Start Up And Stay Up
Pitfalls to Avoid When Opening Your Own Nightclub or Bar, Part 2

Last month, we looked at some of the key considerations when setting out to open that first bar. These are some mistakes I have seen and/or repaired as a nightclub and bar consultant. Of course, we could not possibly fit every problem you could face into this segment, but here we raise some major issues/problems that I have seen kill a project. Check out the February issue of NCB for Part 1 and the issues we tackled there. Here are more that you will want to think about up front to save time and money.

Liquor License Issues
Do not assume that you automatically will be able to get a liquor license. Always retain the services of an attorney who has experience with liquor law. Also make sure that your location is zoned for the appropriate liquor license(s). Laws vary state to state, county to county and city to city. Make sure you are approved, your business location is approved and all other partners involved are approved before you go any further.

Budget
Make sure your budget is realistic and factual. Itemize every cost and expense and do not allow carrying/holding costs to sneak up on you. Once you pull the trigger on the project, time is of the essence.Do not forget things like tax, installation and delivery. When you finally know and have your final bottom-line budget number down to a science, add 20 percent and you will be lucky to hit that number. Always add for contingency expenses. 

Architects
Make sure you find and use an architect firm that has specific experience with bars and or nightclubs. Failure to do so is a common and costly mistake for many clients and associates. An architect may come hightly recommended, but they must have industry experience. Grill them, get referrals and visit their recent past projects. The more experience they have, the better and faster they will work for you. You also will find out they have great working relationships and are great liaisons to city, state and/or municipal authorities such as  the heath department, fire inspectors and building inspectors. In this department cheapest is not the best. I cannot stress this enough.

Contractors
This is huge! Remember two words to research and know before you agree to any contract: change order. A change order will kill your projected or expected budget and construction cost. Beware of this when rehabilitating an existing or older building. I always recommend a cost-plus deal where you negotiate an agreement in which the contractor completes the job at the cost of the project then adds a percentage to the gross cost. This percentage varies depending on construction costs in your market. Again, seek referrals and visit recently finished projects. As with architects, when dealing with contractors, the cheapest is not the best. Make certain that they have bar and/or nightclub experience. A higher bid on the project may be more acceptable if they are completing your project faster. Whether it’s a remodel, new build or rehab project, talk to past clients and visit recent projects. Architects and architecture firms are a great source of information on reputable and competent contractors. 

General Managers
General managers are worth their weight in gold. If you do not have one already I urge you to recruit one with a proven and successful track record. Offer great incentives such as performance bonuses, profit sharing or even future partnership. There may be some great future GMs hiding in the shadows of existing GMs of local or nearby competitors. The only reason they are not GMs may be due to the fact that they are caught in industry politics. Interview many prospects and always weigh your options. Get the word out, and let everyone know that all inquiries and interviews conducted will be confidential, and keep to your word. You never know who just may show up for a new opportunity with your business.

Timelines/Deadlines
Time is money, especially in this business. I cannot stress enough the importance of knowing and establishing timelines and deadlines, especially when in the process of leading your business to your grand opening day. Make sure you are aware of problems with construction or remodeling. When it comes to custom furniture, equipment, printing or initial liquor orders, all this must be taken into consideration. Unless it is in your hands, make sure you are tracking it with a timeline. For specialty items, add contingency time for good measure.

Promotions Schedule
Know your promotion calendar and schedule. Promotion begins the day you commit to the project. Have it mapped out, from your soft opening until your first year anniversary date. Make a promotional calendar/schedule. Make sure to include major events and special promotions and holidays. Have materials ready to go the week before each. Do not get caught behind the promotion curve.

Staffing
I am a firm believer that the GM is the captain of your ship, and the captain must know his crew. Include your GM intimately throughout this process. Initial staffing of a bar or club can be a nightmare if you do not know what to look for or how to sort through the garbage. A job fair is a great way to begin initial staffing. Beware of being the new bar or club. You will attract all the fired staff who were caught stealing or cheating by past employers. Check references and contact past employers, and make experience almost a must. Insufficient preparation of staff is a common mistake — most common when other deadlines are not reached in time for grand opening. Make sure your staff is familiar with your new business. 

Organization/Roles/Communication
The larger your nightclub or bar, the more employees obviously you’re going to have. In the very beginning make sure every employee meets and is familiar with one another. It is also important that all employees meet, recognize and know the ownership, management and all their colleagues. It is important that each knows his or her duties, roles and responsibilities from the very beginning. Do not underestimate the power of continuity and communication. Instill it and demand it. Your customers will thank you for it.