How to Start a Beer Garden

Starting a beer garden can be an exciting and rewarding business venture for entrepreneurs who are passionate about offering unique beer selections and providing a space for people to gather and enjoy quality time.

Having said that, you should keep in mind that launching a successful beer garden requires careful planning, significant investment, and a wide range of skills.

In this comprehensive guide, we’ll walk you through all the essential steps you’ll need to take to start your own beer garden, from conducting market research and securing funding to obtaining licenses, setting up your garden, and attracting customers.

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Industry Overview

The U.S. beer market is a booming industry that was valued at over $106 billion in 2022 and which is projected to reach $154.72 billion by 2032. Growing at a steady rate of 3.80% annually, this market offers significant opportunities for aspiring entrepreneurs looking to open a beer garden.

Beer has long been a staple in Western culture, yet in recent years the market has been shaped by the rise of craft beer, health-conscious trends, and demand for diverse beer varieties, with consumers seeking unique flavors and high-quality ingredients.

In particular, the expansion of the craft beer industry has been primarily driven by millennials who favor local, artisanal brews with distinctive characteristics. While the beer market remains competitive, especially with large-scale breweries dominating distribution, the craft beer sector has opened doors for new businesses like beer gardens to thrive.

Startup Costs

If you’re considering whether a beer garden is right for you, the first thing you’ll need to know is whether it’s a) affordable, and b) worth the investment. I mean, how much can you actually make running your own beer garden?

Well, it depends. The initial investment for a beer garden varies widely based on factors such as the location you end up choosing, the size of your garden, and the products it intends to offer:

• Location and Lease: One of the biggest expenses associated with starting a beer garden is the cost of securing a suitable location for your business. You should expect to spend between at least $2,000 and $10,000 per month on renting an adequate space, though the exact amount will vary depending on the area and size of the property. While this may seem a little steeper than the cost of renting a standard bar, this is unsurprising given that beer gardens require outdoor space, meaning you’ll likely need more square footage than a typical bar.
• Furniture, Fixtures, and Equipment (FFE): Depending on the state of the property that you purchase for your beer garden, possibly the largest cost you’ll face when starting out will be that of setting up the physical space itself for customers. In particular, you’ll be required to obtain durable outdoor furniture (e.g., picnic tables, chairs), bar equipment (e.g., draft beer systems and refrigerators), and decor and lighting — all of which can easily total between $10,000 and $30,000 depending on the quality and size of your setup.
• Licensing and Permits: The final key cost to be aware of when establishing your beer garden is the expense associated with acquiring the permits you’ll need to operate — especially the liquor license. Depending on your location, the cost for a liquor license alone can range from $1,000 to $15,000, and this doesn’t even include all the other permits you’re likely to need (see Step 7), such as those for outdoor dining, health and safety compliance, and possibly even entertainment licenses.

In addition to these core upfront expenses, beer gardens often also face fluctuating ongoing costs associated with inventory replenishment, as well as marketing and event hosting to attract and retain customers.

Earning Potential

The primary way in which your beer garden will generate revenue is naturally through the sale of liquor, beverages, and food — though you’ll also be able to obtain additional income by using the garden to host live entertainment and as a venue for private events.

The earning potential of your business can vary widely, though you can typically expect a functioning beer garden to earn around $20,000 to $30,000 per week on average. This means that, with typical startup costs, you could break even and start paying off loans or investors within two years.

Ultimately, the key to maximizing the profitability of your business is to correctly price your products. While beer sold at a bar is typically marked up by 200% to 300% (with some varieties reaching a markup of up to 500%), you’ll need to bear in mind the typical prices charged by local competitors as well.

If customers feel that the pricing of your beer garden’s menu is too high without justification, it can drive them away to competitors instead — so try to maintain a profit margin of 75% to 80% on the drinks you sell, ensuring a balance between profitability and customer satisfaction.

In order to further increase profitability, focus on improving the experience you provide customers with — while you may have limited control over the cost of your products compared to competitors, you have full control over this.

Furthermore, things like regular events, great service, and a comfortable ambiance can help you to build a loyal customer base that comes back week after week, boosting both your sales and overall profitability.

8 Steps to Starting a Beer Garden

In order to start a beer garden, you’ll need to complete the following steps:

1. Planning Your Beer Garden
2. Registering Your Business
3. Securing Funding (If Applicable)
4. Finding the Right Location
5. Obtaining all Necessary Equipment and Inventory
6. Assembling Your Staff
7. Getting all Applicable Licenses and Permits
8. Obtaining Business Insurance

We’ve broken each one of these down in more detail below.

Still exploring your options? Check out other small business ideas.

Step 1: Plan Your Beer Garden

Before diving into your beer garden, you’ll need to spend some time conducting thorough market research.

This can involve analyzing the local market to understand the demand for a beer garden, identifying potential competitors, and assessing the target demographic.

This will help you evaluate the financial viability of your project — including projected revenues and expenses — as well as determine the best location for your business.

Finding a Suitable Name

Choosing the right business name is both important and challenging.

Your name will need to be eye-catching, memorable, and (at least somewhat) related to your industry.

If you don’t already have a name in mind and need help, you can visit our How to Name a Business guide or use our Beer Garden Name Generator tool.

If you do have a name in mind, we recommend researching the following to confirm it’s available:

• Your state’s business records
• Federal and state trademark records
• Social media platforms

You will also need to make sure that your business’s name is available as a domain — this is your website’s URL address.

Note: If you’re planning to operate a sole proprietorship, you might want to operate under a business name other than your own name — known as a “Doing Business As” (DBA) name. Keep in mind that this is not recommended for a beer garden.

Design and Build Your Space

One of the most vital factors in how successful your beer garden will be is its design and layout — it should allow for comfortable movement between its various different areas while also enhancing the customer experience in order to encourage longer stays and more sales.

However, designing your space so that it’s both functional and inviting is much easier said than done, and requires plenty of careful planning.

To help you tackle this challenge, we recommend focusing your efforts on the following key aspects:

• Seating Areas: Where possible, try to use a mix of large communal tables for groups, as well as more intimate seating options for two to four people. This mix will allow you to effectively balance the needs of most customers, whether they want to gather and socialize or have a quiet drink with some friends.
• Furniture: Since your furniture will need to withstand outdoor conditions, it’s important to invest in items made of durable, weather-resistant materials like treated wood, metal, or plastic. Picnic tables and benches are a great example of this for communal seating, while chairs and bistro tables can add flexibility for smaller groups. Umbrellas are another nice touch as they provide shade during hot weather, and protection from light rain during unexpected showers.
• Bar and Kitchen Setup: As the heart of any beer garden, it’s important to ensure your bar area is large enough for multiple bartenders to work comfortably, particularly during peak hours. Outside of this, the two most important aspects are to ensure there’s adequate refrigeration and plenty of taps for a variety of beers, so that you can both keep customers satisfied and reduce wait times.
• Outdoor Heating or Cooling: In order to maximize the use of your beer garden year-round, it’s important to make sure customers are comfortable, regardless of the season. In colder months, this may mean investing in patio heaters or fire pits to keep guests warm, or large fans to cool them during the summer months.

All of the tips above can help to create a welcoming and vibrant atmosphere for your beer garden, however if you really want to stand out, you should consider investing in a theme — whether that’s rustic, industrial, or even a specific cultural theme (e.g., a Bavarian-style beer garden or an Irish Pub).

Decide Upon a Menu

With the design and layout of your beer garden sorted, the next step is to decide upon the right menu — which is crucial in shaping its identity and appeal.

When it comes to your drink selection, successful beer gardens will offer a wide variety of options, including:

• Local craft beers
• Popular and classic styles (e.g., lagers, IPAs, stouts, and pilsners)
• Specialty and seasonal brews (e.g., pumpkin ales in the fall or fruit-infused beers in the summer)
• Non-alcoholic and low-alcohol options

While beer is the main attraction, having a strong food menu will also significantly enhance the customer experience. In particular, you should look to serve food that pairs well with this drink and is easy to eat in a casual setting, such as:

• Classic pub food (e.g., pretzels with mustard, sausages, and charcuterie boards)
• Bar snacks (e.g., fries, onion rings, nachos, and wings)
• Gourmet options (e.g., artisanal pizzas or craft burgers)
• Vegetarian, vegan, and gluten-free options

If you’re interested in offering food to your customers, you’ll need to begin thinking about how you plan to serve it to them. While you can opt to install a kitchen on-site to be able to cook it in-house and have greater control over the menu, partnering with a local food truck is also a viable option to consider.

Step 2: Register Your Business

One crucial aspect that cannot be overlooked when starting your beer garden is the importance of establishing a solid business foundation.

While sole proprietorships and partnerships are the most common entity types for small businesses, they’re a far less stable and advantageous option than LLCs — especially when it comes to beer gardens (with potential liabilities and debt).

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business’s debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business’s liabilities.

In practice, this means that if your beer garden were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

Note: If you’re interested in more information before getting started, we recommend having a look at our state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).

Step 3: Secure Funding (If Applicable)

Securing funding is crucial for beer gardens because it provides the necessary capital to cover initial startup expenses and ensure smooth operations during the early stages of your business.

Whether you choose a bank loan, SBA loan, private investors, or crowdfunding, opting for this funding ensures you have the resources needed to invest in high-quality equipment, attract clients through effective marketing, and can be a solid investment in your business’s long-term success.

Ultimately, the type of financing you choose should align with your specific financial situation and business plan, allowing you to manage cash flow effectively as your business grows.

Step 4: Find the Right Location

Choosing the right location for your beer garden is critical to its success — like any hospitality business, a beer garden needs to be in a spot with high foot traffic and easy accessibility in order to thrive.

Since beer gardens are outdoor-focused and rely on creating a social atmosphere, they tend to flourish in areas where people naturally gather, such as near malls, parks, and community hubs.

Outside of this, the other key factor to consider is the size of the location. It must be large enough to accommodate for comfortable seating, bar space, food stations, and any other future expansions you envision for the beer garden (e.g., a food service area or an entertainment stage for live music).

After you think you’ve found a space that ticks all of these checkboxes, be sure to check with property owners and your local zoning authority to ensure this location permits outdoor alcohol service and events. Failing to do so could result in costly delays, fines, or even the inability to legally operate your beer garden at that location — forcing you to relocate or modify your business plans.

If you’re looking to reduce upfront costs or avoid the complexity of setting up a full kitchen, remember that you can always partner with local food trucks in order to offer food without the expense of building and managing a full-scale restaurant.

Step 5: Obtain All Necessary Equipment and Inventory

With your financing sorted and a location selected, it’s time to obtain all the required equipment and inventory needed to run a beer garden, which includes:

Bar Equipment

• Bar Station and Workstations
• Bar Sinks
• Ice Machines
• Glass Washer
• Draft Beer System
• Wine Coolers
• Freezers
• Bottle Openers and Wine Openers
• Blenders
• Juicers
• Shakers and Strainers
• Mixing Glasses and Jiggers
• Muddlers and Stirring Spoons
• Pour Spouts and Speed Pourers
• Garnish Station and Holders
• Glass Racks
• Point-of-Sale (POS) System

Glassware

• Beer Glasses
• Cocktail Glasses
• Wine Glasses
• Shot Glasses
• Pitchers
• Brandy Snifters
• Coupe Glasses

Liquor and Beer Inventory

• Liquor (e.g., vodka, rum, tequila, gin, whiskey, bourbon, scotch, and brandy)
• Beer (e.g., lagers, ales, IPAs, stouts, and seasonal options)
• Wine (e.g., red, white, sparkling, rosé, and dessert wines)
• Liqueurs and Cordials (e.g., vermouth, triple sec, amaretto, and schnapps)
• Bitters and Syrups (e.g., angostura bitters, simple syrup, grenadine, and flavored syrups)
• Mixers (e.g., club soda, tonic water, cola, ginger ale, lemon-lime soda, and energy drinks)
• Fresh Juices
• Non-Alcoholic Options

Bar Furniture & Décor

• Bar Stools and Chairs
• Tables
• Bar Shelving
• Lighting
• TVs or Projectors
• Sound System
• Menus & Drink Lists

Operational Supplies

• Napkins and Coasters
• Cleaning Supplies (e.g., sanitizers, cleaning rags, mop buckets, and floor mats)
• Trash and Recycling Bins
• Bar Towels
• Keg Taps & CO2 Tanks
• Cash Registers or Safes

Miscellaneous Items

• First Aid Kit
• Fire Extinguisher
• Security Cameras
• Age Verification Tools

Having all this equipment and inventory in place will help to ensure that your business runs smoothly from day one, allowing you to focus on delivering excellent service and creating a memorable experience for your customers.

Step 6: Assemble Your Staff

In order to ensure your beer garden functions properly, you’ll need to build a great team of bartenders, servers, and support staff with excellent customer service skills.

Since you’ll likely offer a wide variety of local and craft beers, it’s important to have a team that is knowledgeable about different beer styles and is comfortable making recommendations to customers.

When considering candidates for the job, be sure to keep an eye out in particular for those who are friendly, outgoing, and enthusiastic — it’s these qualities that make all the difference from the customers’ perspective.

Once you’ve built a team that you’re content with, it’s important to invest in adequate training to ensure your staff is capable. On top of having a thorough understanding of alcohol and how to mix it, your employees should also be able to offer informed suggestions based on customers’ preferences.

Additionally, since bartenders and servers in a beer garden setting will likely be handling larger outdoor spaces, it’s essential to train them on how to efficiently manage multiple tables and larger crowds if you want to guarantee smooth service for your customers.

Step 7: Secure All Necessary Permits and Licenses

One of the final steps you’ll need to take before you can officially launch your beer garden is to obtain the various different licenses and permits that are often required by law.

Liquor License

This is the most crucial license for any beer garden, as it’s what allows you to legally sell alcohol on your premises.

It’s important to note that the specific type of liquor license that you’ll need in order to operate legally will depend on your state’s regulations as well as the types of alcohol you plan to serve (e.g., beer, wine, spirits).

Food Service License

If you plan to serve food in your beer garden, another crucial license that you’ll need to obtain is a food service license from your local health department.

This license ensures that your beer garden meets health and safety standards related to food preparation, storage, and serving. Note that this license will be necessary regardless of whether you’re running an in-house kitchen or partnering with food trucks.

Outdoor Dining Permit

An outdoor dining permit is required for any business to be able to legally serve alcohol and food in open-air settings like patios or beer garden spaces.

Alongside this permit requirement, local governments may also impose specific guidelines on the layout, safety (e.g., fencing or barriers), and hours of operation for the outdoor areas of your beer garden that you must abide by.

Zoning Permits

A zoning permit ensures that the location you’ve chosen for your beer garden is approved for its intended use. Zoning laws govern how land in specific areas can be used, and not all properties are zoned for commercial establishments or outdoor alcohol service.

You’ll need to verify that your property is zoned for operating a beer garden, which typically falls under hospitality or entertainment zoning categories.

In some cases, you may also need special approval or a zoning variance if your beer garden is in a residential or mixed-use area, or if it involves outdoor entertainment or live music.

Step 8: Get Business Insurance

In addition to securing the necessary permits and licenses, you will need to obtain the right business insurance.

Note

Even if you form an LLC, purchasing business insurance is still a good idea. This is because an LLC structure protects your personal assets, not your business’s.

While specific coverage needs may vary based on factors such as location, size, and unique risks, there are several key types of insurance that most beer gardens should consider.

We’ve briefly outlined these below.

General Liability Insurance

General liability insurance is a foundational coverage that’s essential for beer gardens because it protects against claims of bodily injury, property damage, and personal injury that may occur on your premises.

An example of this might be if a patio umbrella is knocked over due to wind and injures a customer — in this case, general liability insurance would cover the costs.

The average cost for general liability insurance according to recent data is $50 and $150 per month, though costs can vary based on your business’s specific needs and risks.

Commercial Property Insurance

Property insurance is essential for safeguarding your beer garden’s physical assets, such as its tables, benches, umbrellas, and outdoor heaters.

The median cost for business property insurance is approximately $100 and $250 per month. Having said that, rates can vary significantly based on factors such as your business’s location, risk profile, and the value of the property in question.

Product Liability Insurance

Product liability insurance provides your business with protection against any claims a customer may file against you due to alleged harm caused by a product you serve, such as contaminated food or faulty beverages.

While specific figures can vary greatly depending on your business’s specific risk profile and your coverage limit, this policy will typically cost you between $50 and $150 per month.

Liquor Liability Insurance

Another essential policy for beer gardens, this insurance provides you with protection against any harm a customer may cause to themselves, others, or property after being served alcohol at your beer garden.

This insurance is crucial for any establishment serving alcohol as it completely shields your business from legal responsibility if intoxicated customers cause accidents or damage.

Most beer gardens with a standard risk profile should expect to pay between $100 and $300 for this specific policy.

Workers’ Compensation Insurance

If your beer garden will have employees, workers’ compensation insurance is likely going to be a legal requirement depending on your state.

This insurance policy provides coverage for medical expenses and lost wages to employees who are injured during work.

The average cost of workers’ compensation insurance ranges between $45 per month, but this can vary based on factors such as payroll, location, and (once again) your business’s specific risk profile.

Ready to Get Started?

How to Start a Beer Garden FAQs

Who is the target market?

The target market for a beer garden business is beer lovers and locals looking for a place to unwind. Some are looking for special, unique beers to sample, while others are seeking a space to hang out with their friends — whether they are college students, seniors, or someone in between.

How much can you charge customers?

It is important to price your products correctly, which can be challenging at first when you don’t realize just how much markup is necessary. Beer at bars is typically marked up by 200% to 300%, with some beers even being marked up to 500%.

Your profit margin should be somewhere around 75% to 80% for the beer you sell. Just make sure to strike the right balance between turning a profit and keeping your customers happy, because if your beer is too expensive customers are unlikely to stick around.

How much profit can a beer garden make?

A bar can make around $20,000 to $30,000 a week on average, although many variables can alter this amount. With average startup costs, that means that a bar can pay off investors and loans in about two years — after which the business will start making a profit.

How can you make your business more profitable?

You can make your beer garden more profitable by attracting more customers and more regulars in particular. If you can make your beer garden a preferred spot for your target market, they may show up every week or even several times a week to purchase your beer and food.

You don’t have too much control over your costs and how much you charge because your competitors have many of the same products. However, you do have control over the atmosphere and experience of your customers.