Business Tips Archives | Sparkler City

Getting Your First Bar Funded

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When most people decide to open their first bar or nightclub, they do it because it has been a long time dream. The sad reality is that it takes a lot of money to start a bar from scratch, and most entrepreneurs won’t have all of the capital that it takes right off the bat. That means you will need to court perspective investors and get them onboard with your concept which will be a blend of salesmanship and compromise. If you are like many entrepreneurs, this will be your first business that you start of any kind, so it can be tough to navigate the waters. Here are some basic steps that you’ll want to take before you start pitching your bar concept to investors.

Brand and Concept

The very first step that you’ll need to take is to have a viable and well thought out concept. Just approaching an investor with the dream of owning a bar will never do, so you need to work out some of the details. Come up with a name and a concept before you ever start crunching the numbers, and even come up with some logo and marketing material concepts. Chances are you’ll need to work with the investors to alter your original concept, but you can check out a project portfolio website like Behance to get some general ideas on paper before you start working through the details. Some people feel that logo design is putting the horse before the cart, but I think it’s just prudent planning.

Business Plan

Creating a high quality business plan, also called a prospectus, is another essential step to complete before approaching potential investors. You are going to need all of the detailed information included such as operating costs, building costs, and what you expect to draw from the local market based on heavy research and demographics. This is a difficult feat for most rookies, so you should hire a professional consulting firm to help you get it right. You’ll also need to figure out how the business arrangement will work over time. For instance, if the investors gave $100,000, you could do a 75/25 split of revenues in favor of the investors until they have earned $115,000, and then change it to a 25/75 split in your favor until the business is gone or sold. This is called a share flip and will probably need to be tweaked based on your investors risk comfort.

Pitching Your Bar

You could have the best concept in the world with a great business plan to show how it will be profitable, but if you flub the pitch you won’t go anywhere. There are plenty of great webinars and websites out there to coach you on pitching your business, so make sure you educate and prepare yourself before you setup any meetings. You can also tap a consulting firm to help you with this process, but that will add to the out of pocket expenses you incur just to get the bar or nightclub off the ground.

Overall, it’s important to remember that even though it was your concept originally, bringing investors onboard means sharing your vision and making compromises. It’s a trade-off that many first time bar owners simply must make if they don’t have a huge supply of capital on hand to do it alone. Remember, your goal is to get your first bar or nightclub off the ground, so focus on making your dream come true the second time around or after you have the funds to buy out the original investors.

Summer at a Bar

Enjoying a Profitable Summer at your Bar

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With summer upon us, putting together a game plan to maximize your revenues is vital for your bar or nightclub to have a profitable season. Potential customers are eager to enjoy their summer, so if you offer them what they want you can make huge profits in just a few short months. On the flipside, if you don’t entice your customer base, they will be just as content to stay home and drink in their backyard with friends. The key is to offer them something at your bar or nightclub that they can’t get anywhere else in town, and there are a few simple ways to accomplish that.

Get Your Staff Ready

Before you even consider trying to pull in more customers over the summer, you need to make sure your staff is set and ready to go. That means making sure you have enough bartenders and servers hired to accommodate any demand that may arise, as well as making sure that bar staff is properly trained. If you can have a complete staff of pros who know exactly what they are supposed to, your guests will stay longer and keep coming back to your bar which will lead to massively higher profits.

Plan Summertime Events

Events are the lifeblood to any successful summer marketing program for a bar or nightclub, so this is where much of your attention needs to be devoted in the months leading up to summer. You’re going to want to book a great variety of bands and come up with themed party nights such as beach attire or even a toga party. Make sure you book the most popular local bands in your area as soon as possible because they will get snatched up quickly for summer show. If you create events that are entertaining and make your customers feel like it is an exclusive experience, you can expect to see large profits follow.

Marketing

No matter how great your summertime event strategy is, it will be all for not if you can’t market it properly. You need to do all of the standard methods such as social media, your website, and even radio ads if you’re in a large enough market, but never underestimate the power of in-house marketing. By putting table tents of your next event on every table and having large banners boasting upcoming parties or bands, you will directly market to your best demographic of all: people who already want to come to your bar or nightclub.

Summer can be the most profitable season for a bar or nightclub, but if can also lead to a completely empty venue if you don’t know how to attract customers. It all starts with having a well-trained and competent staff that is ready to work, and everything else stems from there. Once you have a great staff in place, you can focus on putting together summertime entertainment and marketing it so your bar or nightclub packs out each night. If you can conquer those three factors, you can easily have a very profitable summer at your venue.

Bottle Service

Determining Table and Bottle Pricing in your Club

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Originally when nightclubs first became trendy, the only costs were for drinks and possibly a cover charge to get in the door. Over the last few decades, club owners have found all sorts of new ways to generate revenue such as bottle service, VIP seating, and more. When you’re pricing out a cocktail, the formula is really straight forward. You figure out the cost of the ingredients, add on your target margin, and you come up with a final price. However, determining table and bottle pricing can be a little trickier since it is skewed based on the demand of your limited seating areas and the “cool factor” of buying bottle service. Fortunately, there is a pretty simple way to figure it out if you know what you’re doing.

Bottle Service

There are two main ways nightclubs handle bottle service. Option one is used if there are plenty of table in the club and groups can simply order a bottle with mixers for their table to enjoy. Option two, the more popular option, involves having a limited number of tables available that are exclusively for groups who are buying bottle service.

To put it bluntly, a table for bottle service is worth whatever people are willing to pay. It’s always good to start off with a base price at the beginning of the night, such as 1 bottle for $300 or 2 bottles for $600, and then slowly increase the price as tables begin to fill up. It’s not uncommon for a nightclub to charge twice what the initial going rate for bottle service by the end of the night if the club is very busy. Just remember that it is completely supply and demand, so if the group wants bottle service they will pay what you ask.

Table Pricing

Some venues like to offer tables to VIP customers as a way of showing their status. Usually, this requires an additional purchase of a VIP package when they arrive at the club. Similar to bottle service, the cost of a table can fluctuate based on demand. However, it is usually much more affordable to be seated in the VIP area compared to getting a table with bottle service. You should also keep them separated so the bottle service customers are considered the top echelon while the VIP customers are a close second.

Advanced Booking Fees

Sometimes large groups want to reserve a section of your nightclub for an event such as a birthday party or a bachelor party. This can mean big business, but it can also hinder your regular business model because of the amount of space they will take up in your venue. For this “hassle”, you should charge an advanced booking fee. Typically, the industry standard is somewhere between 25% and 50% of the normal cover charge per person in the group. This should also be non-refundable in case the group decides to cancel unexpectedly so you aren’t out the labor and materials costs for preparing for their arrival.

Though pricing out VIP packages and bottle service requires some flexibility and a keen business sense, with a little practice it is fairly straight forward. Just remember that you’re selling an experience and that demand should guide you while you’re determining table and bottle pricing in your club.

Nightclub Inventory

Watching Your Business Expenses Closely

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In business, watching your bottom line is the most important part of being successful. Your total expenses generally tie in directly with your profit margins, and the total profits that a company sees at the end of the year can play into bonuses for management and the ability to hire more employees in subsequent years to continue expanding the business. While this sounds pretty cut and dry, most businesses have already done the basics of finding the cheapest suppliers and taken other measures to make sure they are producing product at the lowest possible price. However, there are other things to take into consideration that just may save you more money than you ever thought possible.

Employee Theft

Though you probably don’t want to think of your employees in this light, the fact of the matter is that one in three employees will steal something from their workplace at some point during their career. This can range from something really small such as a box of straws from the back room to something expensive like a case of high end vodka. Rather than suspecting all of your employees and treating them like criminals, it is easier to put in basic security checkpoints to weed out theft. Most theft is bred from opportunity, so by making it difficult to steal using a single monitored entry point and surveillance cameras throughout the business, you can discourage your employees from attempting theft and lower your business expenses.

Energy Costs

Energy expenses can be a business’ biggest enemy; especially if you operate a large venue such as a restaurant or nightclub. Nightclubs are usually filled to the brim with computer POS stations, lighting, and sound systems which all suck energy like it is going out of style. One of the best things you can do is to have all of the computers and other equipment setup to power down at a certain time unless there is human intervention. This will save you a ton of energy costs over time, yet still allow for employees to stay late to finish up any necessary work.

For restaurants, energy efficiency is the name of the game. While it may seem to be a good idea to stick with a piece of equipment that is still working fine, you may be able to offset the cost of a new piece of equipment with the energy saving alone. If you can produce more food in a shorter period time while also saving tons of money on energy, that new piece of equipment can sometimes pay for itself in just a matter of months. Make sure you crunch all the numbers and leave no stone unturned when finding ways to save on energy because it is only going to become more expensive as we move forward.

Inventory Control

Another technique that can save you money is to monitor your inventory very closely. The more accurate you are with your stock levels, the less you need to order and have sitting around on your shelves. There are many great inventory tools that allow you to determine the right amount of a given item to keep in stock so you never run out but never order too much, thus you keep as little cash tied up as possible and eliminate the risk of losing money if certain items are perishable. There are even inventory systems that allow you to monitor how much liquor you have on hand using the camera on a smartphone or tablet, so there’s really no excuse anymore. Good inventory control procedures will also factor into the employee theft problem because you will notice a discrepancy sooner than later.

Guiding Customer Purchases

Guiding Your Customer’s Purchases Politely

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One of the best tools that your servers and bartenders have at their discretion is the power of persuasion. If your staff knows how to execute it right, they can guide your customers to making choices that they will enjoy more and will also yield you higher profits. However, if your staff is trained on how to do it politely, it can backfire and lead to a customer who feels under pressure from a pushy staff. Here are some techniques that can help you capitalize on persuasion while not turning off your customers.

Suggest Upgrades

The easiest way to add purchases to a sale is to offer higher quality items that are similar to their first choice. It can be a more expensive vintage of wine or a different drink altogether that you suspect they might really enjoy. This will make your customer’s experience much more enjoyable, and it will increase the size of their bill. Make sure to be helpful and friendly or you may come across as pushy. You need to know when your customer has fully made up their mind.

Handling Rejection

Much of the time, your customers will reject any type of suggestion because they already have their mind made up. However, sometimes they reject your suggestion because they simply aren’t interested in that particular up sale. If a customer criticizes your suggestion, that is a huge opening for you to offer something else based on the information they revealed. It’s a bit of an art form, but it pays off huge if you perfect it.

Add-Ons

Offering your guests add-ons is a great way to earn bigger purchases and improving the guest’s experience. For instance, if a customer orders a glass of Riesling, suggest a food item like brie cheese and crackers to accompany it. Wine and cheese go together wonderfully, and the additional sale will pad your bottom line as well.

Guide Their Eyes

If your customers are looking at a food or drink menu, you can easily draw their attention to certain areas that offer the largest margins. For instance, you could add a decorative border around your items with the highest profit margins and then point out something specific on that page. When their eyes look at the page, they will immediately be drawn to the items within the decorated area, and best of all your customers will think that they’ve come up with a decision all by themselves.

No matter how much you train and prepare your staff, there is always a learning curve to getting the skills of upselling correct. After all, it’s one part science, one part experience, and one part finesse, so it may take time to get right. But once you’ve mastered the tricks of the trade, guiding your customer’s purchases politely and discreetly will become second nature in your venue.

Happy Hour

Happy Hour Specials to Draw in Crowds

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Happy hour is by and large one of the most popular times for people to come to your bar, and if you do it right you can expect to see some hefty profits. If you have the right happy hour specials available, your food and drinks will practically sell themselves. However, many bar owners have no idea how to put together a set of specials properly, so they end up guessing and missing out on a ton of sales. Here are a few basic happy hour specials that you can offer your customers to draw in crowds and make a lot of profit. Though each bar is different, these should help to get you on the right track.

2 for 1

The easiest special to offer during happy hour is 2 for 1 rail drinks and domestic beers. People love getting something for free, even if it means that they have to make a purchase first. If you don’t have proper margins, this tactic will never work; so make sure you have everything figured out ahead of time. Optionally, you can do a 2 for 1 special on select types of beer or cocktails to maximize your return.

Discount Beer Buckets

Offering a discount on your buckets of beer is another great way to drum up more sales painlessly. Typically, you can work out a deal with one of your beer distributors to give you a volume discount on a certain brand of bottled beer since you’ll be featuring it in a promotion. Sell six bottles of beer on ice for a discounted price and you’ll be selling buckets left and right.

½ Price Appetizers

Food is crucial to the success of your bar, so including a food special is basically required for success. An easy way to do this is to offer ½ appetizers all through your happy hour. They aren’t going to be a huge driver of profits on their own, but your customers will stay longer and drink more because they can get something to eat and appetizers are typically pretty salty.

Food and Drink Combos

Lastly, food and drink combos are another staple special for happy hour. If you sell pizzas, you could offer a large one topping pizza and a pitcher of beer for one low price. Or, to capture the “singles” crowd, you could offer a cheeseburger and a pint of beer for a flat rate too. Combining a food and beverage purchase into one price will usually cause a lot of purchases, and you can even be strategic to sell certain items from your cooler or freezer if they are getting close to expired.

No matter what type of specials you offer during happy hour, the most important factor to consider is getting the margins correct. If you’re just blindly setting prices and choosing your specials, it’s never going to be profitable or draw in the crowds the way that you’re hoping. Us some common sense, think about what your customers might enjoy, and price things accurately to see a huge spike in happy hour business and your bottom line.

Employee Exit

Retaining your Qualified Bar Staff

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One of the worst things that you’ll ever need to deal with when you’re a small business owner is the departure of one or more of your most important and qualified staff members. After spending years finding and training the perfect employees for their position, watching them walk out the door to work somewhere else and having someone else come in to be trained can be very stressful and time consuming. The problem gets much worse when it’s your star bartender or server hits the road, so trying to increase employee retention is vital to running a successful bar and nightclub.

Though there are certain circumstances that are completely out of the control of both you and your employees, there are many reasons that bar owners lose employees that can be avoided. Here is a short list of reasons why employees quit so you can take the proper steps to rectify any workplace related issues that could lead to your being short-staffed.

Lack of Good Management

Management is the most important aspect of retaining your good employees. If your manager is not good at their job or can’t relate well with some or all of your employees, it may be time for a change. A good manager will communicate with your staff, keep updated with their needs and feelings, and keep your business running smoothly.

Staying Professional

Though many of your staff members and managers will form personal relationships that exceed the confines of your bar or nightclub, keeping a professional work environment is essential. When any employee feels that their personal space has been violated, they will seek employment somewhere else.

Poor Choice of Employees

Knowing who to hire is just as important as how you treat an employee once they’re on the staff, so make sure your manager knows how to interview people and check their references. Nothing leads to a vacancy in your staff faster than an employee who can’t do their job properly from the start.

Lack of Systems

Frustrated employees will always look for a less stressful work environment, and having a lack of systems in place is a fast way to accomplish this feat. Make sure your employees know what is expected of them and that their workday is somewhat predictable to keep your retention numbers as high as possible.

Lack of Positive Reinforcement

If an employee doesn’t feel appreciated in their job, they will look at other bars and nightclubs where they will be. You don’t need to give theme five figure raises; just an occasional “good job” to your bartenders and servers can be enough positive reinforcement to make the difference between a happy employee and one who is ready to walk out the door on a busy Saturday night.

Predictable Scheduling

Most people want a predictable schedule from their job, and jumping all over the place will lead to your best employees going elsewhere. Obviously, people will request days off and holidays will need extra staffing, but keeping your employees’ schedules somewhat fixed when at all possible will keep them happy and fresh for each of their shifts.

Lack of Opportunity

Most employees are interested in upward mobility that comes along with better hours and better pay. You should always promote from within instead of bringing outside staff into higher positions for your bar otherwise your staff that has been working hard for years will find a place where they’re appreciated a little better.

Though there’s no “magic bullet” for solving every scenario with your employees, having an idea of how to create a fun, productive, and stress-free work environment can go a long way. If you run your bar or nightclub properly and have the right systems in place, retaining your qualified bar staff and employees will be less challenging than you might think.

Hunting Season

Setting Up your Bar for Hunting Season

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With hunting seasons upon us, it’s only natural to think about capturing a piece of that business at your bar. Hunting season can be big business if all of the stars align properly for your bar, but the window is pretty narrow so you have to act quickly and decisively. Also, some bars rely specifically on fishing and hunting customers, and that opens up a whole different set of considerations. Here are some tips on setting up your bar for hunting season no matter what type of venue you operate.

Location Matters

First off, the location of your bar will play a large role in how you set it up for hunting season. Do you have a neighborhood bar and grill that just happens to get a large wave of hunters because of your location, or are you specifically out in hunting and fishing territory? Your bar’s location will determine if you setup the theme to be geared towards hunting year-round or if you will just supplement your building with decorations during hunting season.

Importance of Food

Food is also a major factor, no matter what type of bar location you’re running during hunting season. Groups of guys are going to be out in the woods from the wee hours of the morning until the darkness of night, and chances are they’re going to be tired and hungry. That means they don’t want to cook, but are almost certainly looking for a hot meal in their bellies. If your bar isn’t offering food, you’re not going to last long in that market. Also, you may want to open up early for breakfast during hunting season to become a “one stop hunting shop” for everything that the hunters need.

Lodging and Packages

Lastly, if at all possible you should try to offer as many services, including lodging, to the hunters as possible. If you have some land nearby, consider offering camping sites so you can keep the hunters nearby and utilizing your bar and other amenities. Also, try to offer things like ice, fuel, showers, laundry machines, and any other conveniences you can muster. Doing a load of laundry gives the hunters the perfect amount of time to grab some dinner and a couple of beers before they retreat to their cabin or tent. By keeping them coming back to your bar for everything they need, you can build loyalty and enjoy repeat business across the board.

In a perfect world, every bar owner would be able to offer a whole slew of great amenities to their customers and really bring in big business during hunting season. However, that’s just not viable for every location or building, so you just need to do the best you can with what you have at your disposal. As long as you decorate your building in a way that is appropriate for your location, offer food to your hungry patrons, and also offer as many amenities and services as you possibly can, setting up your bar for hunting season should be pretty easy and yield you some fantastic profits.

Reserved VIP Table

How to Avoid Double Booking VIP Tables

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For decades, bars and nightclubs have been offering VIP seating to large groups and high rollers. Traditionally, a person or their agent would make a phone call to the club’s host or hostess and they would write down the reservation in their book. This system worked very well because all of the reservations were kept in one centralized location, but it was far from perfect since human error played a role in the process. This meant that the VIP booking system worked most of the time, but there was no way to find out where the problem was if something was lost or entered incorrectly.

Flash forward to modern times, the way people make reservations for their VIP table has drastically changed. First came website bookings that allowed customers to book through an online form, then we saw the rise of smartphones with a whole plethora of apps that allow you to book a table at your favorite bar, restaurant, or nightclub.

With all of these different platforms and third party platforms that allow guests to book VIP tables, keeping all of the different reservations straight has become even more challenging. When you couple these methods with the traditional phone call system that s still in play, you can see just how tough it is to keep things organized and accurate. So how are you supposed to avoid double booking VIP tables? By putting in place the proper systems.

The first thing you’re going to need to do is setup a centralized reservation software system that is compatible with all of the latest third party apps that can accept reservations on your behalf. There are many options out there, so just do a little research to see which will work best for you. Next, you’ll need to make sure your staff is trained to use the reservation system so all of the bookings are made correctly. Here’s what you’ll need to do to make that happen.

  1. Create a unique username and password for each authorized employee. This will help you track statistics and any errors made in the booking process.
  2. Teach your customers how to add a reservation on a specific night and identify which tables are available.
  3. Make sure all of the third party apps that take bookings on your behalf are integrated in real-time for accuracy.

If you have everything setup properly and your staff properly trained, every single VIP table booking should come into your system without any possible conflicts. Having a centralized reservation system such as this will allow people to book from a wide variety of sources and everything will show up perfectly. This is the only way to truly avoid double booking VIP tables without fail, and every serious bar, restaurant, or nightclub owner should seriously consider investing in such a system.

End of Summer Party

Hosting the Perfect “End of Summer” Party

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Whether you’re looking to throw a party at your nightclub on Labor Day weekend or you are planning something closer to the Autumnal Equinox, it can be a huge opportunity to capitalize one last time on the lucrative summer months. Not only do things start returning to normal as soon as fall hits, but having the ability to go out and party start to diminish for the year as well. This means a huge groundswell of support and a jam-packed venue it you play your cards right. Here’s how you go about hosting the perfect “end of summer” party at your bar or nightclub.

Know the Crowd

The first thing you need to do in order to be successful is to know your crowd. This should be easy if you’ve been in business for long enough, but few times will it be as important to pay attention to as when you’re hosting a major event or party. When you know who you’re catering to, you can choose each aspect of the party accordingly to draw in the largest crowd possible.

Provide Entertainment

Food and drinks alone won’t fill your bar or nightclub during a competitive season like this; you’re going to need entertainment. At a minimum, you’ll need to hire a locally recognized band or DJ to get people in the door and boost the energy of your party. Not only that, but you should consider having other activities such as dart competitions or trivia games to help make it a bigger deal.

Great Drink Specials

Offering drink specials not only brings in more guests, but it can increase the size of each check. Make sure you have a great beer and cocktail special on the menu, and also consider crafting a special cocktail just for the party (even if it’s just a twist on an existing classic).

Charge a Cover

If you want your end of summer party to be profitable, you definitely want to charge a cover. Your customers are looking for an experience, so if you provide something fantastic they will always be willing to pay for it. We aren’t talking about a huge cover here; just something between $5 and $10 will do. You can even give them a drink ticket or two to offset the cost of admission, and then it is equivalent to having a two drink minimum policy.

Advertise

Lastly, you’ll need to advertise your end of summer party in order to get people in the doors. This is where the entertainment, games, and drink specials become so important because that’s what will generate buzz on social media. With the proper party elements in place and the right exposure, you can expect to see a pretty great turnout.

Overall, giving your customers what they want is more important than what you charge at the door. You’ll need a good mix of fun, entertainment, and good values at your end of summer party in order to be successful, but once you start hitting on all cylinders you can repeat the party every year with increased turnout and enthusiasm from your customers.

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