What Type of Bar is Most Profitable? Top 10 Concepts

With an average gross profit margin of about 75%, bars are among the most successful operations in the foodservice industry. While high markups and strong sales drive revenue, lasting success also depends on the concept, location and execution. If you’re wondering what type of bar is most profitable, this guide breaks down the 10 top business concepts to help you understand how each model can generate steady returns.

Nightclub

If you ask “What type of bar is most profitable,” the answer is very likely a nightclub. According to Toast POS, average monthly revenue ranges from $20,000 to $30,000, but some establishments can bring in as much as $50,000 in one night, depending on location, capacity and clientele. After accounting for expenses, established businesses can have profit margins as high as 50%, the combination of high drink prices, low labor needs and solid sales volume making nightclubs some of the best money-makers in the foodservice industry.

Cocktail Bar

Cocktail bars can be very profitable as well. Thoughtfully crafted drinks served in sophisticated settings allow these establishments to charge premium prices, resulting in excellent margins. If you want to increase your cocktail bar’s profit margin, Dojo Business suggests catering to a target market, such as young professionals looking for specialty cocktails or party groups looking for shareable drinks.

Lounge

Similar to cocktail bars, lounges offer sophisticated mixed drinks in a more intimate setting. Soft seating and ambient music invite people to stay longer, increasing the average ticket size and your total revenue. To maximize money-making potential, offer premium cigars or flavored hookah as well. Premium cigar profit margins can be as high as 50%-80%, so expanding your lounge’s product offering beyond alcoholic drinks alone can make good business sense.

Wine Bar

High price points, low labor costs and a niche customer base make wine-focused establishments some of the most profitable types of bars. They can be made even more successful by installing wine dispensers and nitrogen systems to reduce waste, along with utilizing pour technique and portioning tools to standardize servings. In addition, Sommelier Business Magazine recommends offering paid memberships or renting extra space as good ways to make the wine bar business model even more lucrative.

Sports Bar

While drink prices may be lower, sports-themed establishments are still among the most profitable types of bars for a number of reasons. Draft beer offers excellent margins, and catering to fans of a specific team can help build a loyal customer base that’ll visit your establishment time and time again. You can boost profitability by choosing a location near a stadium and promoting gameday events on social media to drive turnout, as well as by selling team merchandise at a slight markup. 

Pub/Tavern

While affordable domestic or craft beers are key revenue drivers, a profitable pub food menu plays a major role in a neighborhood tavern’s overall success. Favorites like cheese sticks and onion rings are inexpensive to make but can be sold at a good markup, contributing to steady revenue. Serving satisfying comfort food also encourages repeat visits and helps foster the kind of loyal, local crowd that keeps these watering holes thriving for decades.

Gastropub

If you’re looking to attract foodies who want to go beyond nachos and wings, gastropubs can be great business ventures. Gourmet dishes such as truffle fries and steamed mussels command higher prices and bigger markups, making them very profitable. Combined with classy cocktails and craft beers, gastropub owner earnings can reach as high as $150,000 per year. If possible, hire knowledgeable staff who can offer thoughtful food and drink recommendations to provide guests with a personalized, curated experience that encourages repeat visits.

Brewpub

Although startup costs are significant, microbrew pubs have great potential for long-term profitability. Quality craft beers and flavorful menu items not only have good markups but also create loyal customers, the perfect combination for financial success. As with many businesses, specialization is crucial, so research the types of beers that other restaurants and bars in your area are serving to identify an untapped niche in the market.

Dive Bar

No list of the most profitable bar types would be complete without mentioning dive bars. Inexpensive decor, cheap drinks and loyal customers combine to make a business model that thrives on low overhead and repeat sales. Since raising prices or changing decor might drive away the no-frills crowd, improve profitability by limiting waste and portioning servings, such as with beer dispensers and standardized jiggers.

Themed Bar

If you choose a low-competition niche and manage the business correctly, a themed bar can be a great money-maker. From tiki bars with palm trees and fruity drinks to speakeasies with dim lights and signature cocktails, you can charge a high markup on food and drinks if you offer a unique atmosphere and creative menu. Although themed bars can be lucrative, they are rather niche, so be sure to research other businesses in the area so that you don’t start a Medieval-inspired tavern down the street from another just like it.