HIDE is a serious cocktail destination located in the Deep Ellum neighborhood of Dallas, TX. The operators have learned several valuable lessons in the 33 months they’ve been open.
Deep Ellum is similar, at least on paper, to Sixth Street in Austin, TX. There’s plenty of foot traffic to feed bars and restaurants, and the area is lively, edgy and thirsty for quality drinks.
Beverage director Scott Jenkins and owner/partner Nick Backlund identified the potential for a serious cocktail scene in Dallas. HIDE’s many local, national and international awards show that Jenkins and Backlund were right about that need and fulfilled it spectacularly.
We spoke with Jenkins to share with you what he’s learned over the past several years. This is part one of a three-part series that looks into HIDE’s funding, opening, expansion, beverage operations, and menu development.
In part two, we’ll share what Jenkins has to say about learning to be an effective operator and hiring staff.
Jenkins and Backlund were able to secure funding for HIDE without approaching a bank or multitude of investors. That puts the operation in a somewhat unique position, something not lost on Jenkins. He and his partners are aware that isn’t the norm for most owners and operators.
However, Jenkins has still learned much even working with just a few partners. First, whether someone takes on several investors or many partners, they should make sure they want to be associated and aligned with those people.
It can be tempting to just take money from whomever is offering it when someone is close to realizing their bar or restaurant dream. But unless investors and partners are of the explicitly and contractually silent type, the more funders often means the more voices that want to be heard. And the more voices there are speaking for an operation, the more different directions the business can be pulled.
Those directions may not align with the concept, hurting the odds of survival and success. Funding isn’t a one-way street, even if the person or people seeking capital are in a seemingly weaker position than those who have the money. Potential owners and operators must prove their concept and themselves to investors and partners. But they should also vet their potential investors and partners to make sure they want to be closely associated with—and financially beholden to—those people.
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Jenkins points to the undeniable importance of open communication in partnerships. He and his partners communicate every day. They don’t have to answer to a bunch of different investors, but they still must make things work and pay back the initial offering. When it comes to investors or partners, clear goals and lines must be agreed upon to keep operations on track.
In Jenkins’ case, he aligned himself with the right partner in Backlund. Running a bar can—and very likely will—lead to many sleepless nights and stressful days. Their first year, Jenkins and Backlund were spending 70 hours a week at HIDE. When Jenkins has felt overwhelmed by challenging times, Backlund has been there to say, “This sucks but we’ll get through it. Not everything is your fault.”
Investors and partners will want a return, of course. Jenkins and Backlund are aggressively working to pay down the initial investment, which the former says was more than $500 thousand and less than one million dollars. He says that if people think they’ll open a bar or restaurant and suddenly be rich, they’re woefully mistaken.
Jenkins has employees who make more money than he does from HIDE. This is because while Jenkins and Backlund could pay themselves more, they’re choosing to reinvest in the operation and put money toward paying back the initial investment.
HIDE was profitable its first year. It was more profitable in its second year. And it’s on track to have been even more profitable when its third year ends. Still, Jenkins and Backlund aren’t taking big paychecks from the operation.
Rather than assume they’ll be rolling cash soon after opening their doors, Jenkins advises new and future operators to focus on learning from their mistakes, educating themselves about the business, understanding their strengths and weaknesses, and working on their legacy. After all, they need to prove themselves, and doing so can lead to an easier time opening additional units or concepts.
HIDE, it turns out, isn’t the first concept Jenkins and Backlund created. The duo, with several years of hospitality industry experience between them, came up with two concepts before creating the idea of HIDE.
Their first concept threw them into the dark, cold deep end before they came close to opening doors. Meant to be located in an area with high foot traffic that was near a wealthy neighborhood, their application for a liquor license was protested by a single person. At that time, that was all it took to halt a bar project in its tracks.
Jenkins and Backlund spent two years of their lives and tens of thousands of dollars to fight the lawsuit. They knew they were in the right. They were ultimately granted their liquor license, proving themselves in court. But the experience had soured them on the area.
They had spent two-and-a-half years designing their first concept. HIDE came together in just six months, and they were able to go from buildout to doors open in just 10 weeks. As stated above, Jenkins and Backlund knew that Dallas was craving a serious cocktail scene. As Jenkins explains it, cocktail culture is relatively young in Dallas.
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HIDE was, at the time, located in a section of Deep Ellum that had been gutted by the developer who owns it. Go there today and you’ll see a lively, bustling area absolutely slammed with people on foot, bikes, scooters and skateboards. But just about three years ago, people weren’t used to walking the sidewalk on which HIDE is situated.
For six weeks, HIDE was “an island unto itself,” says Jenkins. They had spent “more than most people would want to spend on their first bar,” purchasing specialized equipment. There was also the challenge of making a small space look and feel much larger. That was achieved through thoughtful design and making the bar the central focus. People needed to be encouraged to seek out HIDE, so significant funds were also dedicated to marketing.
Investing in marketing and promoting has paid off. The duo recently took over the lease on a neighboring ice cream concept that failed, allowing them to expand by 1,200 square feet. HIDE had become so successful that they needed to turn people and parties away because they were at capacity, something Jenkins absolutely doesn’t enjoy. Now, they have space for private events, cocktail classes, and overflow seating on busy nights. The space also allows them to tap into another aspect of Dallas dining and drinking culture: the preference for patio and rooftop seating.
There’s a silver lining for Jenkins and Backlund’s initial concept. For close to three years, they’ve been applying what they knew before opening HIDE and learning about what they didn’t know, as well as learning from their mistakes. Their first concept should open some time in 2020 in a better area and space than was planned initially.
Be sure to join us for part two of this three-part series, during which we’ll be looking at learning, leadership, hiring, and firing.