Break Even Point / Bar Design

To be perfectly honest, I wasn't very awake in class today. The first part of the day was spent manipulating the break even point, to see what information can be gleaned out of the equation.

A straight break-even statement will show you how much business you need to do to neither lose or make money, but if you have investors who want a return on investment (ROI), you can do a break-even calculation that doesn't go for zero, but goes for a dollar amount that would be an attractive ROI for investors.

The second part of the class was a discussion of the physical design and equipment needs of a bar. Behind the bar you need a lot more than just booze. Storage both dry and cold, compartment sinks, ice (various forms depending on the biz), glassware, tap systems, beverage guns, trash areas, all arranged in a way for maximum flow and hygiene. Various equipment, from blenders and mixers to bar spoons and muddlers all make up the specialized tool of the bartender, which in a serious bar can be regarded as a "liquid chef".

We spent some time looking at business plans of past classes, which all had a wide variety in the choices of information given and level of design, but all the competent ones had a minimum level of financial reports .

P and L Statements / Concept Presentation / Bar Design

Today began with a passioned discussion over why people go to bars. There are different kinds of customers. Though some people fit more than one description, they are broken down thusly:

• Diners at restaurants which have drinks
• Drop-in customers on their way elsewhere
• Meet-and-go customers
• Entertainment seekers looking for relaxation or stimulation
• Sports fans
• Regular patrons of a neighborhood establishment

"Meet-and-go customers" was perhaps the corniest euphemism for people looking to get laid; the textbook description is kinda hilarious, so here ya go:

Meet-and-go customers. These individuals are looking for a relationship connection, whether a date for the evening or a longer-term plan. They go to singles-bars or "meet bars" that are attractive to others like themselves. They stay long enough to meet someone whom they would like to spend the evening with, and the tow may or may not move on to a place where the food and/or the entertainment is more suitable for leisurely conversation and an evening together. Today most singles bars include dancing and very-late-night hours.

Yeah, another place where the food and/or entertainment is more suitable....like mah pants!!

Anyway, as with any restaurant, the needs and wants of a bar's customers determine the concept, which breaks down into three fundamentals that reinforce each other: Design & Decor, Service, and Food & Beverage. Each group of bar customers, as listed above, has its own needs that must be catered to in these three areas.

There are certain standards that all bar customers expect in the U.S. Number one is a large variety of alcohol. Unless you desire something esoteric, chances are a typically stocked bar will offer you hundreds, if not thousands, of combinations and concoctions. The other main expectation among customers is that the quality of the drink matches the quality of the establishment. For example, one who orders a gin and tonic at a local dive bar can expect well gin and tonic out of a soda gun. From a 4-star restaurant bar? An expensive brand gin and house-made tonic with a juniper berry garnish.

We looked at the space requirements of a properly designed bar. Between the back bar, the space for people inside, the front bar, the rails, the space in front and behind a stool, the total space for ONE bar customer is 28 square feet (2 feet wide by 14 feet deep). That's a hell of a lot of space to dedicate to one seat. We also looked at layouts: How one places the bar in relation to the seating, dance floor, and restaurant will influence flow and either work with or fight against the concept (and the kind of customer that's being served). An airport bar will be long and skinny with an open front so that people can get in and out quickly to make their plane. A pick-up joint will have a central bar where people can congregate in 360 degrees and check each other out from all angles.

Mid-class, Maria and I gave presentations on our concept. Maria's idea centered around a very straight-ahead tavern with an extensive American bar menu. I used a PowerPoint presentation to give some details of a neighborhood pizzeria and pasta shop, about 30 seats, maybe in Brooklyn, named after my mom's maiden name (with my mom's image as a young hipster all over it -- see enclosed).

The last part of the class was an exercise in reading and understanding a profit & loss statement. It looks like a big scary sheet of numbers flying out in all directions, but when looked at part by part, it's actually quite simple. First part is the money you take in, broken down by food and bev, then added up. The second part is what you spent just on food and bev, and the third part is what you spent on everything else. The money you made on food and bev after paying for the food and bev is the contribution margin, and that margin should cover all expenses AND give a profit to the owner. And man, the expenses just go on and on. By analyzing cost percents (cost of an item divided by total sales) across different years, one can figure out what's efficient and what's slacking. Really, there are multiple ways to read the numbers, all true but all suggest different actions to be taken. Accounting, it's a hell of a game.