live Entertainment License
Your local state licensing authority is responsible for granting live entertainment licenses. If you’re planning on holding a live music event, you’ll still need to obtain an entertainment license alongside a music license.
If you plan on showing live sports events, sign up for a commercial TV package and research the stipulations for copyright for bars and restaurants to ensure you comply.
How Much Does a Live Entertainment License Cost?
The cost depends on your city and state. Your bar’s maximum capacity can also be a factor. If your local government license requires you to have a public hearing beforehand, this will cost extra and can depend on whether events will be indoors or outdoors, as well as the date and time.
Restaurant inspections can be time-consuming and frightening. Learn how to prepare and avoid the fear of failing an inspection.
9. Food Service License
As a business preparing and selling food and drink, you want to ensure the safety of your customers. Your local health department has its own inspection process to make sure that you are meeting health regulations. Once you’ve been granted a food service license, regular inspections will be made to check that your bar is continuing to maintain good health and safety standards.
How to Get a Food Service License
Your local health department will issue you a license once an inspection has taken place and you show that you meet their requirements. These vary between states, so do your research before applying.
You’ll also need to give the name and address of your bar, in addition to the owner’s personal details. If a change of ownership or physical location occurs, you may need to renew your license.
How Much Does a Food Service License Cost?
The cost is usually between $100 and $1,000, depending on your location, number of employees, and the size of your bar.
10. Food Handler’s Permit
Alongside getting a food service license for your building, you’ll need a food handler’s permit for your employees. This is a legal requirement to ensure your staff are aware of sanitation procedures, food and drink preparation, and handling. Your local health department will issue a permit once your employees pass a training course through a program like ServSafe.
How to Get a Food Handler’s Permit
Search for your state + food handler’s permit in Google to find the application process for your local government.
How Much Does a Food Handler’s Permit Cost?
The fee varies between states. Usually, it costs between $100 to $500.
11. Building Health Permit
As your bar is selling beverages and possibly food to customers, you’ll need a building health permit. This proves that your business complies with sanitation regulations. Generally, a building health permit is needed for new constructions, but this depends on your county or state.
How to Get a Building Health Permit
A health permit is usually obtained at the same time as a business license. Not every state requires one, so check with your local health department.
How Much Does a Building Health Permit Cost?
Depending on your building’s location and age, a health permit can cost between $50 and $1,000.
12. Seller’s Permit
A seller’s permit or sales tax license helps to identify your bar for tax reasons. As you have a business that’s selling goods, you’ll need to obtain a seller’s permit alongside a resale permit.
How to Get a Seller’s Permit
You can obtain a seller’s permit by registering your business with your local government. You can do this online, via phone or in-person.
How Much Does a Seller’s Permit Cost?
It’s free to apply for this permit, but you may need to pay a security deposit. In the event that your bar closes and you have unpaid taxes, the total amount will be taken from your deposit.
13. Pool Table License
If you plan on opening a sports bar, you’ll no doubt want a pool table. In some counties and states, a pool table license is required, which will determine the number of pool tables you have as well as the operating times.
How to Get a Pool Table License
To discover if your local area requires you to have a license, simply Google your county + pool table license or billiards permit.
How Much Does a Pool Table License Cost?
A cost of between $10 and $15 is typical of an annual pool table license.
14. Fire Department Permit
Before you can open a bar in some states, a fire department permit is required. This will verify safety procedures in the event of a fire, such as the number of fire extinguishers, unobstructed exits, and smoke detectors you need. The fire department will also notify you of the maximum number of patrons your bar can safely hold.
How to Get a Fire Department Permit
Contact your local fire department to determine if you need a permit.
How Much Does a Fire Department Permit Cost?
The cost will depend on your state and the size of your bar.
Licenses and Permits Across the USA
As you’ve seen from this guide, licenses and permits for bars vary across states. The city, county or state where your bar is located largely determines your license requirements and the fees you pay.
Research your state’s website to discover which licenses and permits are required before opening. Also, ensure that any licenses and permits you hold are current, as the renewal process is often easier than the initial application.
Here are some tips for obtaining licenses and permits in New York, California, and Florida. These sections show a few examples of what’s needed, and are not the full list.
Getting Bar Licenses and Permits in New York
If you’re considering opening a bar in New York, you’ll need to apply for a new liquor license and a food service establishment permit, even if you only plan on selling drinks.
Business location is a major factor for obtaining a liquor license in New York. According to the NYC government website, your bar will need to be “at a legally required distance from a school or place of worship.”
Getting Bar Licenses and Permits in California
To start a bar in California, you’ll first need a business license. Since you’re also going to be selling beverages, you’ll require a health permit. You can find out which licenses and permits you need online via the Governor’s Office of Business and Economic Development.
Getting Bar Licenses and Permits in Florida
Opening a bar in Florida requires a liquor license from the local Division of Alcohol Beverages and Tobacco.
According to the State of Florida’s Official Business Information Portal, you’ll also need to get a license from the Department of Health in addition to registering your business with the IRS, the Florida Department of State, and the Florida Department of Revenue.
Find out what other licenses and permits you may need on Florida’s Business Information Portal.
Your Next Steps
Licensing is a costly yet essential part of starting a bar business. Make sure you factor in these fees when working out your bar startup expenses, and plan well in advance to ensure you obtain everything needed in time for your launch.
Starting with a bar business plan will help you to map out every step of your business journey, from creative to deadlines to menu design.
To understand the exact bar licenses and permits you need, it’s important to do diligent research beforehand as legislation varies between states and cities, and deadlines always come up more quickly than expected.
Opening a bar is an exciting venture. While applying and securing all the licenses you need is a tiresome process, keeping your business on the right side of the law enables you to operate your bar with confidence, and saves you headaches and potential fines down the line.