Mikey Enright and his business partner Julian Train opened The Barber Shop bar in York St in Sydney's CBD four years ago.
The venue, themed as a vintage gin bar, has won several industry awards.
Its success has prompted the duo to set up a new small bar in a neighbouring space operating with the NSW Government's small bar licence.
The site is currently being renovated and will open later this year, trading as the Duke of Clarence.
It's being developed as an 1850s-style English tavern, with many of its building materials being imported from the UK.
Mr Enright says the small bar licence has made the new business concept more viable.
"The changes in terms of extended patron capacity and later trading until 2am have given us a lot more certainty as we plan the new venture," he says.
"We can now afford to build a bar concept which we are passionate about. We can be more creative with our offering.
"The small bar licence is helping create more diversity in the industry."
Mr Enright says applying for the small bar licence was straightforward, simple and fast.
"We were also attracted to the small bar licence because of its lower application fees and lower ongoing annual fees. It's really helped us to maximise the potential for this exciting new venture," he says.