Starting a bar | KRG Hospitality

AI-generated image of a closeup of a loan application and pen

October 4, 2024by David Klemt David Klemt No Comments

The Banks Have it Wrong

The Banks Have it Wrong

by Doug Radkey

It’s widely assumed that a well-written business plan will impress banks and SBA-type programs, and secure the funding required to launch a hospitality concept.

When starting a bar, restaurant, or hotel, most people are told exactly that: “You just need a business plan.”

The problem, however, lies in how these business plans are created. Too often, aspiring entrepreneurs turn to fill-in-the-blank templates provided by banks or online resources. They believe that simply completing the form will open the doors to financing, and start them on the path to building a successful business.

Unfortunately, this approach can do more harm than good. Let’s explore why the traditional reliance on business plan templates, including AI-generated business plans, can set both businesses and lenders up for failure.

In this article I dive into real-world examples, examine the success and failure rates of loans in the hospitality industry, and outline why banks and other programs need to rethink their loan approval processes to reduce risks for not only themselves but the entrepreneurs they serve.

The Problem with Business Plan Templates

Imagine this scenario: You’re excited to open a hospitality business, but you don’t know where to begin. You do some research, and learn quickly that you need a business plan to secure a loan. The bank or Small Business Administration (SBA) offers you a convenient template to complete, or you find one online that seems like it will do the job. You fill in the blanks, submit the plan, and, to your delight, the bank approves all or a portion of your loan.

However, the approval doesn’t mean your business plan is actually sound. Read that again.

It only means it meets the basic requirements of the bank’s loan approval checklist. A template provides a false sense of security, making entrepreneurs think they’ve covered all their bases when, in reality, crucial aspects of the business are left unaddressed.

For example, I recently reviewed a business plan for a client who had used a bank-provided template prior to our engagement. The plan was approved by the bank, but upon closer inspection, I found numerous errors: the start-up financial projections were unrealistic, the cash-flow analysis was incomplete, and crucial aspects of market analysis were missing.

The result? The project is on track to run out of money before it even opens its doors.

This example highlights a troubling issue: Templates don’t provide clarity, and they certainly don’t prompt critical thinking about the true costs to start, and the real challenges that the business will face once it’s operating.

The Risks of Using Templates

Business plan templates may seem like an easy solution, but they come with significant risks.

False Sense of Security: A completed template may look professional, but it doesn’t guarantee that the plan is sound or comprehensive. Key elements can be glossed over, copy and pasted, or simply misunderstood.
Lack of Critical Thinking: A template doesn’t ask tough or industry-specific questions. It doesn’t force you to analyze the competitive landscape, identify potential risks, or develop a clear financial strategy around a unique concept.
Inadequate Financial Analysis: Templates often provide a basic structure for financial projections but fail to help you understand the true costs of starting and running a business. A template won’t be specific to your concept, your revenue and cost channels, or industry benchmarks. The template won’t catch errors in your financials, leaving you and the bank exposed to significant risk.
Inability to Stand Out: In a crowded market such as the US, Canada, or Europe, differentiation is key. A cookie-cutter business plan won’t help you stand out from the competition. Despite handing them out, banks see thousands of these plans, and if you don’t demonstrate why your concept is unique and viable, you’re setting yourself up for denial.

The Dangers of AI-Generated Business Plans

As technology advances, AI-powered business plan generators are becoming more popular. I’ve seen a few ads for them over the past few months.

These tools claim to be able to create a business plan in minutes, promising efficiency and ease. However, relying on AI to write your business plan is just as dangerous as using a template. The same issues apply: lack of clarity, shallow financial analysis, and the absence of critical thinking.

AI-generated business plans may provide a surface-level solution, but they cannot replace the deep analysis required to make a business successful. Business plans need to be customized and thought out thoroughly, with insights drawn from real-world strategic planning.

Hospitality Industry Loans: Success and Failure Rates

The hospitality industry—particularly the accommodation and food service sectors—has one of the highest loan approval rates, but it also has some of the highest operator failure rates.

According to the U.S. Small Business Administration, in 2022 alone, 6,297 loans were approved for the accommodation and foodservice industry. These accounted for 13.2 percent of all small business loans, and 19.2 percent of total loan dollars. The average loan amount was US $784,768.

Despite these impressive loan numbers, the success rate of a business in this industry tells a different story. Only about 20 percent of hospitality businesses make it to their fifth year, and the average time to pay off a business loan ranges from five to ten years. The failure rates are driven by various factors, including cash-flow problems, a lack of market understanding, and poor financial planning.

So, why do banks continue to approve business loans based on inadequate business plans?

The Need for More than a Business Plan

Each reason for a business failing points to one underlying cause: lack of strategic clarity. In many cases, these businesses began with a standard business plan but skipped the other non-negotiable playbooks truly needed to be successful.

A well-rounded approach to strategic planning includes much more than a business plan.

Aspiring or seasoned bar, restaurant, and hotel operators need to develop feasibility studies to determine whether their business models can succeed in their target market. They also need concept development plans, prototype drawings, brand strategy plans, tech-stack plans, marketing plans, and financial playbooks.

Only after these steps are completed should the final business plan be written.

How Banks Can Improve Loan Success Rates

Banks have an opportunity to reduce their risks significantly—and increase the success rates of the businesses they fund—by requiring more than the completion of a business plan template during the loan approval process.

Instead, they should request detailed feasibility studies, along with the other playbooks, that go beyond the basics.

By working with entrepreneurs to ensure they have true clarity about their business model, market conditions, and financial outlook, banks can reduce default rates, and build stronger partnerships with their clients.

In addition, by encouraging the use of customized plans over templates or AI-generated plans, banks can ensure that they are investing in businesses with a clear path to success.

My Final Thoughts

Yes, a business plan is a vital tool for any entrepreneur, but it must be more than just a template, and lenders need to stop relying on these fill-in-the-blank approaches.

To build a successful business, you need more than a plan on paper; you need clarity, strategy, and a deep understanding of your market and financials. It’s time for banks, financing programs, and even angel investors to get it right and demand more than a standard business plan template. Only then will both the business and the lender see the long-term success they’re striving for.

Perhaps they, too, can then achieve success rates in the 90th percentile.

Image: Canva

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The John A. Roebling Suspension Bridge over the Ohio River, heading toward Over-the-Rhine in Cincinnati, Ohio

July 5, 2024by David Klemt David Klemt No Comments

Cheers to the Flyover Conference!

Cheers to the Flyover Conference and Cincy!

by David Klemt

Just pretend the temporary SkyStar Wheel isn’t in this picture.

The successful and exciting launch of the Flyover Conference makes it clear that co-founders Sarah Engstrand and Greg Newman are onto something big.

Big, yet intimate. There’s a real feeling of community when a small-but-driven group gathers with purpose. That’s exactly what Flyover embodies.

Now, I know some people who live between the east and west coasts in the US find the term “flyover” irritating, if not outright offensive. As someone born and raised in the Midwest, I understand the frustration. However, I can assure anyone raising a skeptical eyebrow or frowning at the name of the conference that it isn’t meant as a pejorative.

Rather, Engstrand and Newman are giving a cheeky middle finger (likely two, really) to those who dismiss “secondary” and “tertiary” markets. In fact, their intention is to shine a spotlight on—and serve—cities that don’t receive the same attention as “primary” markets.

By primary, I think you know main culprits: New York, Los Angeles, Chicago, Boston, and Miami. In contrast, Las Vegas, Phoenix, Cincinnati, and Detroit carry the “secondary” label (as do many other cities).

So, a core element of the conference is featuring speakers who have, up until now, mostly spoken at highly visible trade shows that take place in major host cities. For example, the National Restaurant Association in Chicago.

For the inaugural Flyover, the co-founders put in the work to provide Cincinnati with a powerhouse lineup of hospitality industry speakers. Additionally, this year’s F&B sponsors delivered an awesome array of sips and bites.

Killer Kickoff Keynote

Truly, Flyover’s mission is to deliver maximum impact over the course of just two days. The 2024 speaker lineup serves as a testament to their dedication.

So, too, is how the 2024 show utilized the two speaker stages, provided by Rhinegeist Brewery. Flyover attendees and speakers were close to one another, not separated by the vast expanse of a ballroom or elevation of a platform.

David Kaplan, CEO of Gin & Luck, the parent company of the world’s first cocktail bar chain (for lack of a better term, really) kicked off the event. Perhaps multi-location craft concept is a better phrase to explain Death & Co. in five words or less.

During his informative and inspiring keynote, he detailed he and his team’s approach to entrepreneurship. As Kaplan explains, when someone understands their purpose (why), they come to an understanding that helps develop their process (how). In turn, that gives an entrepreneur an understanding of the outcome they’re working toward, or their “what.”

I’ll dive much deeper into his keynote in a future article, because Kaplan’s approach goes much further than why, how, and what. In fact, in keeping with his status as one of the most transparent people in hospitality, Kaplan shares his personal core values, along with those of Death & Co.

Engaging Education

Bartender-cum-licensed psychotherapist (and soon-to-be organizational psychologist) Laura Louise Green took on a topic afflicting all of hospitality: burnout. The founder of Healthy Pour, Green explained that burnout is not only different than stress, it’s certainly not a sign of weakness to take the time to address it.

One of my favorites, Chef Brian Duffy, took a different approach to the topic of menus. Instead of reviewing a handful of submissions, Duffy took questions and addressed issues with food purveyors directly in a frank and open discussion.

Encouraging operators to take greater risks, Michael Tipps, co-founder of Maverick Theory, drove home a compelling point. Oftentimes, operators are fearless when developing their concepts. However, something curious often happens when it’s time to welcome the public into the space: second guessing, and blunting the sharpness of the original vision.

Oh, and I shared the KRG Hospitality approach to systems, starting, stabilizing, and scaling, my second time every presenting at a conference. Most people assume that because I host a podcast I’m comfortable talking to anyone, anywhere. That’s mostly true. However, I, like millions of other people, find public speaking anxiety-inducing. So, a huge thanks to the Flyover team, fellow speakers, and mostly the attendees for setting me at ease.

The above are but a handful of the education sessions that Flyover provided for attendees. Other topics ranged from the need for fully realized non-alcohol bar programs, building events in house, and operators handling their own PR campaigns, to leadership skills and leveraging the power of an effective door team.

Bang for Buck

Anyone who has attended one of the big hospitality industry conferences has probably been subjected to the experience below.

You file into a session featuring a topic of particular interest to you and your business. Even better, the speaker is someone you’re excited to see and hear. The presentation ends and…awkward silence. Almost everyone is too afraid to ask a question that they feel may make them look “stupid,” or like they’re not a good operator. Finally, someone asks a question, and that leads to a few more questions.

Unfortunately, the presentation was 45 to 50 minutes long, and with the awkward pause after its conclusion, there are barely ten minutes left for the speaker to answer questions. When they’re shooed off the stage, they’re swarmed in the hallway. You think they may be overwhelmed, you don’t want to add to that or inconvenience someone you admire, and you never get to meet them, ask them an important question, and exchange business cards.

That’s not an indictment of the large, more mainstream conferences. It’s just how it is when you pack dozens upon dozens of speakers, and thousands of attendees, into a conference hall. Further, schedules tend to be so loaded in order to attract attendees and boost ticket sales that people are forced to make difficult choices and miss out on some awesome sessions.

In contrast, Flyover intends to limit their ticket sales. And while there will always be a choice to make at a conference, they seek to mitigate that prevalent issue. Was this year’s show perfect? No, there were growing pains, as expected. Will this team learn and improve the show to maximize the impact for attendees? I have every confidence that the answer is a resounding “yes.”

Future Flyovers

I have to say, I’m deeply interested in the future of Flyover Conference. In fact, schedule permitting, I would attend even if I weren’t asked to speak at future shows.

It was an honor to be part of something of so impactful.

The entire point of this industry—hospitality—can sometimes fall to the wayside at conferences, trade shows, and expos. Another way of saying that is that while we all speak the same language, we often forget to take the time to connect with one another.

While there’s work to do, Flyover addresses this issue. The show is set up so that attendees, speakers, and sponsors are sharing the same spaces; there’s an actual sense of community. When it comes the host city, there’s a real sense of place, and that’s important.

Speaking of the host city…the next Flyover will take place in a city I mentioned at the top of this article. The most populous city in Michigan, Detroit—Motor City itself—will host the second Flyover Conference. Looking forward to it, Hockeytown.

Be sure to connect with Flyover for updates and announcements.

Cheers!

Image: Jake Blucker on Unsplash

AI-generated diorama-style image of woman behind bar using a tablet

May 10, 2024by David Klemt David Klemt No Comments

3 Operators Address Surviving a Downturn

3 Wise Operators Share Tips for Surviving a Downturn

by David Klemt

I have to say, AI-generated, diorama-style images look rad.

During a standout session from the 2024 Bar & Restaurant Expo, a panel of three successful and highly respected bar operators answered an important question.

This year, BRE brought together an operator supergroup: Erick Castro, Nectaly Mendoza, and Travis Tober. The trio drove home the importance of becoming a student of the industry; being curious about business; understanding the need to nail the fundamentals; and operators knowing their numbers.

Castro summed up the path to becoming a successful operator rather succinctly: “You need to follow the fundamentals to make money.”

Of course, making money is just part of the success equation. Banking that money so it can work for an operator is another. Again, Castro put it simply, urging operators to live within their means when their bar or restaurant starts making money.

Taking it further, Mendoza pointed out that trying to project an image of success is foolish. As he explained, some operators and bartenders are projecting an image of prosperity and expertise, but it’s nothing more than an illusion.

Tober, who understands this business like few others, drove home the need to understand that really, operators are in the entertainment and relationship business. He, his business partners, and his teams are committed to giving guests a reason to visit their concepts and spend their money.

Toward the end of this incredible session, an audience member, to the benefit of every attendee, asked the trio for advice everyone could take back home to improve their operations.

Tighten Up

When it comes to appealing topics of discussion, most people want to shy away from economic downturn. However, ignoring the possibility of a recession doesn’t prevent it from becoming reality.

In fact, Tober said operators need to prepare now for things “to get rough for the next two or three years.” So, he advised the roomful of operators to tighten up their P&Ls.

For future operators this means making it non-negotiable to understand every aspect of their business. Systems must be in place and standards developed before the first guest ever steps through the doors.

According to Tober, operators who are aggressive and savvy can set themselves up “for life” in the next five or six years. We all know what that means, and it’s one of the reasons an operator need to re-invest in their business.

Adding to Tober’s thoughts on the next few years, Mendoza advised the audience to be prepared to attack opportunities when they present themselves.

On the topic of becoming a sharp and successful operator, Mendoza said to “overkill” the books. “Put the same attention into your books as you do your bar team and menus.”

Put simply, operators who know their numbers and the importance of reinvesting funds have chosen the path toward success. This also relates to hopeful operators. They’ll have the opportunity, if they follow their instincts and wait for the right location to become available, for a strong start over the next few years.

Fortuitously, that fits with Castro’s advice: Make sure you’re actually starting a business, not creating a job for yourself. Also, ensure pour costs, food costs, and labor costs are dialed in because they’re the variables over which operators have the most control. Lastly, aim for low turnover.

Takeaway

If we at KRG Hospitality didn’t agree with Castro, Mendoza, or Tober, we wouldn’t share their advice or insight.

The naked truth is that bars and restaurants are going to close. It happens every day.

Mendoza addressed this reality directly. Looking around the room, he said, “Look, some of you motherfuckers ain’t gonna make it.”

While it got a laugh, it was also true. However, one can improve their odds of success by putting the right systems in place; being curious enough to want to know everything about their business and the industry; hiring people for passion, and committing to mentoring and treating them well; and hiring people who will, as Mendoza said, make stress and pain points irrelevant.

It has been said plenty of times that we can hire for passion in this industry, and train for skills. What I hadn’t really heard until Mendoza said it is that we should also hire people who won’t cause an operator’s headaches. About midway through their session, Mendoza advised the room to ask themselves if the person they’re interviewing is going to be a problem or a good fit.

Another truth is that one operator’s failure represents another operator’s future success. However, that’s not possible without a high-level understanding of one’s business specifically and the hospitality business in general.

Image: Shutterstock. Disclaimer: This image was generated by an Artificial Intelligence (AI) system.

AI-generated image of a record album cover that reads "Cocktail House"

April 9, 2024by David Klemt David Klemt No Comments

Triple Threat: A Bar Owner Master Class

Triple Threat: A Bar Owner Master Class

by David Klemt

Three of the most respected bartender-operators formed like Voltron in Las Vegas during the 2024 Bar & Restaurant Expo to impart invaluable wisdom.

In an attempt to prevent the trio from roasting one another, I’ll organize them alphabetically, by surname: Erick Castro, Nectaly Mendoza, and Travis Tober. And yes, I’m aware they’re still going to roast each other.

This triumvirate came together to co-present “Bartender Masterclass: Building Bars that Change the Game Yet Make Money.” An aptly named education session as it was certainly a masterclass.

Importantly, this wasn’t a how-to class on tracking costs. The trio didn’t pop P&Ls up on a screen and explain how to read them. Rather, they delivered the naked truth about becoming a bar owner and chasing success.

Bluntly, the reality is that Castro, Mendoza, and Tober are noticing disturbing trends in bar ownership. People going against their instincts. Hopeful owners accepting terrible deals in a bid to live their dreams. Setting the stage for failure with excuses. No talent as the new talent. A lack of understanding of the fundamentals.

Speaking of fundamentals…

With the jokes out of the way—these three won’t hesitate to spit a bit of good-natured venom at one another—this panel got right to delivering the truth.

Almost immediately, Castro addressed a grim reality. A lot of the panel’s friends and peers own and operate bars that are busy and winning awards. And they’re not not making any money.

When he asks to see their costs, he often hears that the owner doesn’t know that information. That doesn’t work for anyone among this trio.

“You need to follow the fundamentals to make money,” explained Castro.

Adding to that, Mendoza explained the situation succinctly. A lot of the flashy markers of success some bartenders and bar owners flaunt on social media and in their real lives are bullshit.

I can tell you with certainty that Castro, Mendoza, and Tober know their numbers. It’s obvious they have the fundamentals down, and they don’t take them for granted. The same can be said for the teams they build. Nobody’s career is long for any of their businesses if they don’t learn to respect and embrace the fundamentals.

At KRG Hospitality, we also drive home that the fundamentals are keys to success. There’s a reason KRG president Doug Radkey’s first book is subtitled Developing the Fundamentals for an Epic Bar.

There’s no room for excuses.

There’s more than enough on any owner or operator’s plate; there’s no room on it for excuses.

Yet, these three are noticing that many new bar owners seem to be piling their plates high with justifications for impending failure.

“For some reason, no talent is the new talent,” said Mendoza.

Justifications for refusing to learn the business like, “I don’t know accounting,” or, “I don’t know restaurants,” are excuses that lead to two things: more excuses, and the closing of bars.

If you’ve never had the opportunity to hear Mendoza speak, I’ll tell you this: He doesn’t sugarcoat anything. He’s a fun person, he’ll make you laugh, and he wants to see people succeed. Mendoza loves hospitality. However, when it comes to business, the jokes stop.

Let’s not forget that owning and operating a bar is a business. Bars need to make money to stay open. Bar ownership isn’t a reality show, sitcom or movie—it’s stressful. Operating at a high level doesn’t remove stress completely, but it certainly mitigates much of it.

Crucially, embracing the fundamentals and rejecting the impulse to excuse mistakes large and small allows a bar owner to step away from their business eventually. Imagine being able to take actual week-long vacations—plural—as the owner of a bar, without worry. That should be among every bar owner’s goals.

So, when Mendoza says bar owners need to have the guts to learn everything about the business, that’s not hyperbole. And when Castro, who now co-owns the recently opened Gilly’s House of Cocktails, states that someone needs to be genuinely curious about the business to succeed, you can take that to the bank.

Bet on yourself.

“I bet on myself,” said Tober during this panel. He meant that in both the past and present tense, by the way.

When Tober opened the first Nickel City in 2017, it cost nearly a half-million dollars. The goal was to make $800,000 with the bar in its first year. To say that Nickel City surpassed projections is a bit of an understatement.

It did $2.4 million. The bar now generates $3 million per year on average. The latest Nickel City outpost in Houston cost $1.3 million. On average, Tober and his tight-knit group pay back investors in 18 months.

On episode 50 of our Bar Hacks podcast, Tober “jokes” that he wants a Nickel City in every major city throughout the US. If you want to listen this conversation, here’s the Spotify link, and here’s the Apple Podcasts link.

Given how quickly he and his team lead bars to success, I won’t be surprised if a fourth Nickel City location opens by the start or middle of 2026. Further, I won’t be shocked at all if it’s the first Nickel City outside of Texas.

Again, his success is the direct byproduct of his belief in himself, and an understanding of bar operations that few can match.

It’s not the drinks.

Successful bar operators, embodied by the three who hosted this panel, know that they’re not in the business of selling drinks.

“We’re all in a relationship business,” said Tober. “It’s not about the cocktails.”

This is coming from an operator whose team puts more than 20,000 Frozen Irish Coffees across their bars each year. They’re the second-highest seller of Tullamore DEW.

And you know what else? Tober will give you that recipe. In fact, he’ll tell you that all you have to do is visit the Erin Rose in New Orleans and modify their recipe.

Tober will give you that recipe—all of his recipes, if I had to guess—because you could open a bar across from one of his and having his drinks won’t make your venue a threat.

That’s betting on yourself.

Someone may be a better bartender than Tober, if one were able to put stats on the role. But Tober won’t be bothered, confident in the knowledge that they won’t tend bars better.

Setting ego aside, Tober told the room at Bar & Restaurant Expo that about once every three months, he reminds his team that he’s a C student and a college dropout. People could easily write him off as just some loud bar guy.

However, he knows the bar business in general and his bars in particular at the highest level. And he knows that he’s the guy people would like to sit down with to have a beer and a shot. As he told that room in Las Vegas, he gets by on his personality. That personality bleeds into the heart and soul of his concepts and informs the level of service and hospitality that makes everyone feel welcome.

As important, Tober also feels that bar owners are in the entertainment business. He ensures that he and his team give guests a reason to want to visit and hand over their money.

Trust your instincts.

Let’s trek back all the way to the point about some of the world’s most-awarded bars not making any money.

In some instances, it’s more accurate to say that the well-known bartender-operator isn’t getting paid. Yet another way to frame such a situation is to refer to the bartender-operator as the face of the bar.

I say they’re the face because their ownership stake is likely under 25 percent. In fact, it’s probably 20 percent or lower. The controlling stake is owned by one or more investors.

So, the bartender-operator’s vision has turned to brick-and-mortar. Their hard work turning their dream to reality is resulting in traffic, media coverage, and awards. But they’re also taking on all the stress of everyday operation while most likely struggling to pay their own bills.

They haven’t attained their dream—they’ve gotten a job. Worse, it’s an incredibly stressful job, and they’re not being compensated properly.

Driving home this point was an interaction between an audience member and Mendoza.

Would you take this deal?

This future bar owner (assumedly, and hopefully) was asking about seeking funding through investors. It was revealed that the project would likely cost around $600,000.

So, illustrating how easily a person may be tempted to leap into a bad deal to have what they think is their dream, Mendoza said he could fund that project (hypothetically). However, he would want 87-percent ownership in exchange (again, this was hypothetical). Mendoza went on to guess that the audience member and his partners would take that deal—and that they absolutely shouldn’t, because it’s a terrible offer.

Rationally, most of us would know that’s a bad deal and that we should walk away. That includes the audience member who interacted with Mendoza.

But we can all be susceptible to the “lizard brain” inside us. This is the portion of our brain that causes us to act on emotions rather than logic. There’s your dream! Your heart is pumping so hard you can hear it thumping in your ears. All you have to do is sign and it’s “yours,” at the cost of 80 percent or more of its ownership.

If a deal seems off, trust your instincts, walk away, and seek the right partners.

When you do land the right deal…

“…take the fucking shot,” says Mendoza.

In this instance, “the right deal” means a bar within your budget, cautioned Castro. Buy what you can afford.

Mendoza owns and operates award-winning concepts Herbs & Rye and Cleaver — Butchered Meats, Seafood & Classic Cocktails in Las Vegas. He shared that Cleaver is the concept he envisioned first. At the time, however, he had the budget to build Herbs & Rye.

So, he built Herbs & Rye in 2009. He trusted his instincts and, like Tober and Castro, bet on himself. In 2018, he opened the doors to Cleaver.

Could he have blown his budget and built Cleaver first? Sure. And we probably wouldn’t have either bar and restaurant now had he not been pragmatic. The industry more than likely wouldn’t have Mendoza to share his wisdom and mentor future operators.

“Your first bar is your best work. It’s like your first album—raw and uncut,” Mendoza says.

When it’s time for a second location, create something different. Get a bit uncomfortable.

“I think there’s a big disconnect about what being a bar owner is,” says Mendoza. “Success will create the fastest path the farthest away from what brought you success in the first place.”

How many sophomore albums from artists receive critiques that they’re good, just not as good as the freshman release?

When you’ve got the fundamentals down, when you understand your business at a high level, you keep that experience and wisdom. Getting uncomfortable and taking on a new challenge isn’t as risky as it was with your first bar.

So, take the fucking shot.

Seriously, trust your instincts.

There’s an episode of Castro’s award-winning Bartender at Large podcast that every bartender and hopeful bar owner should give a listen.

On episode 320, released in October of 2022, Castro gave Moe Aljaff the opportunity to tell the story of Two Schmucks. Mere days after earning the number seven spot on the 2022 World’s 50 Best Bars list, Moe and most of the team left the bar.

The situation that affected the Two Schmucks team is more common than some would like to admit, unfortunately. It inspired the cautionary phrase, “Don’t get Schmucked.”

To listen to Aljaff’s story, follow this link to the podcast episode on Spotify. After you’ve listened to that eye-opening episode, consider giving number 236 of Bartender at Large a play. It’s a conversation between Castro and Daniel Eun, a bartender and practicing attorney. This link will take you to the podcast’s website, where this episode has been embedded.

Image: Shutterstock. Disclaimer: This image was generated by an Artificial Intelligence (AI) system.

2024 KRG Hospitality Start-up Costs Guide

December 21, 2023by David Klemt David Klemt No Comments

KRG Releases 2024 Start-Up Guide

KRG Hospitality Releases 2024 Restaurant Start-Up Cost Guide

by David Klemt

KRG HOSPITALITY RELEASES SIXTH ANNUAL RESTAURANT START-UP COST GUIDE

Toronto-based hospitality industry consulting firm with offices in key markets throughout Canada and the United States of America unveils their latest restaurant cost guide and interactive hospitality calculator.

December 21, 2024 (TORONTO)—Today, KRG Hospitality releases their 2024 Bar & Restaurant Start-up Costs Guide, which is free to download. The Toronto-based consulting firm specializes in startup restaurant and bar projects along with boutique hotels, experiential concepts, and entertainment venues. KRG Hospitality’s American headquarters is located in Las Vegas, Nevada.

For the past six years KRG has researched, reviewed, and published the annual start-up cost guide, one of the industry’s leading resources dedicated to restaurant project costing.

And each year this informative and transparent guide is used as a trusted budgeting tool by developers, lenders, contractors, consultants, and aspiring restaurateurs. The guide is founded upon KRG Hospitality’s proprietary database of previous project costs, which includes project data from restaurants, bars, and cafes developed over the past 24 months.

Further, this annual KRG Hospitality guide also includes the interactive KRG Hospitality Calculator, which is updated for 2024.

The costs to start a restaurant have been on a steady rise over the past six years. Major drivers are increases in inflation, interest, labor, construction, and equipment. Of course, there are also the unique materials required to deliver a scalable, sustainable, memorable, profitable, and consistent on-premise, off-premise, or hybrid-style concept.

Drawing upon this comprehensive guide, an industry-leading expert has analyzed the information and provided a succinct and user-friendly summary of the findings for each major start-up category. This isn’t simply a couple of pages identifying a few costs. Rather, the sixth annual guide is a deep dive that provides real insight into what to expect in 2024.

The guide is available now as a free download via this link.

About KRG Hospitality

KRG Hospitality is a storied and respected agency with proven success over the past decade, delivering exceptional and award-winning concepts throughout a variety of markets found within Canada, the United States, and abroad since 2009. Specializing in startups, KRG is known for originality and innovation, rejecting cookie-cutter approaches to client projects. The agency provides clients with a clear framework tailored to their specific projects, helping to realize their vision for a scalable, sustainable, profitable, memorable, and consistent business. Learn more at KRGHospitality.com. Connect with KRG Hospitality and the Bar Hacks podcast on social: KRG Twitter, Bar Hacks Twitter, KRG Media Twitter, KRG LinkedIn.

Disclaimer

While using this guide helps develop a rough preliminary financial and strategic milestone plan, it is strongly recommended that you seek professional expert advice to provide you with a more precise, project specific estimate as each concept and market will be slightly different. KRG Hospitality Inc. is not responsible for any project that is not currently under contract within the company.

Image: KRG Hospitality