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Photo: Shutterstock/ Mangostar.


xcellent location. Top-shelf liquors. The right vibe. It all adds up to a great bar—but only if the business’s licenses and permits are in order. Regulations vary, but bars and other establishments that serve alcohol face some of the toughest hurdles before they can open. Laws can restrict where a business opens, what it can serve, and when it can serve it. If the right permits and licenses aren’t secured, a business could face fines, lost revenue, and even closure. In fact, that’s a common scenario, especially for those with multiple locations and without centralized compliance teams or regular audits of their existing or required permits. For smaller establishments, regulations often get overlooked. Unfortunately, when officials shut down a favorite watering hole, for any reason, it can make headlines, create bad PR, and bring the risks of lost time and money. Pop-up beer gardens in Philadelphia, for instance, were closed recently because of noncompliance. In Boston, a brewing company was closed for a month because it was operating without a license. Bars and other establishments that serve alcohol face special and generally more requirements than alcohol-free food and beverage businesses. Not only must businesses meet the rules of state authorities to sell alcohol, but in many cases, they must also satisfy county and municipal mandates. It can take months to acquire the appropriate paperwork, which typically must be renewed each year. What’s more, regulations vary widely from state to state and town to town. Some states, for instance, limit sales on Sundays or the hours alcohol can be sold. Others set population-based quotas for the number of liquor licenses available. In those states, licenses can even be traded on a secondary market, spiking the price to $1 million or more just for the license. Of course, liquor regulations aren’t the only rules that bars and other drinking establishments must follow. Like any business, they must maintain a general business license, sales tax license, health department license, and others depending on the location. Failure to keep these permits and barbizmag.com

How To: LICENSING licenses up to date can lead to more fines and lost revenue. Here are five steps to take to make sure you stay in compliance. 1. Open your mail. When you’re busy running your bar, it’s easy to let official mail get lost under a stack of papers. Don’t let it happen. Government officials, in some jurisdictions, send out reminders and invoices when a license is set to expire. They also might send out notices about new rules and regulations that your business must abide by. Develop a system to ensure your mail is opened promptly and appropriate action is taken so licenses don’t lapse and you stay in compliance. However, do not assume that you will get a notice in the mail, even if the local

Keep permits updated to avoid fines and lost revenue.

or state government makes changes to the licensing laws or requirements that impact you. Some jurisdictions are sporadic with their notifications and some do not send notifications at all. The bottom line is the onus is on the business owner to stay abreast of developments. 2. Complete a full compliance audit and gap analysis. Requirements are changing all the time, and new obligations can emerge. Look at all your business’s compliance requirements, compare them to your current permits and licenses, and determine if there are any gaps now or in the near future. Then, create a system to track your licenses and ensure they are renewed on time. 3. Know what you need. Before you announce a grand opening date, make sure you have fully analyzed all your compliance requirements and have

determined how long it will take to secure the needed permits and licenses. Once you are open, stay on top of business license requirements. It’s particularly important to do so when you make changes to your business, such as adding sidewalk seating or a rooftop bar. 4. Put central office in charge. Many businesses decentralize their compliance efforts and assign those duties to employees in far-flung locations. After all, compared to strategic growth plans and new branding campaigns, business licenses and permits might seem trivial. But when a local employee fails to renew a permit on time, the consequences can hit headquarters as well, especially when closures, fines, or bad PR affect the bottom line. Local employees can track licenses and renewals, but make sure headquarters isn’t left out of the loop. Place somebody in central office in charge of following up with employees on the ground to ensure that all requirements are met. 5. Get support from an expert. You know how to run your establishment, but that doesn’t necessarily make you an expert on business licenses. And, like most business owners, it’s likely that you already turn to other experts for help—a DJ to spin the best house music or a liquor distributor for top-shelf tequila. In the same way, a compliance expert is schooled in the world of government regulations and compliance. Instead of you spending time searching online or traveling from one government office to the next, compliance experts can tell you, almost immediately, what permits and licenses you’ll need to open and when they are up for renewal. They also can notify you when new mandates arise so there are never any surprises. From idea to grand opening, it takes plenty of hustle to create a successful bar. Following these steps ensures that your hard work continues to pay off. As Director of Customer Relationships and Compliance at Wolters Kluwer’s CT Corporation, Scot Ferraro helps law firms and businesses of all sizes stay in regulatory compliance. For more information, visit ct.wolterskluwer.com/ business-license-application-package. November 2017

Bar Business Magazine


Profile for Bar Business Magazine

Bar Business November 2017  

This issue features articles on rye whiskey, menu design, relocating a brewery, licensing and permitting, a holiday gift guide, and more!

Bar Business November 2017  

This issue features articles on rye whiskey, menu design, relocating a brewery, licensing and permitting, a holiday gift guide, and more!