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How To Build A Financial Model For a Bar

Every business needs a financial model. Whether you want to understand what’s your breakeven, your valuation or create a budget for your bar business plan, you’ve come the right way.

In this article we’ll explain you how to create powerful and accurate financial projections for a typical 80 seats bar.

For more information on how to successfully run a bar, make sure to read our guides below:
How To Open a Bar: Complete Guide
How Much Does It Cost To Start a Bar? Costs & Examples
12 Proven Strategies To Increase Bar Sales & Profits
How to write a Bar Business Plan: Complete Guide

1. Forecast Customers

The first thing you must do to create a financial model for your bar is to forecast the number of customers you will serve over time.

Forecasting customers can be done as follows. You must set the number of:

  • Customers you expect to serve on average on a weekday
  • Customers on a weekend day instead
  • Days you are open in a week on average (for example 3 weekdays and 2 weekend days if you are open Wednesday to Sunday)
Tip: the values you enter can be set over time, for example for each year as shown in the example below.
Source: Bar financial model template

That way, you will be able to forecast accurately the number of customers you can serve over time, and so the revenues which we will now see.

Source: Bar financial model template

2. Forecast Revenue

Now that we have the number of customers, we can calculate revenue easily.

Yet, before we do so, we must break down the number of customers into the different products they may buy. Indeed, most of you customers may buy a beer at an average price of $5.50, yet some may instead buy pricier products such as cocktails for a average price of $11.00, etc.

It’s very important to break it down right. Indeed, as you know all these products have very different unit economics (prices and profit margins) you need to forecast accurately. Let’s see now how.

First, break down the products into a percentage of your total customers. For example:

  • 35% of the customers may choose to buy a beer at an average price of $5.50;
  • another 20% buy cocktails to go at an average price of $11.011
  • 15% buy a wine glass for $6.50, and so on..

That way, you can now multiply the number of customers for each product by their respective price to obtain revenue.

Now you can obtain your revenue projections broken down by the type of product as shown below:
Source: Bar financial model template

3. Forecast Expenses

In addition to the one-off startup costs discussed here, you must also budget for all the operating costs of running a bar.

We have laid out below the key expenses you can expect as well as their amount. Please note that these costs are for illustrative purposes, correspond to a hypothetical 80-seats bar and depend on a number of factors which may not be fully relevant to you.

Operating costAmount (per month)
Rent$4,000 – $5,000
Salaries$7,000 – $10,000
Inventory (COGS)$5,500
Utility bills$2,500
Admin & other$1,000 – $2,000
Total$20,000 – $25,000

Bar Financial Model

Download an expert-built 5-year Excel financial model for your business plan

Bar Financial Model

Download an expert-built 5-year Excel financial model for your business plan

Let’s break down the key costs incurred by all bar businesses below:


Unless you own the space, you need to pay rent to the landlord. The rent price depends on the property’s location, size, and condition.

Assuming an average $40 per square foot per year in a premium location of a city like Portland, you would be paying $4,600 approximately per month in rent for a 1,400 square foot space.


You need staff to keep your bar operational. The day-to-day tasks include greeting customers, creating a welcoming atmosphere, taking orders and payments from patrons, handling cash, serving drinks and meals at the table, and other essential operations. 

The number of staff depends on the size of your bar and what you plan to sell. The average annual gross salary for a bartender is around $28,000. Assuming you only offer drinks and need 3 full time bartenders, the total monthly cost can go up to $7,000 per month, excluding the manager (add another $3,000 if full time).

Inventory (COGS)

One of the most important expense for bars is inventory itself: alcohol and any other consumable used in the drinks (and potentially food) you serve. Expect to pay on average 18% to 24% in your revenues in COGS.

Assuming an average monthly revenue of $27,500, you will have to incur approximately $5,500 in COGS each month.

Utility Bills

You have to keep water, lights, gas, and music in a bar. Therefore, you have to budget for the utility bills appropriately. You can expect to pay approximately $2,500 per month on utility bills, depending on the size of your bar. 

Admin & other

In addition to the expenses above, you will have to incur expenses for support and administrative tasks such as bookkeeping and human resources (payroll).

As a reference point, accountants will likely cost anywhere from $1,000 to $2,000 per month in fees (as you will likely have a lot of small receipts to deal with, which takes more time to process).

Source: Bar financial model template

4. Build your P&L And Cash flow

Once we have forecasted revenues and expenses, we can easily build the profit-and-loss (P&L) from revenues down to net profit. This will help you to visualise key financial metrics such as Gross Profit or EBITDA margin as shown below:

Source: Bar financial model template

The cash flow statement, in comparison, needs to include all cash items from the P&L and other cash movements such as capital investments (also referred as “Capex”), fundraising, debt, etc.

Cash flow is vital as it will help you understand how much funding you should get, either from investors or the bank (SBA loan for example) to start and run your own bar.

In this chart below, we're showing you an example of a typical cost structure a 80-seats bar business would incur. Unsurprisingly, salaries, rent and COGS represent ~65% of total expenses
Source: Bar financial model template

Bar Financial Model

Download an expert-built 5-year Excel financial model for your business plan

Bar Financial Model

Download an expert-built 5-year Excel financial model for your business plan