Wealthy bar operators think much differently than their cash-strapped counterparts. Anyone can buy a bar, but it takes a different kind of animal to build an empire in hospitality.
After working with fascinating characters who operate multiple venues, I have compiled five concepts which I have confirmed are a commonality among all of the titans of the hospitality industry.
Rich Bar Operator Idea #1
A struggling bar operator finds customers to make sales. A rich bar operator makes sales to find customers.
Total lifetime value is more profitable than a one-night stand. The average guest check value in the industry hovers at approximately $30. However, if that person is a repeat guest at least every two weeks, they’re worth $780 over the year. If that guest maintains that level of patronage over the course of three years before they lose interest in your business, move out of town or die, that’s $2,340 in overall spending.
So, here’s a good question to ask: If you know the spend per each guest for your business and can determine a total lifetime value for each guest, how much would you spend in marketing dollars to attract them? Better yet, how much would you spend to retain them, if that meant you could stretch the average relationship out from three years to five years, or even 10 years and beyond? When you quantify your marketing investment against the total lifetime spending of your guest, you will see why it is important to invest in tools that allow you to constantly communicate and maintain relationships with your customers.
Rich Bar Operator Idea #2
If you couldn’t make it without a lot of capital, there’s a good chance you won’t make it with a lot of capital.
This is not referring to the presence or lack thereof of financial backing. This refers to the age-old comparison of resources versus resourcefulness. According to my father, his generation could walk 10 miles to school every morning, barefoot, through several feet of snow. In other words, they could push through obstacles to accomplish what needed to be done. Every hardened business person is familiar with the feeling of being uncomfortable in myriad situations, and they know how to fight through that feeling even when they are seemingly empty handed and stripped bare of resources.
There are many, many big, bloated companies that I have worked with over the years that have lazy managers who have, quite frankly, been spoiled with too much financial backing. They have enough resources—what they lack is resourcefulness. Successful operators squeeze every drop out of the resources they have and can make it work despite not having all their “ducks in a row.” Even if they don’t have it, rich operators are confident they can find the resources required to complete a project.
Rich Bar Operator Idea #3
Being successful in the bar, nightclub or restaurant business does not restrict one to this industry.
I know many operators who, like myself, have diversified business interests into other industries. Even though they are moguls of hospitality, they also have other interests in oil and gas, real estate, technology, and even businesses on the supply/vendor side of hospitality.
This kind of attitude is vital to bar, nightclub and restaurant success as the hospitality industry is under attack from multiple angles: increasing costs, lower overall consumer spending, and therefore lower profitability. I know many operators at the helm of big companies who have confessed that they are ceasing expansion plans until the economy gets better. However, this does not mean they’ve stopped expanding their businesses; it just means applying their expertise in different directions.
Rich Bar Operator Idea #4
Planned work is work that gets done. Everything else is just talk.
I have a good friend who sits atop one of the largest nightclub operations in the city. He tells me that during his staff meetings with all of his managers, half of the time is dedicated to assigning “to do” lists to his team, and the other half is following up on the previous meetings’ “to do” lists. As he tells it, staff meetings without assigned tasks and deadlines are all talk. When you plan your work, set deadlines against tasks and hold everyone accountable, things get done. Companies that don’t do this often fail.
Rich Bar Operator Idea #5
Rich operators inspect their venues to ensure staff compliance.
It’s not enough to assume everyone under your command is actually meeting your standards and following your procedures. Rich operators are known for conducting mystery shops of their own venues to see what their guests see, phoning in randomly to see if phone protocol is being followed, and employing experts like myself to go in and report on operations directly to the top of the food chain. If you only assume things are being done, there’s a good chance it’s not getting done properly. Winners inspect their venues.