Ask HN: Any bar owners?
With all of the tech startup entrepreneurs, does anyone have experience in starting a bar? Any facts or figures you could provide about the cost to setup, info for getting licenses, etc.?
Licensing is a complex topic that varies considerably by location. By state, and then by county or municipality.
Overhead can be relatively low, depending on what you have in mind. You need some basic infrastructure- ice machine, coolers, CO2 systems, etc. Insurance is a bit different for a bar than other businesses, obviously, but not too bad. Inventory is a low cost compared to your cash flow, as is labor since pretty much everyone will be minimum wage plus tips. Maintenance isn't too bad.
Basically a well-run bar is a license to print money. You sell drinks for several multiples of your cost of goods.
Most bars I knew of that had trouble had it due to owners that didn't know what they were doing, at all, in terms of business, or more commonly had a drinking/substance problem.
Friday and Saturday nights we had a live DJ for a few hours a night for atmosphere, but I honestly don't think it mattered much one way or the other. People would have showed up anyway.
We tried boosting Mon/Tues night, but nothing made any difference at all on Monday, and the difference on Tuesday didn't cover the costs. We pretty much considered Monday the paying-your-dues night, and had fun amongst ourselves and the handful of regulars and closed at midnight (vs about 2 am on other nights).
One thing about the non-fri/sat nights, there's a definite trend of "them that's gots, gets" in the bar scenes on those nights. People go where people are, so it's not a linear function on those nights, it's discontinuous. Once you have a crowd, you get a crowd. Weekends are different, there's crowds everywhere.
You can start in a crap location and gradually build up a loyal customer base. That's cheap and can eventually be lucrative if you're really good at service and marketing, but in many ways you're fighting against the tide - you're inconvenient to your customers and easily forgotten.
A well-run bar in a good location will surely bring in good revenue, but the rent will almost inevitably be expensive as well.
I'd also say that bars are far, far less location-sensitive than retail. You can get away with a bar being a little off the beaten path, and if you're smart, you make that part of the appeal. That works well with a semi-vice industry...
We tried to open a nightclub a couple years into owning the bar, and we failed miserably. A nightclub is a whole different beast from a bar.
I think the three main reasons we failed were
1- We spent too little money on it. There are clubs, notably the really underground dance clubs, that can get away with being a dark room with a good sound/light system and nothing else. Pretty much any other kind fo club needs to spend a fair amount on decor.
2- The space was too small. Related to the above. Again, maybe an underground club gets away with small spaces, but most need a large space with lots of nooks and crannies.
3- We had no clue how to market a nightclub. A bar needs to feel like it's apart from the world, a sort of refuge in a way, but a club needs to have some sort of aura in addition to that. That's a complicated thing to build up, and we didn't know how and we didn't put in the effort to learn.
An opportunity came up near the end of the bar run to buy what had been one of the mega-nightclubs in town in the 70s-80s. It had gone through several failed iterations in the decade since, and was going for a relatively cheap price. The deal never solidified, and in the end it's probably a good thing it didn't. Someone could have revived the mystique, I think, but it couldn't have been us.
1) We actually managed to go as cheap as possible with our venture. The scene that we were targeting, Gothic/Industrial, is already a hard to come by group of people compared to the larger genres out there, and we even had competition on the same night; however without large decor changes, or even spending more than $500 on opening night, we were able to make a decent enough of a profit. I think marketing may be the key factor here.
2) The space we found was very small - in fact it was a hard to locate bar that was looking for something to take over their Saturday nights. One of the issues we had with the bar owner was decor, which in the end had to be left untouched - thus our Goth/Industrial night took place in a Caribbean/Tiki style bar.
3) In regards to marketing a nightclub - as previously mentioned by mschwar99, social butterfly types are a great asset here. By getting promoters to hand out flyers (stamped with their promotion id/name, and the promoters targeting very obvious members of our target scene) you can get a good amount of patrons in. By presenting the flyers, the customers will get free entrance, and the actual promoters get a cut based on the amount of patrons they bring in. Your promoters will work extra hard to get the word out as it's purely commission based work at that point.
Sadly, in our case, the reasons we failed were mostly attributed to the NYC smoking ban in bars, the incorrect cross streets being printed on our flyers, as well as midterms taking up the time of our customers.
Much of the details of your venture will depend entirely on its location. Sticking to advice that will apply no matter where you are:
If you have to equip the place from scratch and need to do it on the cheap, find restaurant auctions around your location. Restaurant and bar equipment depreciates at a sickening rate, and they go out of business frequently. You can save well over 70% off of catalog for six month old equipment.
Find a local insurance agent and get to know them very well. Don't ever, ever skimp on liability insurance.
In my experience far and away most important aspect of operating a bar is the staff that you employ. Obviously they need to be as trustworthy as possible - employee theft is a constant. Much like fighting illegal downloads you will be fighting to minimize it rather than abolishing it. The theft will rarely be in the form of removing money from the register till, but rather in the form of unpaid product.
The larger reason that your hires will be important though is because hiring the right people is the most effective form of marketing that you can possibly do. Hiring a staff of well connected, social butterfly waitresses, door guys, and bartenders has an infinitely higher ROI than any print or radio marketing that you can do.
Additionally, good employees are perhaps the most important differentiating factor for your business. Unless you are a multi-million dollar Vegas-style theme joint, your business is a commodity. There are already twenty other businesses just like yours. Having employees that are both good at their jobs and eager to establish relationships with your patrons will be key in converting customers to repeat customers.
Could type all day, but the last thing that I would add is that as with any new business you will struggle to gain traction. When marketing I always tended to look at my job as one of disrupting traffic patterns. Potential patrons already had their favorite bar and a list of five others on a short list. My job was to get myself on that list, and in order to do that I would have to offer an awfully compelling reason to get them to disrupt their patterns.
I would usually use either a heavy loss leader (really cheap drinks) on a typically low revenue night or high profile events (big name band / DJ, fight night, etc). Once I had ac customer in the door and I provide a well executed experience it becomes a numbers play much like PPC advertising in the web world. 50% of the people that tried me out will be back someday, I made it on to the short list of 10% of the new customers, 5% wind up being new regulars.
You mention hiring well-connected, social butterfly types. Can't doing this increase your risk/amount of theft? In other words, if many of your patrons are socially connected to your staff, aren't they more likely to expect/get free drinks?
That said, if you identify one person that appears to be a social hub, giving them free drinks might be good for business. YMMV!
As a consumer I've seen this handled differently at many places, so I'm wondering what worked for you. I've had bartenders who I knew were just not ringing up my drinks, bartenders who had me on the comp list, bartenders who'd mix up a jug of free shots at the beginning of the night, bartenders who'd ring my drunks as staff/girlfriend drinks, etc etc. One of my current bars has a friend-of-the-bar/in-the-biz program, and I get a percentage off of all my drinks. As a consumer, it's the method I prefer the most, because even when I show up on the wrong night or one of my regular bartenders has the day off, I still get some sort of discount at the end of the night, even if my tab isn't missing the beer or two it usually is.
I'm asking because I realize two things: 1) even though I always bring people in with me who wouldn't have gone to that particular bar without me, the bar is definitely losing potential profit on me individually. My stool could be taken up by some guy off the street who's paying full price for everything. 2) I tend to follow bartenders like hairdressers. I really don't care where I'm getting my hair cut or where I'm drinking my beer. I care that everyone knows my name, that my first drink is on the bar before I sit down, and that I feel like I'm getting a deal at the end of the night. I have left bars never to return when a favorite bartender got fired or quit.
For instance: http://www.eaglevision1.com/Text-Inserter1.htm
Terrible website, but these guys know what's really important in a business.
On the other hand, a javascript/flash-only site can be problematic for search engines, even those engines with the supposed capacity to parse javascript/flash. Outside of the search engine issue is, of course, linking by by human beings. How would you send a friend a link to a show, event, or location page? --You can't.
It really doesn't matter if the target audience is expected to be ignorant or indifferent to security concerns. You can still give them the "shining moving website" with flash in addition to more accessible content. The important part is accessibility improves usefulness and effectiveness.
The site exist to promote the club, but the current design states, "If you use an iPhone, you're not welcome here." Can you honestly say the entire target audience doesn't use iPhones? In essence, the design defeats the purpose. And no, I do not own an iPhone, but that's beside the point.
That said... I'm quite sure there isn't a lot of traffic to these pages anyway. The question to ask is - am I going to lose customer by not being available on an iPhone? People will already have decided if they're going to come or not, they don't need the site to convince them. If their friends go or if it has good buzz they will, otherwise they won't. The website is, I think, just an item on a checklist - you have to have it but it doesn't really matter if it's good (or googleable) or not.
For the rest, it's a cost/benefit thing I think. The people who design the flyers (which are an important promotion tool) can easily, quickly and cheaply make a flash website from the flyer design. These things are one-off, they rotate every week, requiring someone who does all the tech frills is expensive and makes the turnaround time longer.
(PS no average iPhone user is going to think 'I'm not welcome here', they'll just think 'hmm it doesn't work, let me try at home tonight').
"Let me check what's going on at Slide... hmmm... it doesn't work. I'll check $OTHERCLUB."
Expecting a potential customer to go find another device to access your content/promotion defeats the purpose of building said promotion. Similar is true for making the content/promotion difficult to find via a search engine.
The costs involved in the production of more accessible content are negligible. In fact, it's faster and easier than creating flash content, and you could automate most of it into a form based UI (image of flyer, title, date, time, descriptive text).
I do see your point how club promotional sites might not get a lot a traffic but keeping a promotional site accessible to mobile devices and easily found through search really does makes sense. Advertisements that cannot be seen are far less effective than advertisements that can be seen.
Then again I've just been reading the 'intellectual hipsters' article also on the front page (http://lesswrong.com/lw/2pv/intellectual_hipsters_and_metaco...) so maybe I'm just an idiot trying to argue a contrarian position from made-up assumptions on smartphone use amongst the club-going demographic :)
> you are looking at this from a technology-warped lens, placing too much emphasis on an aspect close to you (i.e., websites).
> Again I don't have data, but I'm quite convinced that the amount of people who are out on a friday night and google'ing for a place to go is very, very small; so small as to put the accessibility and SEO-iness of the event's website pretty much at the bottom of priorities for a promotor / club owner.
Without data, we're probably wasting time discussing it, but I don't think you're an idiot/hipster for arguing the other side. In fact, I appreciate your comments. If you look at the down-votes I've gotten, they pretty much prove if one of us is an idiot for arguing an "unpopular" point of view, it would be me. Until I saw the down-votes myself, I never dreamed keeping things accessible, particularly advertising promotions, would be such an unpopular view.
At the same time, I'm still curious what could be learned from the data? What are the real usage/access patters of mobile devices on such sites? --Mostly due to always wanting to know more about how most people use mobiles. I think it would be fun to analyze the data just to see what I could learn from it.
Since I'll probably never get access to the log data, I'll be left wondering. Oh well. I guess I'll have to find some other curiosity to occupy my time, but luckily I have a lot of them.
Only caveat: it takes a lot of discipline to manage large amounts of cash. If you have a problem with drugs or prostitutes, you will fail. It's not your cash... it's next week's payroll, liquor order, rent, etc.
I think if you peruse his site a bit, there are lots of rants about how difficult it was for him to get this started.
It's also a dance (and other function) club and has a different set of concerns.
SF can be tough on business owners, but his issue with the ABIC is actually a classic sort of SF vs. The Feds sort of issue. In that case SF mostly couldn't care less and generally actually gets pissed when the feds start crap like this. We see similar issues around marijuana busts. Generally SFPD doesn't give a shit about marijuana (in general the SF DA won't prosecute these cases and they if someone does get popped its a misdemeanor), but every so often an overzealous US Attorney comes in and makes an easy, and high profile bust.
Part of me thinks web stuff is so hyped because it sells magazines
Big empty rooms kill the buzz. Two different spots with a choke point in between make it rock. Think inside (doorway) outside, or lounge (doorway) kitchen. Even better when everyone has to make the pilgrammage between (ie, toilets, drinks ,etc).
I imagine it's for the same reasons. In my single days, I always stood/sat at the bar. You're guaranteed a turnover of people to talk to.
Usually the distribution of licenses is per capita, i.e. for so many people you can have xx licenses. In Boston you can't get a license unless you legally purchase it on a secondary market or have relatives in the town hall or are prepared to bribe your way through (see Diane Wilkerson case)
In Florida, where I operated a restaurant for a bunch of years, it is much easier to get a license if you have a kitchen and do certain percentage of revenues in food sales; the total time to get one from scratch I think was 3 month or so and the total cost was few hundred dollars.
Your biggest problems are employee theft and liability issues. Theft usually comes in 3 forms, theft of product, theft of time and outright theft of money. Liability is usually silly lawsuits, I had a cook who fried his elbow in a deep fryer while high, I had slip and falls, I had broken teeth, fights, orgies in a bathroom, etc.
If you could - get an experience person and partner with him for first few years, you will be thankful that you did.
Licenses vary greatly from state to state. There are a myriad of details to master.
Here in DC the actual license is a few grand (by the books), but I heard it could cost up to $100k when you factor in all the lawyers you'll need to actually get it approved.
Then again, it might scare you off. Maybe it's just that CA is particularly bad, I dunno.