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 .

Balance Sheet / Beer

Class started with In the News, beginning with a classmate who never speaks, was totally unprepared, and makes one wonder why she bothers. The New York Times had an interesting article on how the recession is making stupid people with too much money "down-scale" their weddings, though they're still spending a whole hell of a lot, just on burgers n' shit instead of canapes and caviar. Another good article on the Shinn Estate of the Northfork -- only 8 years old and producing good quality wine, the fact of which runs counter to Richard's outline of setting up a new vineyard (which seems near to impossible to get a good wine out of a vineyard within 8 years).

So two gals dined and dashed from an IHOP, then promptly crashed their car into said restaurant. The father of one of the girls were befuddled, due to the fact she had $200 in her pocket...

Next up, we were given some numbers and we constructed a balance sheet, slotting items into current or fixed assets, short or long term liabilities, then figuring out the owner equity, no biggie. I can see the appeal of being an accountant -- figures are both reassuring facts, but at the same time by the way you arrange and make them interact, you can make them tell very different stories. And by the same measure, figures that seem to say very little can say a whole heck of a lot with a little bit of poking and prodding. What I'm learning: I'm definitely going to have to hire an accountant when I have my own biz.



Back into alcohol today's topic was liquid bread, a.k.a. beer. We reviewed the steps of brewing beer, then watched a film clip f a show I actually watch at home - the "Making Beer" episode of Modern Marvels. Malt is barley soaked in water to slightly sprout it, before roasting. Only in the U.S. are "adjuncts" allowed in addition to malt: corn, rice and cheaper grains that give a lighter product....and a different taste. In Europe, add these grains and you can't call it beer legally.

Funny, sake is called rice wine here in the U.S.....for tax reasons related to it's alcohol content. In truth, it is technically rice beer, as it is brewed, but without malt, with rice taking on the starring role.