Sink, swim or get out of the pool was a thought provoking seminar about failure and how to get the better over it.
Four bar owners, including Julie Reiner, founder of the Clover Club, and Josh Fontaine, founder of Quixotic Projects in Paris (La Candelaria, Le Mary Celeste, Glass, Hero) shared their experience in failing businesses and the lessons they learnt along the way. The different interventions were refreshing in their honesty and extremely insightful.
Josh Fontaine, founder of Quixotic Projects : Glass
Following the huge success of La Candelaria (the founders stopped working behind the bar 6 months after opening and reimbursed their investors within 11 months of operations), Josh and his associates decided to launch their second project a year later in 2012 : Glass.
Contrary to its big sister, Glass wasn’t working after only a few months. It wasn’t meeting the owners and the customers of La Candelaria’s expectations.
There were three sources of problem:
1. A location discord: Glass opened in Pigalle, Paris’ “seedy” neighborhood mostly famous for Le Moulin Rouge. By trying to open an elevated dive bar in a dive bar neighborhood, “we successfully managed to eliminate La Candelaria’s guests, while locals didn’t understand the concept either. We stood up for our high prizes and it was difficult to make people pay for higher quality.”
2. Inflexibility with the original concept: “We wanted to be a dive bar with an artsy edge, a strong beer program, affordable cocktails, industry nights discounts on Sundays, a lit up dance floor and music playing past 2 am. Because of the heavy sound system required for this concept, none of the original decor could stay. It might have been better to drop the late opening time idea and keep the old decor.” Lesson learned from that: “Be humble and recognize your original idea is not the best.”
3. Diverging visions with the designers: Josh and his partners kept the same idea and the same designers who had worked on La Candelaria. Unfortunately, it didn’t prove successful with Glass. “The designers stucked to what they wanted to do and not what we wanted. The result was uncomfortable angular furniture and a cold decor reminiscing of a sushi bar. We put too much confidence in the designers and didn’t speak up.”
In summer 2014, the team had a freak out: “We needed to make Glass the bar we’d always wanted. “A 9 month period of trial and error started. Fed up with serving downing numbers of guests, the staff helped out with mitigated success: “We ended up with some terrible graffiti artwork on the walls but white walls didn’t work either.”
In the end, after opening their third venue, Mary Celeste, what Josh and his partners discovered is that “sometimes the guests will decide what your venue will be. When we opened Mary Celeste, we thought we’d opened a bar with great food. We opened a restaurant with great drinks.”
What next? “As long as we can keep the lights on, we’ll keep the party going at Glass. However we probably couldn’t do it if the other venues didn’t help to pay the debts.”
Mat Snapp, Beverage Director of the 44 restaurants of Fox Restaurant Concepts : Little Cleo’s Seafood Legend
At the beginning of Mat’s intervention, we were served one of his cocktails made with some homemade tea syrups. This gave Mat the opportunity to start with a first few tips regarding success: “It is very important when you’re beginning to up your game depending on the guests.” He gave the example of the tea syrup used in the drink we were sipping. “We have good relations with our coffee and tea supplier and thus have good price. I now make some homemade tea syrup that adds value to the cocktails with no reflection on their price.”
Mat then proceeded to tell us about his difficult experience with Little Cleo’s Seafood Legend, and gave us his notes regarding “Big vs Small” businesses.
1. While social media works fine, it doesn’t work as well as partnerships with guest chefs. “When we sell experiences, the events are sold out!”.
2. Bigger is only a little bit easier as business can hide inefficiency and mistakes with activity.
3. Embrace the “duhs”: teach everything you know to everyone you know as fast as you can. Don’t take a pass on letting someone make something incorrectly.
4. Know exactly what you’re buying and selling.
5. Keep your guts to yourself and keep your money in the office.
6. Embrace social media but embrace execution, hospitality and charm more: if a picture is worth a thousand words, an unbelievable experience is worth a million.
7. Turn your trash into cash: use everything, don’t let anything go to waste. You have lemons? Use the juice for drinks and the peel to make oleo saccharum.
8. Make sure the beer is cold. (One of the “duhs”). If you don’t master the basics, people won’t trust you for the rest.
9. Prepare as if it were the last shift: make sure you have enough of everything so that you won’t run out of anything. If you know you’ll run out of lemon juice at some point, prepare more!
Julie Reiner, Co-Owner of Clover Club, Leyenda, and Mixtress Consulting : Lani Kai
After successfully opening the New York bar institutions that are the Flatiron Lounge, Pegu Club and Clover Club, Julie Reiner made an unfortunate experience with her Hawaiian themed bar Lani Kai and shut it after only two years.
“What went wrong went down to partnership issues.”, Julie explained. There were two other partners involved in Lani Kai with her but one of them didn’t see eye to eye with her and their other associate.
There were also issues with the concept: “We went more in the modern tropical direction than the kitsch tiki one to differentiate ourselves from the two other Hawaiian themed bars opening at the same time as Lani Kai. I started talking more about what we weren’t than about what we were. It was confusing and spread negativity. The New Yorkers didn’t get our concept: ‘How is tropical not tiki’?” Then, six weeks in, the opposite partner wanted to launch lunch and brunch formulas. “It was way too soon. It crashed and burn very fast.”
The location, in terms of space, also proved problematic. The venue spread out on two floors, 2500 square feet, in Soho sure, but the rent was extremely expensive: $18’000/month. Then, there were structural issues that cost $ 65’000 in repairs in year 1. “That crippled us because we didn’t have the reserve but we had no choice: we had to fix it.” The flower budget was also pretty costly.
Finally, “the build out was a compromise. The bar wasn’t anything anyone of us wanted. It was a real battle for me: I hated the place.”
The two lessons to retain from Julie’s experience would be:
1. When a marriage is strained, don’t have a baby to make it better; i.e. get into business with partners you have a good relationship with and share a vision with.
2. In terms of financials, be realistic with them. Sell investors figures you’re going to be able to hold.
Henrik Steen Petersen, Owner of Moltke’s Bar and Simply Cocktail : Moltke’s Bar
When they opened Moltke’s Bar in Copenhagen in 2009, Henrik and his partners decided to make it a bar all about classic cocktails, which was still a new concept at the time in Denmark. Four years later, the inevitable expiration date arrived and Henrik and his associates decided it was time to close. Henrik’s testimony was about how getting out of the pool is not necessarily a failure. An inspiring story on how to identify it’s time to say goodbye but end on a high note for everyone anyway.
You know you should start considering closing your bar for good when:
1. The turnover is declining.
2. The regulars don’t come back.
3. Tipping is poor.
4. There are changes in the guest behaviour.
5. There are some changes around the location, in terms of foot traffic for example. If people can’t drive to you anymore, they might stop coming altogether.
6. There is a new “black in town”, a new bar that attracts your guests. To be prepared for this contingency, ask yourself: “Are we still on top of things in town?”
7. There are problems with the staff.
The problem with Moltke’s was none of the above actually. Theirs was that “we had a very specific niche – we only served classic cocktails – and we were open only 2 nights a week and it was hard to find staff willing to work that little”, Henrik explained.
To avoid having a failing business, Henrik’s tips were:
1. Be careful: love makes you blind. So, consult a third party for help; involve your financial partner not only for money but for general advice on your venue; and involve your staff. In other words: never walk alone.
2. Be honest: if you’re honest, your staff will walk with you.
3. Initiate a rescue plan/prepare for the eventuality of a crash. Prepare a three tier budget with a no action forecast (what will happen if nothing changes), a rescue operation budget and a closing budget. Prepare for a crash so you will know what to do when you reach a certain point.
If, in spite of all this, your business still fails and there is no choice for you but to close down, you can still end your adventure on a high note and give everyone, guests, staff, yourself, a happy ending! Not talking about special massages here! No! Simply about turning a sad event into a joyous one and for that:
1. Plan your closing.
2. Involve your staff and your regulars.
On Moltke’s Bar’s last week of operations, there were special events every evening and, as a treat for the regulars, the very last night was regulars night only. Henrik and his partners decided to make it really special and invited a bartender from New York for one last guest bartending gig. “We (Moltke’s Bar’s team) held the bar until midnight, symbolically the end of the day, and he held the bar until closing time. Having someone from New York, where most classic cocktails were invented, serving the last drinks was our way to show where our concept and inspiration came from.”
While looking online for a quote to end this article, I found two that seemed rather appropriate. The first one is from Winston Churchill: “Success is not final, failure is not fatal: it is the courage to continue that counts.” and the second is from Henry Ford: “Failure is simply the opportunity to begin again, this time more intelligently.” Whether it’s Henrik, Julie, Mat or Josh, they’ve all persisted in one way or another. While Josh is the only one to have kept his failing business open, they have all learned from their respective experiences and apply the lessons to their new, successful, projects.