Saturday, August 14, 2010

Nine Days ?

E-V-E-R-Y D-A-M-N T-I-M-E!
The problem with most club owners is that few understand the business of owning a club.
Most assume that they are supposed to sit in their VIP section.
Most assume that they are supposed to drink all night for free.
Most assume that they are the center of attention.
Most assume that their business is predicated on their own ego and not that of their patrons.

Most club owners feel that they are above doing any work.
That the details are the responsibility of their employees.
That being the owner makes them the most important person in the building.

But this thinking is wrong.
Nobody goes to a Lakers game to watch Jerry Buss own the team.
No one goes to the games to watch Phil Jackson coach the team.
The statistical and financial success of the team is dependent upon the performance of it's players.
The quality of the players (employees) makes the team - not the coaches (managers) or owners (owners).
(Although, as in sports, a bad manager and/or owner can ruin a team.)
But this philosophy is lost on those who decide to open a club to stroke their own egos.
This way of thinking is lost on those who imagine that they will finally be able to buy a spot among the 'cool kids' by owning the cool spot.

One of the biggest mistakes people make, when dealing with sudden success, is in expanding too quickly.
Circuit City was once the dominant force in home electronics.
It's place was so secure and profits so steady that the company decided to change it's business model from that of being a destination store to that of being a saturation chain.
The company decided to spend more money to look better than it was able to take in.
But this model proved to be it's downfall.
With a store in almost every city and on every part of town - the chain could no longer meet the sales goals required to keep the company profitable.
Circuit City had become too successful for it's own good.

Another mistake people make is to cut costs on the small details that matter.
Chrysler's PT Cruiser was a huge success.
The model was both retro and progressive at the same time.
The company was selling out of this model which appealed to car enthusiasts and soccer moms alike.
But Chrysler decided to cut cost and cheapen it's product.
(Hoping that no one would notice the poor fitting parts and cheaper materials.)
Today - Chrysler doesn't even make the model which jump started the company's rebound.
Club owners always do the same thing.
Club owners often decide to spend too much of their profits on themselves and then cutting costs on the things which made their club a success in the first place.
Of the three clubs I consulted for - only one remains open.
In the cases of the two that failed - the club owners failed to understand their niche.
They failed to understand that which they did best.
Each tried to do what the others were doing in an effort to get a demographic which was not their own.
No one goes to Taco Bell looking for fried chicken.)
Each created animosity between themselves and the other local club owners.
Each tried to make himself look good by trying to make the others look bad.
The sole surviving club scooped up the employees from the failed clubs and continues to treat them well - creating an environment where potential employees hope to work at this particular club for less in the hopes of working their way up.
One of the failed clubs lasted only a month after I'd left.
The other - nine days.

5 comments:

  1. When I worked in radio I worked with a few club owners. Many saw their club as a piece of jewelery rather than a business. Which meant that they spent more time showing the club off than running it.

    And the service at Circuit City was horrible.

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  2. @ Val - Circuit City used to provide good service.
    But with their growth came a diluting of talent (Kind of like in the NFL. When there were only a few teams, second string quarterbacks were as good as many starters today.)

    But yeah, club many club owners are just looking to get their shine.
    That's why I charge a lot for a short time.
    If they choose to to waste their money - I'll take it.
    It helps to fund other projects.

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  3. I drive by clubs all the time... thats about all I know about them.

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  4. I've always noticed that the most successful businesses are those where the owners keep their fingers on the pulse.

    As the saying goes, The eye (or close observation of) the owner is what will fatten (or keep healthy and well) his horse.

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  5. Vanity is a mofo and if you are the guy who is in charge of providing vanity for others you become famous. I mean damn even the bartender gets some play from being at a club.

    Truth be told man I hope you come and show me how to run one so I can get that sin tax money in my pocket too. I want to run a jazz club so I hope the pattern is the same.

    Women, Booze and Fame make many a man lose what actually got him all of it. Discipline!

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