Bars and nightclubs have a great reputation: They’re places to relax, have fun and spend time with friends and family. But the reality is not so pretty. Many bars fail within their first three years—a lot of them in their first year.
Nightclub & Bar takes a look at the top six reasons—beyond being financially ill prepared—that cause establishments to fail:
1. Violence
The media is full of reports of shootings these days and there’s no doubt this could happen in a bar or nightclub but there are lesser forms of violence that can also wreak havoc on a reputation.
Angry and belligerent customers are sadly not unknown in bars—and they’re often spurred by alcohol—but how should you handle them?
Most importantly, be calm, says Anneliese Place, a bar and hospitality consultant in Santa Barbara, Calif. “Be level-headed and really listen to what the [angry] person is saying,” she says. “If the person is telling you something about themselves, tell them you can understand how they feel and ask what you can do to correct the situation.” This is better than just offering a default gesture to try and rectify things, she explains.
Placating an angry customer can be expensive but that expense is miniscule in comparison to what it would cost for that customer (and anyone he or she is with) to leave unhappy. “It’s a very easy situation to turn around,” Place says.
Preferably a manager will deal with angry customers so fetch him or her as soon as you can. And try to draw the angry client away from other customers.
“The cost of not handling situations like these could cost you hundreds of thousands of dollars,” Place says, because it could ruin your reputation, especially if this goes viral or hits the media.
2. Bad Reviews
Bad reviews, in these days in which everyone is a reviewer thanks to sites like Yelp! and Facebook, will happen. But how a bar responds to them can have a huge effect on their success.
Zee Brown, owner of Top Shelf Sports Bar and Grill, Plant City, Fla. uses bad reviews as a learning opportunity.
She responds directly to dissatisfied customers “to try to leave the door open for communication, to let them know their service experience is very important to us, and to appeal to their needs as best we can,” she says.
She also discusses all bad reviews with her staff. “We relentlessly look at them so we can avoid repeat offenses. This helps the staff remain accountable for their behavior because customers will not hesitate to blast the server who was responsible for the failed customer experience,” she says.
“We don't rest on our laurels; we address the review, act appropriately, learn from it and move forward. We seek pleasure from having good reviews, which is our ultimate goal.”
3. Poor Customer Service
News about negative service travels way faster than news of great service. So, says Traci Allen, CEO of Traci Allen, Inc., a brand development firm in Washington, D.C., bars should ensure they hire carefully, because that’s the single biggest indicator of the service your establishment will provide.
Look for outgoing, friendly, engaging, accommodating employees who want to provide service, she says. “You need to hire people with the right spirit and attitude who will excel.”
A test Allen advises is for the hiring interviewer to be stoic to see if the candidate can continue to be friendly and upbeat since he or she will meet people like that in your bar or nightclub.
In your training, ensure your employees are knowledgeable. If customers have questions about a menu item, or the history of your bar, the employee should be able to answer it.
Once hired train employees to be sensitive to customers’ needs. They should anticipate what they want, such as more water or a question about the food, which will make the client feel taken care of.
A few other things to consider:
- Remember the customer is always right—no matter what an employee or manager thinks.
- Give each customer your undivided attention and really listen to what he or she wants.
- Gauge each table; do they want you involved in their meal or should you be on the sidelines?
- Greet regular customers by name and try to remember their favorite drinks or food.
4. Ineffective Management
Managers have a lot on their proverbial plates. They need to have good interpersonal and leadership skills; they need to be great communicators; they have to be able to focus and be flexible since they typically have a lot going on at the same time.
So when you’re hiring for managerial positions, ask questions that require specific examples, such as “Give me an example of when you had several projects going on at one time.” Also give them hypothetical scenarios and ask how they’d handle them.
Listen to how candidates answer questions—in a positive or a negative response. It will show how they tend to deal with things: A negative personality might rub other employees or customers the wrong way.
If you’re hiring from within look at the relationships that person has with the rest of the team. “Are they too buddy-buddy with someone or have they been in a relationship with people on the team?” Allen asks. If they’re too friendly with others they won’t be able to lead them.
5. Intoxicated Customers
You can’t have control over your customers when they leave your bar or club but you do have to do everything you can to not allow a drunk customer to get behind the wheel of a car.
Be sure to have plenty of taxi and car service phone numbers “and even offer to pay for the cab,” warns Place, “because it’s way cheaper than a DUI.”
Treat designated drivers with full respect. Provide them with free drinks and free entry the next time they come (if you’re a club with an entry fee).
When there’s a DUI, Place explains, the police retrace to the last place the driver had a drink. “Your bartenders have to be trained to be alert and to watch when customers leave and who they’re riding with. Bartending is not just making drinks; you’re also policing your bar.”
As for cutting off customers who’ve drank too much, distraction may be the best idea, she says. By that point it’s too late for food to make any kind of difference, but it can distract them from drinking more.
6. Poor Wireless Service
Last month, Shaun Clancy, owner of Foley’s NY Pub & Restaurant in Manhattan, N.Y., lost wireless service for three days, and a few months before that he lost it for five.
“Most people want to pay by credit card these days,” Clancy says. “Not being able to process the cards upsets customers and costs a restaurant like mine literally thousands of dollars.”
During those days, he also saw many customers walk into his bar and back out when they realized they couldn’t access the internet.
“Tourists may or may not ever be back. However, local customers might get into the habit of going elsewhere, which would be disastrous,” he says.
The only solution Clancy’s found is dividing his wireless services between two companies, which of course leads to double the costs. But those costs, he says, are nothing compared to what he loses when service goes down.
The hardest thing, he says, is “you have no comeback because of this. It’s the only option that’s only feasible. [Time Warner] is basically saying this could happen again.”
During those days, Clancy couldn’t receive phone calls for reservations or general information; he couldn’t process credit cards (85% to 90% of his customers pay with credit card); and customers were unable to use his wireless system.
“You don’t realize what a lifeline your phones are—for reservations and inquiries. I field a gazillion calls a day; most of them you don’t want to take but you can’t run a business without them,” Clancy says.