On Starting A Cocktail Lounge in Asia

[illdrinktothat]

Hello everyone,

First of-- this is my first post on eGullet.

I'm a cocktail enthusiast and have often wondered if starting my own bar in the Philippines would be a good idea.

Hoping to get a discussion going on what I should be thinking about.

A few points to give you some context:

1. I'm currently located in Los Angeles but will likely move to Manila in a year or two.

2. Over the past year or two, I've spent significant time in most if not all the best cocktail bars here in Los Angeles and have slowly built up my cocktails/spirits knowledge. It's far from where I need to be to open my own place, but I'm working on it.

3. I've been making drinks at home for the past year or so but nothing too fancy (mainly classic cocktails w a few twists).

4. As long as I keep costs relatively low, finances to open this bar should not be a problem.

5. Reason for opening cocktail bar is two-fold: 1. introduce locals in Manila to cocktails (there isn't a single place serving craft cocktails at the moment) and 2. try and make a little money off something I love.

6. If I were to imagine the type of place I'd like to open, it'd be a place serving good cocktails (not incredible but good enough) and good bar food (thinking small bites like roasted bone marrow, sliders) at reasonable prices.

7. Currently cocktails at high-end restaurants in Manila go for $4 each. Likely will match that price w better quality.

8. For the most part, Manila doesn't have a big cocktail scene, so the discernment for the most part likely isn't there. Thus, I think initial goals should be breaking a reasonable quality threshold and focus my energy on execution, efficiency, and customer experience.

9. Drinks for the most part, will start on the simple side (gold rush, manhattan, aviation, gordon's cup.. things like that)

So with that out of the way, what issues should I be thinking of? Initial thoughts that come to mind:

1. What is the most effective way of increasing my knowledge of cocktails/spirits? Any recommended classes / seminars? Already have a good amount of books.

2. Ideas on how to find / train good bartenders, barbacks, etc?

3. What are the biggest challenges that face such an endeavor?

I'm sure there are a MILLION things I'm not thinking of, but hey-- isn't what this thread is for?

Thank you for all of your help!

[Chris Hennes]

Do you have any experience working in the foodservice industry, and/or managing employees? Second, how familiar with the legal requirements for doing so in Manila? I'd suggest that the business end is where most failed restaurateurs go wrong.

[Lisa Shock]

I suggest that you get a job as a bartender/barback just to get a real feel for all of the tiny daily details involved in actually working in a bar. This sort of experience is priceless and will help prepare you for procedural, staff, and equipment issues later on.

Having been a wine-bar & liquor store manager, I can tell you that inventory control procedures are critical to profitability. One bartender comping lots of buddies, or a staff constantly downing shots, can sink you.

Working in a place will also give you a feel for being on the other side of the counter. Just because you enjoy drinking and dining in bars doesn't necessarily mean you'll enjoy working in one. You'll face long hours: training staff, doing paperwork, maintaining equipment, dealing with government agencies, negotiating with suppliers, and a lot more unglamorous stuff.

[prasantrin]

2. Over the past year or two, I've spent significant time in most if not all the best cocktail bars here in Los Angeles and have slowly built up my cocktails/spirits knowledge. It's far from where I need to be to open my own place, but I'm working on it.

You need to get out more. Most of the "best cocktail bars" in the US are not in LA, so you'd be wise to visit other cities (Chicago, New York) to check out their cocktail bars.

4. As long as I keep costs relatively low, finances to open this bar should not be a problem.

Have you investigated purchasing alcohol in (or importing alcohol to) the Philippines? Premium alcohol is far from cheap there, and if you're going to open a "serious" cocktail bar, you likely won't want to rely on just the cheap stuff.

Not only that, but you have to remember the costs of doing business in the Philippines are not cheap. In addition to standard start-up costs, you're going to need a lot of extra money to grease the palms of those whose help you will need (minor bureaucrats, major bureaucrats, real estate agents, etc.). And rents in Manila are not cheap, at least not in the areas you'll want to be in (like in or around Greenbelt, Glorietta--pretty much anywhere in Makati).

If you're serious about opening in Manila, I would recommend starting with a sort of "secret" club, only open to those with memberships or reservations. If you can operate out of your home, even better since that would reduce overhead costs.

Offer classes if you can (but you'll need a heck of a lot more practice and skill to appear legitimate, but then again, will they know the difference?), or offer a cocktail catering service. Lots of well-heeled folks (especially the newly well heeled) would probably love to have such a service at one of their parties. On that note, however, you would need contacts. I don't know much about your heels, but it's hard to break into that segment of the population unless you know people in that group or are one of those people.

[illdrinktothat]

Thank you for your replies.

Chris: no experience working in the food service industry; my background is in finance, so hopefully that will cover the business end of things.

Lisa: agreed on your thoughts on bartending/barbacking-- im considering moonlighting as a barback on the weekends at a nearby cocktail lounge. also, can you elaborate further on inventory control procedures? i realize its importance but is there a tried and true method to inventory control?

Forgot to mention this but I can't foresee myself running a cocktail lounge long term. I just can't see a cocktail lounge paying the bills as well as finance does but it is something I do love and am willing to sink considerable finances, time, and effort into. Ideally what I'd like to happen is to open a bar, run day to day operations in the short term.. but in the long term, find and train good staff, find a good bar manager, and get it to the point where it can operate without my intervention.

prasantrin: I never said the best cocktail bars in America; just "the best cocktail bars here in Los Angeles". I've been to many cocktail bars in Chicago and NYC, including what some consider to be the best around (Death&Co, Milk&Honey, PDT, Little Branch, etc).

I'm currently in talks with some folks about how importing alcohol works in Manila-- will let u know what I find out.

One thing to keep in mind though-- like I mentioned in my first post, I'm not looking to start the most serious cocktail bar around. Certainly nothing close to the bars previously listed. Manila doesn't have the knowledge, demand, etc for that sorta thing I think... I'm just looking to start a lounge with good drinks, mostly classic cocktails at a reasonable price point. At least in the beginning, I won't be looking to introduce expensive small-batch whiskeys, tequilas, or gins. Simple stuff like showing the differences between say rye whiskey and bourbon, using fresh juices, good ice, etc will be a good start already I think. Certainly no high-brow cocktail geekery here.

And excellent point on starting w a sort of "secret club". I envision this bar to be rather small. Something like 500-600 sqft of seating area. Limiting access (especially at the beginning before barstaff gets their rhythm going) will be important.

[prasantrin]

prasantrin: I never said the best cocktail bars in America; just "the best cocktail bars here in Los Angeles". I've been to many cocktail bars in Chicago and NYC, including what some consider to be the best around (Death&Co, Milk&Honey, PDT, Little Branch, etc).

I never said you had. I was simply stating that you need to experience much more than just "the best cocktail bars in LA". You hadn't mentioned visiting any others, so I was simply advising you to increase your frame of reference.

Further on that, if you can visit Tokyo on your way to the Philippines, there are some interesting cocktail bars there, many of which focus on simple cocktails made with precision. It might be worth a visit just to see what others are doing in Asia.

In terms of exposure, you might want to consider developing a line of non-alcoholic "cocktails". Then you can try these out at one of the weekend markets (Salcedo, Legaspi, Mercato Centrale) and use that exposure to market your other cocktail venture. The types of people who visit those markets are also the types who might be attracted to a cocktail bar.

[Lisa Shock]

Lisa: agreed on your thoughts on bartending/barbacking-- im considering moonlighting as a barback on the weekends at a nearby cocktail lounge. also, can you elaborate further on inventory control procedures? i realize its importance but is there a tried and true method to inventory control?

Look carefully at your computer/POS setup. You'll need more than an old-school cash register. You'll want a system that will track inventory as it's received then tally up what was consumed each day. You then do a physical check of bottles to see that the levels are in line with the days' sales.

Out front, we did a small inventory of open bottles each day, checked a few specific things daily, and then randomly spot-checked 5-10 others so that employees had no idea what we'd look at on a given day. We'd also randomly sample a teaspoon from various bottles to make certain they weren't being watered down. Manager plus one employee signed off on it.

In back, we did a quick inventory count each week of the top ten items plus some random things. Once again, random to keep everyone guessing. We also confirmed total inventory on an item when receiving shipments.

Yes, you'll lose some inventory to spillage, legit comps, and the 'angels' share,' but, you can factor this into your pricing structure.

On the plus side, you may, depending on the local laws, and generosity of distributors, get a fair amount of free inventory. Ask about deals like 'buy ten cases get one free,' free tasting bottles, and other promotions.

[Kent Wang]

There are now good cocktail bars in China. Apothecary in Shanghai and Beijing, and one or two others in Shanghai. These are more in the US style, as opposed to the Japanese.

One of the biggest problems is that a lot of products are not imported here. A single bar is not going to be able to import anything. You will need to work with what's available, so you'll be able to make Manhattans (with bourbon, not rye) and martinis, and other classics but you won't be able to venture beyond that. Of course, that would still make a pretty decent bar.

I would also work with a Filipino local to open the bar that can navigate the bureaucracy and handle contractors and employees.

[Chris Amirault]

Well, as an enthusiast who's just spent a good chunk of the last 18 months thinking about these issues as I helped to start the bar at a local restaurant, I'll share my thoughts, which can be summed by saying, "It's extremely difficult to pull this off." So, in addition to the good advice here -- and I think that all of it is good advice thus far, especially Lisa's -- I'd add the following:

• Develop your business plan around the specific customers you wish to bring into the bar: locals after work; ex-pats; tourists; industry; whatever. At our bar, which focuses on craft or classic cocktails, we break down the customer base into "conservative" ("I want what I want"), "interested," and "experimental," and we make sure that we have drinks for each segment on our menus.
  
• Obviously, you need a reliable way to calculate costs per drink. I saw that $4/cocktail price and thought, "Egad." I don't know what booze costs in Manila, and I realize that some things like labor are far cheaper than in the US, but... wow. That's not much.
  
• If you have any interest in quality drinks, recognize that HR and training are by far the two most important aspects of the plan. How will you hire? What requirements will you have -- including at least a few performances of typical service situations -- for new employees? What training will they receive, at first and on-going? What will you do when these great new employees leave and you have to replace them or give them better pay and/or benefits? Develop clear job descriptions, service manuals, comp/VIP policies, inventory and cash in/out protocols; use them rigorously and transparently; and fire the first set of people who want to see if you're serious and try to screw around with your rules.
  
• Support staffing behind the bar is big, too. Will you overstaff with bar backs etc. to insure quality service?
  
• The supply chain challenges noted above are critical, which may mean that upfront capital needs to be spent on creating a solid reserve of hard-to-find products that you will use to build your brand and that you'll have on hand even if the supply dries up. We bought two cases of Rittenhouse BIB rye to this end before the bar opened up.
  
• Bar design is a huge issue. We have a few topics around here discussing it. Most people who design bars have never worked behind them and have no clue what they're doing, including the vast majority of restaurant interior designers and architects. For this reason, it's a really good idea to talk to every single bartender you see about the design piece. No matter if they're throwing shots down the stick or mixing cutting-edge stuff, they'll have strong opinions about bar design.
  
• Ice. Ice. Ice. Ice. Ice. Ice. Ice. If money's no object, buy three Kold-Draft machines and hire a full-time technician to repair them when they all break at once at 7:30 pm on a Saturday night.
  
• Start staging at the sorts of bars that follow a business plan roughly like the one you're seeking to create.
  
• Think hard about whether you want to prepare food on the premises. Or, put differently, think hard about whether you want to finance and manage one (a bar) or two (a bar and a kitchen) distinct, conflicting, and complicated economies, societies, sets of equipment, staffs, and cultures.
  
• If you're used to sitting on your job and are over 30, start developing your leg muscles and find some comfy shoes.
  
• "A lounge with good drinks, mostly classic cocktails at a reasonable price point" doesn't, to me, sound like a workable concept, especially when it comes to marketing/PR. What's the draw? The elevator sentence? If I'm out with friends and have two hours and a stack of bills to spend, what's going to draw me there?
  
• Become a POS god, or hire one.
  
• Develop a system for your cocktail recipes that is easy to access while behind the bar but can be revised as needed. This is a big sticking point at C&B; the rolodex is a disaster and we're struggling to find a workable technological solution that doesn't cost a bundle.
  
• If I were you, I'd make a mental commitment to at least a five year plan: 2 to get it up and running, one year of 70-hour weeks getting it going, one year of 60-hour weeks ironing out the kinks, and the last year of 50-hour weeks training your management team to take over.

Finally, jettison the idea that being a home enthusiast teaches you anything at all about this business. Best that you enter this thinking that you know nothing, because, if you're at all like I was (and you seem to be), you know nothing.

The restaurant and bar industry is a transient, complex industry that has little in common with the world of finance in terms of money, staff, pay rates, benefits, hours, problems, and so on. In addition, there's a lot of hanky-panky floating around the world of booze, and you'll have to learn what it is and how to deal with it. Sounds like Manila has an additional layer of intrigue that even we here in Providence don't have to face.

I had worked here and there in the industry at different moments in my adult life prior to starting at Cook & Brown, and the time I spent working in fast food chains, at an Indian restaurant, and so on were far more important experience than my hours at home perfecting my homemade bitters. If you can't get that experience in the next short while, preferably in Manila (all industry culture is profoundly local), then you'd better hire a consultant who has it.

No matter what you do, remember: You. Know. Nothing. That'll give you the conceptual room to learn all that you're going to learn to succeed.

Despise this pessimism, I certainly join those here who wish you the best. It's a tough row to hoe, but it can be a very rewarding experience if you're up for it!