Buying/Leasing a Place of Business

Found a GREAT article here by Jim Laube discussing the financial risks of opening a bar or resteraunt. While in most cases it's very easy to ignore this aspect, between insurance costs and making sure your place is both compliant and safe, risk-aversion can be potentially the most expensive aspect to owning a bar. The article is from RRG, Resteraunt Resource Group, a website focused on helping reduce the amount of risk that resteraunts (and bars in this case) take on.

The focus of this article is the decision between leasing or buying outright the property that you have your bar at. The discussion on the startup of the business itself is very key with these points. Laube gives a very broken down and simplified way to figure out costs versus expenses of running either a leased location or a bought one, and also mentions that many people do not even weigh the costs vs. benefits before committing to something as big as a business venture such as this, as Laube points out by saying:

"If you go into a new venture expecting to do $1,000,000 a year in sales and instead do $600,000, chances are you’re DONE, out of business, with little or no chance of turning it around."

Laube lists the major costs of startup on a business as leasehold improvements, furniture, deposits, soft costs, pre-opening expenses, contingency, and working capital reserves. However, as he points out, the perk to owning the property versus leasing it is that you can actually turn around and sell the property and recoup some of your losses if business fails. Thus, for a more risky business venture, perhaps it would be more prudent to do something like this when looking at a tough sell business versus a more safe one (to which you might lease).

In a lease example, Laube suggests that the expected ratio of return be at LEAST 1.5 to 1, if not 2 to 1 (meaning making $1.50 for every $1 spent). Though sometimes the suggested ratio of return is more around 1.2 to 1, as he points out, it could take an awfully long time just to recoup sunk costs. Another good point he makes in regards to leases is to "don’t sign a lease where your monthly building rent is in excess of 6% of your expected sales volume. Once rent starts to exceed 6% - 7% of gross sales it begins to seriously erode your chances of making an adequate profit."

While it may seem like the simplest part of the bar-start business, the start-up costs can either sink or float your business towards financial freedom. With the right state of mind and precautions, you can make sure to turn a profit quickly, and start making money without having to worry about other things holding you back.

Drink of the Day (Sept. 26)

Note to self: Google Searching this probably wasn't the best idea without adding "drink" onto the end in a crowded area. :) Oh well, here's a drink that is mass made with females it seems, and a VERY popular one at that.

SEX ON THE BEACH
Lots of parts to this one. Using a cocktail glass, combine 1 and 1/2 oz. of Peach Schnapps, 1 and 1/2 oz. of Vodka, 2 oz. of cranberry juice, 2 oz. of orange juice, and 2 oz. of pineapple juice. The vodka can be usually used by most any decently made vodkas, as it's really hard to taste it at all unless you overpour it. After combining the ingredients, shake in a highball and strain with ice and enjoy!

Drink of the Day (Sept.22)

My favorite drink in the entire world comes in as the Drink of the Day today, unfortunately it's also one of the most expensive out there as well though. :)

JAGERBOMB
There's actually more than one way that I've seen this made, although the recipe is usually the same. Half of a can of Red Bull energy drink and a shot of Jagermeister is the concoction, but if you order it in a bar, they'll simply mix the two for you. For those of you who are a bit more adventurous, pour the half can of Red Bull in a beer mug, and pour a shot of Jagermeister. Drop the shot into the beer mug, and chug the whole thing. Voila, a drink that will keep you awake for the rest of the night and make sure that you don't remember half of it either! :)

Ideas for my nightclub...

I've been thinking more and more since my last post about what type of bar I would like to run. I think the most glamorous would be a nightclub, and would be my bar of choice if I got into things eventually. I think there's so much room for improvement when it comes to places like Generic in Columbia. They like to pretend they're fancy, but they aren't very upscale at all.

My ideas for a nightclub would having a two storied building with a dance floor on the second floor and a bar on the first. The floor in between however would be made of plexiglass (another idea I thought of was to have something like an aquarium under the dance floor but I can't imagine the logistics or toughness to install something like that). The bar would wrap around the entire building and be staffed by quite a few bartenders. I've found that when I go to a bar, the toughest part seems like it should be made the easiest -- ordering drinks. After all, that is how a bar makes their money in the first place and to have customers having to wait upwards of 20-30 minutes seems ridiculous to me when there's tons of money to be made on charging up the drinks to ridiculous levels. I would imagine the more business we could take in, the more people would want to come to the bar in the first place as well.

Since I'm stuck with a broken ankle for this week, I'll come back tomorrow with some more ideas logicistically for the nightclub, as well as some off of the wall ideas that may work (or may not). Cheers!

How to Start a Bar?

I found this very interesting article from entrepreneur.com today covering how to go about starting a bar today and thought it was very interesting. It seems to give you a no nonsense view of how to go about doing it, which was refreshing after seeing a lot of pages which force feed you visions of some grand scheme when it's a long road to get to having a successful bar in the first place.

I also liked the part where they addressed the type of bar you would want to start and the characteristics of each one. When I think of starting a bar I mainly just think of the type of bar we have here in Columbia, but never think about all of the different kinds of bar types there are out there.

When I think about the type of bar I'd like to run, I think mainly of either a friendly type "Cheers" bar or a club. I think both would be very valuable and profitable in Columbia, as I think the market for both is bigger than that of simply just another generic (no pun intended) drinking bar. With Big 12, Shiloh, Heidleberg, etc. the market is just oversaturated with them. With Tonic and Generic as the only big nightclubs, I think a really impressive and upscale night club could be hugely successful. Later in this week, I'll post my thoughts and ideas on what my ideal club would look like. Right now I have a shattered ankle and I'm hopped up on vicodin so I'll end this a bit early. :)

Drink of the Day (Sept. 10)

For the Irish in me, I figured this would probably be a good one. I've drank it before, and even though I'm Irish, I'm not sure I liked it very much.

IRISH CAR BOMB
Pour a chilled half pint of Guinness in a mug, let settle. Fill a shot glass of a half ounce of whiskey and top it off with a half ounce of Irish cream. Drop the shot in the mug and drink away!

Bartending Advice from Monster.com

Found this while looking around the Internet today...

http://hourlyandskilled.monster.com/rest/articles/bartending/

From Monster.com, obviously one of those big, important, all-mighty job websites so I figured it was pretty relavent. The article is titled "Break into Bartending" and is written by Jamie Popp.

I've found some conflicting things here and there over whether Bartending School is a good idea or not -- this article suggests so, and I would personally attend it if I was planning on trying to get a job working for someone else's bar. Says the article:

"If you want to work for a national chain, a bartending certificate is a must, emphasizes Chad Ryan, manager of New York City-based nightclub Therapy.

At Vintage Wine Bar & Restaurant in St. Paul, drink servers and pourers are expected to learn 20 wines served by the glass and mix all of the martinis on its extensive list. Fortunately for servers with limited experience, menus can serve as cheat sheets. And the restaurant provides beverage training to exceptional candidates, according to general manager Dan Nelsen."

I think although the accreditation of attending a bartending school would most likely look important on someone's resume, getting the knowledge of how to make all of these drinks is much more important. While I'm sure I could rattle off a few that I knew from the top of my head, actually memorizing, and knowing the ins and outs of making tons of drinks at will is something that I would imagine the average person couldn't pull off just from their days of binge drinking in college.

The article also covers perhaps some under-looked aspects of bartending, such as a bartender's appearance behind the bar. Again from the article:

"Nelsen says bartenders 'have to present themselves neatly and look good. We want someone who looks professional.'

Some hot spots commonly hire based on looks alone. Staff who hire drink servers at trendy 10,000-square-foot SBNY Splash Bar New York, a dance club and bar that boasts performances by Britney Spears and Cyndi Lauper, say better-looking bartenders sell more drinks."

Dress and style are obviously very important issues when attracting customers to a bar, but besides low-cut shirts and gelled hair, what type of dress attract more customers to bars? I think this could be a good investigation down the line and would probably make good for a later post! :)

I got a good chance to mini-bartend this weekend with the big Mizzou game and put together a huge tailgate for our friends and family. Dealing with just those people and having to arrange drink-making was stressful enough, I can't imagine dealing with hundreds of people in a night that I don't even know! Although my friends don't tip, hmmm...