Industry Analysis- Nightclub and Restaurant

The hospitality industry is a fifty-seven billion dollar industry, which generates twenty percent of Florida’s economy.  This industry is made up of restaurants, nightclubs, and hotels.    There is much potential in South Florida for restaurants and lounges to become prosperous with the right management.  

Political factors of the restaurant industry all vary from government imposed laws.  Restaurants must undergo various health inspection tests from all different areas of the restaurant from kitchen to seating areas.  Also, other factors that come into account would city limitations regarding hours of service and age limits.  These factors can all cut in to overall profit.  Depending on your target clientele, your hours of operation are crucial to occupancy potential.  Lastly, another issue political factor would include states liquor licenses.  Prices on liquor licensing can be difficult to get and prices are out of your hand.

Along with the political factors come economical environmental factors that are in the realm of the restaurant industry.  Many cultured restaurants or food venues tend to buy and use ingredients and products from overseas.  Nothing says “authentic” more, than original recipes and ingredients from the country in which your restaurant is culturally tied with.  This leaves you with sometimes-expensive costs.  Overseas prices and shipping can be factors that restaurants must deal with when evaluating their spending.   Also government’s taxes on these items are another un-avoidable spending.  It is important in the restaurant industry to keep in mind these expenses and carefully plan your pricing and profits.  Restaurants cannot support dead weight for long.

The social factors in the restaurant businesses are extremely important as well.  I believe these factors are the most important and should be one of the mostly closely examined.  Since the restaurant industry is considered a luxury and not a need, it is imperative that the restaurant has a niche and that “x-factor” that make people want to attend.  Economic recessions and loss of jobs are all factors that can hurt a business especially those businesses that are not a direct need for people.  That is why the restaurant has to be unique and allow people to feel a sense of freedom from stress when they arrive.  Though times are tight, it has been shown that many people will actually spend money in times of economic lows to feel better.  Also, it is important to follow social trends in eating.  Restaurants have to notice these trends of healthy and organic eating.  Many food establishments have organic sections on their menus so they can target a wider range of clientele.   These are basic fundamentals of all businesses.  The social end of the market will always be a great contributor to the factor of clientele that your business will generate.

Lastly technological factors are important to analyze as well.  Depending on the restaurant theme, these factors can make or break the business.  Technology in the restaurant industry can be broken into two sections, technology used for the clients “experience,” or technology used to run the business. When talking about technology in the environment of the restaurant there are things to look at. Dining out is more than just an alternative to cooking at home; it’s an experience.  The experience is taken from the environment of the restaurant.  This is wear the technology aspect is present.  For old school restaurants with a “homey” feel, this may not need to have fancy lights and decorations.  However, restaurants that maintain a sheik modern environment and provide night lounges at night need to be up to date in technology.  This technology can be anything from lights to audio equipment, and any other trends that are happening in the nightlife market.  The second factor of technology would be the operating aspect of the business.  This is crucial in any type of restaurant.  Up-to-date computer software for managing money and operation will provide fewer mistakes in managing money and other tasks, and smoother transactions between employee and clientele.


Reference


http://www.nciaa.com/content.aspx?page_id=22&club_id=160641&module_id=29898


http://www.anythingresearch.com/industry/Bars-and-Night-Clubs.htm

Bringing In clientele to your nightclub

Design, layout and overall vibe of a club are all major factors in the longevity of success for nightclubs.  In this industry, you must always stay up to date and "fresh" to ensure your clientele does not get bored of the same routine aspects your club has to offer.  When researching about some of the best clubs in the nation, you cant help but notice how strong their marketing and promo teams are.  The biggest marketing strategy nightclubs use is working with promoters. These techniques and strategies can help keep your venue up to date and ensure your club is always “poppin.”

Take advantage of promoters!  There are many websites that you can look up that will have promoters give you their information and clientele that they can bring into your venues.  Working with good promoters will help keep your venue packed.  The club business is much like every other business when it comes down to the fundamentals.  It is a “give and take” business and the sooner you understand that, the more successful you will be.  For example, high end promoters that have the ability to bring in main stream, high end DJs will often pay out of their own pocket to bring these acts to your club.  In return, they will ask for door sales and sometimes bar sales percentages.  This is where that “give and take” decisions need to be made.  These percentages will vary based on who the act is.  Many club owners are skeptical about giving percentages of sales to promoters however they do not see the potential there club will have by doing so. 

The best way to have steady clientele is to have people physically come in to your venue and have a great time.  More people will come to your venue if big acts are there to perform.  Therefore keeping good relationships with promoters and making good deals will help you do future work, which can potentially help always keep your venue, packed and keep the reputation as “the place to be.”

Scoping the Clientele Demographics for a Nightclub

1.    Scoping the Clientele Demographics for a Nightclub

            I have grown up in the club and restaurant industry my whole entire life.  Growing up I always dreamed about opening something up in south Florida, whether it be Fort Lauderdale or Miami.  But it was not until college that I saw and realized the great potential that Orlando has in the nightlife scene. UCF is one of the top 5 biggest colleges in the country and only growing.  After attending college in the UCF area for three years, I have noticed many trends that have been occurring among college students and the nightlife environment.  Musical trends such as House music and progressive dance beats have sworn the nightclub scene in Miami and have started making its way up north.  Clubs are now basing their design towards loud music and crazy lights for their guests. 

            There is definitely a market for nightclubs in Orlando especially close to the UCF campus.  Many college students find themselves driving a half hour away from campus or even taking busses to go downtown to get that true nightclub experience.  UCF students that choose to go out and stay local are subjected to run down dirty bars.  There are no places close to Orlando where you can dress up and go out to a club that has over the top lighting and sound fixtures a long with great acts and Dj’s.

            If maintained, and done right, there is a very lucrative potential in nightlife venues close to UCF.  There has been one other club that tried this approach and was very successful in the beginning.  Managerial issues and other factors led it to close and reopen as a bar, however I truly believe you cater to this new electronic music trend it can be quite the return on your investment.

References:

http://www.ibisworld.com/industry/default.aspx?indid=1685

http://nightclubpromotersguide.com/tips/nightclub-promoter-tips

choosing demographics

When designing a venue whether it be a bar or club, it is important to always remember where your location is and what you want your demographic to be.  Depending on the age groups that walk into your venue, it can have a dramatic difference in the overall look and feel for your venue.  You must always make responsible and careful decisions when choosing your demographic.  For instance, Orlando has many grungy gritty college bars out by UCF.  They attract a lot of business at night from college students from valencia and UCF.  The college bar scene in orlando can be very lucrative if done right.  There are over 65,000 students at UCF and every four years you have a flush of students.  The reason I bring this up is because though I love the idea of college bars and believe I could run one, where I wish to open my location would not be able to support a college bar.  Im looking into buying in a wealthy suburban area in south Florida.  The suburb is not filled with crazy college students, but rather middle aged wealthy families.  A grit grunge bar would fail miserably here where as in orlando be extremely lucrative and well off.
IT is very important that the research is done before you fully design the concept of your venue.  You must have a strong confidence in your place so that it does attract that target market of clientele.
There is a strategic science in bar set up as well.  It is very important after establishing your target market you design the bar in a way that will attract them into steady business.  Everything from the bar hight to the shapes of the glasses will affect your target market.  The best route is to really study and establish the industry and what different age group get out of nightlife and then carefully design your venue to fit those needs.

References
http://nightclubpros.com/

Why bars fail so quickly

There are a lot of different factors as to why bars can close within months of opening.  Like in any business, poor manage will be the death of your company.  But aside from that, there are many other factors you must consider about this industry and understand how it can destroy your company.

Inventory is one of the most important things to stay up on.  Bars are very heavily cash based.  Also, you make a substantial amount of money off of liquor sales.  It is very easy for employees to steal from you if your are not keeping a strict inventory. It is important you monitor how much your bartenders are pouring based off your liquor count sheets at the beginning and end of every night.

Your design and idea is another crucial aspect to the longevity of your bar.  It is very important that you stay on top of your entertainment.  Bars get old very quick.  You must always give an edge to your place and have something that can draw customers into your place.  Make sure the mood is appropriate for your concept and brand.  A lot of business is relied on your overall brand.

Lastly is product.  At the end of the day your product must be the overall reason why people come in.  This can range all the way from the food you serve, to how the drinks are made.  There is a science in both and mastering your food and drinks will guarantee customer satisfaction which will be the driving force for the steady business.

References:

http://www.nightclub-business.com/forum/showthread.php?2484-What-Percentage-of-bars-fail-in-first-year

http://www.entrepreneur.com/article/41460

Bar/Nightclub podcasts

Though it was very hard for me to find podcasts that were at least 30 min in length, I was able to find a lot of shorter videos and articles.  After researching my industry for this blog assignment, I was very pleased with what I have learned.  In the short podcasts that I was able to find, I learned some steps and keys to opening and operating a functioning bar.

A lot of suggestions amongst bar and night club owners are strict understanding and knowledge of inventory.  Nightclubs and bars are huge cash money business which can leave a lot of potential for theft and improper sales.  Supposedly keeping a firm check of inventory can make or break your bar.  Not only will it help you avoid theft, it will also help you keep track of how much you need and use per night.  Nothing is worse than looking like an idiot and not having the proper supplies for your customer.  Keeping a well balanced knowledge of inventory will help you project sales and supplies for busy, regular and slow nights.

Next I learned that you must invest substantial amounts of capital into your entertainment.  Bottom line, a vodka and cranberry taste the same everywhere you go.  What will establish your place is the experience people will get upon attending.  It is very important to always have modern and attracting artists and DJS perform at your venue.

Maintaining your intellectual property is huge in the night club industry as well.  Successful clubs become so successful by building their look and brand.  If you do not proceed with the proper filing and managing of your intellectual property, it can destroy you in the long run by sucking out all the creativity your venue offers.

Here are links of all the videos and articles I used to research this industry

http://www.artistshousemusic.org/videos/opening+a+club+or+venue+three+things+you+absolutely+positively+need+to+know

http://www.artistshousemusic.org/videos/good+and+bad+days+in+the+life+of+a+club+owner

http://nightclubpros.com/starting-a-night-club

http://www.powerhomebiz.com/vol141/nightclub2.htm

http://www.ehow.com/video_4755463_calculating-cost-starting-nightclub.html

http://smallbusiness.chron.com/start-nightclub-business-2085.html

Bar Liability

http://www.lpklaw.com/premises-liability-lawyer.php

http://www.legafi.com/lawsuits/news/673-jet-nightclub-waitress-files-sexual-harassment-suit-

http://www.washingtonpost.com/blogs/soccer-insider/post/dc-uniteds-charlie-davies-files-20-million-lawsuit-against-nightclub-and-party-host/2011/10/18/gIQAg9ETvL_blog.html

After researching numerous articles about night club liabilities, I have come to the realization that serving liquor can cause a lot of stress when it comes to safety and liabilities.  Customers consuming alcohol tend to fight a lot more and make un-rashional decisions then when they are sober.  With this said it is very important you have security.  Also, it is important your security guards treat the situation properly or else lawsuits will be made for un-just violence.  Lastly women employees are a big factor on successful clubs. With that said you must make sure they are in a safe work environment and are not subjected to sexual harassment from both other staff members or customers.

Bar Manager

I have been proceeding to work on opening a college bar through out my masters career at Full Sail University.  I have done many projects a long the time of this course to help me better understand the logistics and business behind these bars.  The last person I had interviewed was a manager at a popular college bar by the name of "Scoop Orlando."  That interview was helpful for me because I received a lot of advice on what it takes, and what needs to be done to open a bar.

During this interview for this blog post, I was fortunate enough to meet and become friends with yet another manager for a different club up here.  I brushed upon a few start up questions however, my main focus was to get advice on how to manage and run a proper bar, once it has already opened.  I began talking with Mike Rubino, who has been managing a college bar in orlando for 3 years now.

He began to stress to me how important it is to hire the right employees.  According to mike it is very easy for your employees to steal from you or cause you to loose money.  It is almost an inevitable problem.  To make a college bar work, your employees (bar staff, promoters etc.) must be able to spread the word about your bar and bring people in.  Thus, the need to hire a good mix of people who are in "Greek Life" (fraternities and sororities) and others as well. The problem that can occur is these employees will bring people into your bar however not charge for drinks or put excessive alcohol.  This is just like any business though, you must maintain strong management and make sure you have people to watch over all aspects of your business.

Another tip he gave me was promotion.  You can never have too much promotion.  It is important that your drinks specials and any other product is easily available to college students.  It is a smart idea to invest in a good promo team to help get your events and drink specials out to your customers.
Other than that, the rest of his help was little things to do to help you stay organized and on top of things.  Being organized will help avoid a lot of hassle and chances for things to go wrong.

I felt a lot better after speaking with mike because I feel as though I now have a good understanding and head start on not only the start up procedures but also the management and running of the business.