There is a restaurant near me and the guy will book me. It's very good food, not upscale, a bit rustic, very small town. "Quaint" comes to mind. Not cheap, not expensive, meals are generally $10 to $18, a big ribeye is $35. Serves wine and beer. Anyone have an idea on a "percentage of the tab" pay arrangement? What percentage? We discussed cover charge, tips plus he throws in whatever or a percentage. I think I'd rather play for "tips are suggested" instead of a cover charge (cuz I think the average person will tip more than a typical cover charge), plus something from him. This would be cover songs during dinner, then a songwriter showcase afterwards. I would likely bring in, say, 30-50 people. On a Saturday night. He's pretty dead on Saturdays after 8pm, Fridays are his big night. So, I'd be bringing real value to an otherwise dead time. (Probably start cover songs at 7pm and do songwriter showcase 8:30 to 9:45.)

His entire place seats 70, but right in front of where I'd play, about 40. It's a good spot for my acoustic shows. He was pretty fired up about it, he is looking for a regular. He even has his own PA. (Peavy 12's and a mixer.) But I have my own systems, as well.

Why cant they just pay you a straight rate lets say $200.00 for the night plus tips?...why does there always have to be a weird concoctions of pay agreements with these club owners all the time.The Musician always gets screwed.. !!

oh yeah,... I played clubs years ago over 25 years..

Anyone? Ideas about percentage? I have no clue how much a restaurant could give up.

Bill,

The net profit in the restaurant business is very small, much smaller than most folks would like to believe. The guy that has the big motor yacht behind me at the marina owns a couple upscale restaurants on the Florida Panhandle, employs a large number of people and told me that in order to pay an entertainer $200 for a 4-hour job he must make up an additional $900 to $1,200 in order to break even. That should give you some idea of what it takes.

The only reason he owns a large motor-yacht is because he also owns a large real estate development corporation as well.

Gary

Gary

Know which places he owns and what part of the panhandle? Maybe we should touch base.

No, but I believe they are somewhere near Pensacola - just not sure of the names or exact locations.

Gary

Gary is right. Upscale restaurants net about 3%. Average restaurants and franchises operate at about 5% net.

Rule of thumb for music is 5% of incremental business (business the place would not have-business as a result of the music draw).

That means, $100 in pay must generate $2,000.00 in business.

Likewise, rent or building overhead should be 5%, liquor cost-34%, food cost-40-47%.

Now, if the music is part of the ambiance of the place, the percentage of business required goes down, since it is absorbed in the general overhead.

I used to get a salary or 5% of the business, whichever was greater, and I liked that. Kind of makes you take a real hard look at the business and what to do better to "survive and thrive".


Russ

I have never worked, and never WILL work for a percentage. My fee is based on my self worth, and is just a little higher than my competition. The key to getting rebooked is to sell yourself. I go back everywhere I work, based on my professionalism and marketability ... when that changes ... it's time to hang it up.
Don't let someone else tell you what YOUR time is worth - hone your craft and SELL your product. Pick a price that's fair and mutually agreeable. If you produce the goods - the money will come.

Business 101

Except, Meryl's..BallPark, Sonny's, Patricks,..Big Ed's..Golden Horse..Club Demi...Bedesems...Just to name a few..

I always got the money I asked for. Sometimes I had to work harder for it than others, but that's just the price of being a grownup. Those places you mentioned were not the cream of the crop (by a long shot), but they were steady and local ... and BTW - Meryl's was a solid job for two years, the Demi was also one of my best paying venues (hours sucked though ... 2am - 5am) and the Ballpark payed GREAT while it lasted! Silly Rabbit. Who knew that naked women dancing would draw more than bald men singing? What's this world COMING to????

Maybe it needs bald naked men singing.:) Naw, scotch that.

There are certain areas of San Francisco or New York where that format might work... LOL

Working in a restaurant, I've always felt that it was the chef's job to get people in the place and my job to keep them there for another drink or two ... even my wife isn't going to spend money to hear me play in a place where the food is bad ...
How many of you can honestly say you bring in $1000.00 or more each night by playing there ... most of the time we are just part of the cost of doing business ... "If my competition has music than maybe I should too." ...
If you can get more than the other guy, good for you ...
otherwise get what you are worth ...

I LIKE the idea of getting a fair salary, or percentage, whichever is greater.

I've put in my time and my name is worth something...extra dollars in the til.

Tony is right. Generally, it's the place that's responsible to get the folks there....unless you happen to be a draw.

When I left one place after 14 years (got tired of playing outside) customers....400 OF THEM...signed a petition to get me back.

These folks have just opened another place and want me there.

It's going to be $150.00 for three hours or 5% of the bar.
They sometimes do 600 covers a night at an average plate price of $27.90. $10,000 is a mediocre night.

I'll average $250-300.00 a night, plus tips. And, with the incentive, I'll work harder. And, this one will be inside, with music via a weatherproof sound system outside. I'll line out of my PA head inside. Occasionally, I'll set up a small PA and a guitar to alternate inside and out, to draw people inside when they're finished with dinner.

I'm done with patio's on a regular basis.


Works for me!


Russ

I agree... the function of music in a bar or club IS to be the draw. You can drink beer or liquor in any bar you choose, it is the job of the entertainment to make the bar busy.

But a restaurant... you go there for the food. The music is an incidental extra. It is a service provided by the restaurant, to further ADD to the value of the restaurant, and perhaps keep people waiting for a table happy and adds to the atmosphere of the place.

As such, the entertainment should not be required to bring in enough extra business to justify its cost. It is the restaurant manager, trying to add cachet to his place.

Exactly. The idea is to keep the crowd 'up' and having a good time. A feelgood crowd will stay there rather than wander off somwhere else, and they're more likely to put their hand in their pocket. They feed off you, you 'feed' off them.

At the Tiki Bar where I'm playing tomorrow and Friday nights, I am the draw. The resort manager told me there is usually a half dozen or so locals that came to the happy hour on Wednesday and Friday. They hired several "Have Guitar Will Travel" type entertainers, and the crowd doubled to about a dozen locals, none of which stayed any longer than the 3-hour happy-hour time. When the price went up, it was like the roaches scattering when the lights come on.

When this upstart Yankee arrived on the scene, which was a couple months ago, the crowd size grew from a dozen to 50 or so the second night a performed. (Guess word of mouth advertising still works.) Last Wednesday evening I had just over 100, and for the most part they all stayed until I quit playing, which was just after 8:30 p.m. - 2-1/2 hours after happy hour ended.

Here at the marina, the guitar player, who was he guy who got the Saturday evening jam session started six years ago, the average crowd this time of year was about 30 people. Now, the crowds range from 125 to 175, depending on the weather.

I'm not braggin', but on the nights when the guitar guys are at the resort's tiki bar, the crowd drops back to a dozen locals. The manager said she would love to have me there every night, but even with 100 people at the bar, there's not enough profit to justify the expense. Additionally, the bar tender said unless she hires another bar tender to help him on the nights I was performing, he was seriously considering finding another job because he couldn't keep up with the additional workload.

Now, I only get paid $100 from the resort for a three-hour performance, and the tips range from $85 to $125 for the period. From that I have to subtract $14 in taxi fare to get to and from the job. Not a bad take for a three-hour performance, and I have a ball performing for the audiences here in Paradise. Unfortunately, the cost of living here is so high that you cannot make a living at these wages, even if you performed every night of the week, and lived aboard a sailboat. I'm looking forward to getting home and going back to the senior circuit once again.

Cheers,

Gary

What utter rubbish! You are bringing in about 100 more people than usual. If they only bought ONE drink each, your pay is paid for! Profit margin on liquor is massive. $6 a drink, about 17-20 shots in a bottle (depending on pour), $100-120 roughly per bottle (that cost them probably $12 wholesale). So let's say maybe $100 profit per 20 drinks. So $500 extra profit for 100 people buying ONE drink.

Any of your crowd only buy ONE drink?

You don't need to be talking to the bartender... you need to be talking to the OWNER!

UTTER RUBISH? Lets see, What part about happy hour don't you understand. $2 draft beers, $3 mixed drinks, pay the bartender, pay the tiki bar rent, pay the utilities - yep, they're making a REAL KILLING. Give me a break.

Gary

Do the math... even at $3 a mixed drink (and trust me, that's bottom shelf stuff for those!), that's at least $250 per 100 people, paying for ONE drink (and don't tell me the Tiki bar is the AA hangout!). OVER THE TOP of their usual profit.

Bartenders do not make even minimum wage, as tips are counted as part of their income (same with waitresses).

You are bringing in at least 3-4 times the business the bar has when they stick to the kid guitarist on a stool. Somehow they can stay open for that, but they can't when you bring in 3 or 4 times as many people?

Yes... rubbish!

Actually, there are a lot of "fives" in the formula. Bars make lots more money than restaurants. Local bars with "comfort food" do better than restaurants.

Bar cost for a well-managed bar is 34-39% of sales. Rent on the low side is 5%. Miscellaneous labor is 7 1/2%. Utilities are 8%.

Business licenses are around 9%. Repair and depreciation of kitchen equipment and fixtures is in the neighborhood of 11%.
Ideally, musician/entertainment costs should be 5%, but often go higher. Food costs are in the mid-40's. Then, there are accounting/bookkeeping fees, taxes and management salaries (usually, 10-15% of volume). Most people are paying debt service and interest.

At best, that generally leaves 5% for reportable profit. What's confusing is that the net profit is figured after interest payments and salaries to owner/operators.

Run well, a $1,000,000.00 operation, with numbers that fall in the normal parameters would generate a $50,000.00 annual profit, a %50,000.00 salary for owner/manager, and $25,000.00
for entertainment.

Of course, assuming it is all bar sales, that would be over $3,200.00 a day in business. If food were factored in, the cost goes up, as does the required daily volume (it is $3,477.00 daily volume, with a 45% food cost and a 50/50 mix of food and booze sales.

Excuse the numbers, but I do audits and cost management consulting to restaurants/bars and other service businesses. That's the old "bean counter" in me.

It's rough out there, folks!


Russ

Diki, I don't know if you have ever owned and operated a retail operation, but I can assure you that the bartender's salary is the least of the expenses. I have owned and operated a retail business, a relatively large outdoor store. While the gross profit ranged from 10 to 40 percent, the net is often a tiny fraction of that. Have you ever wondered why so many restaurants and bars fail? Statistically, they have the highest business failure rate of all retail establishments. As captain Russ tried to explain, the profit margins are extremely small when you look at the entire operating cost.

When I had my store, which was in the late 70s and early 80s, just the rent for a 1,500 square-foot store in a mid-size shopping center was more than $4,000 a month, electricity raged up to $1,200 a month, salary for single, retail employee, who doubled as an outboard motor mechanic was about $1,000 a month, telephone bill including yellow pages add hit $500 a month, then there were taxes, loan payback with high interest, book-keeper, accountant, and more ancillary fees than you can imagine.

So, that $2 happy hour bottle of Coors Light may have a net profit of .05-cents, even when you sell 100 of them. Same percentage holds true for the mixed drinks.

Then, of course, as you well know, Florida's tourist trade doesn't last 365 days a year. Down here in the keys, the touristas are here from January through April, then the keys become a ghost town. But, the businesses stay open year round. Right now, there's traffic jams on U.S. Route 1 every day, people going to and coming home from Key West, Marathon, Big Pine Islamirada, etc... By the 1st of May you could almost take a nap in the middle U.S. Route 1 here and not have to worry about being run over.

Hopefully, this will clear things up a bit,

Gary

I think Diki is confusing the markup with the net profit. It's true that a drink costs about 1/5 of what they charge for it, but after you add all the operating expenses, the profit get nibbled at quite a bit. Doesn't change a thing in my mind ... entertainment is a part of the operating expenses and needs to be budgeted for. If they expect the crowds to pay for the entertainment, they need to charge at the door.

Thing is, the rent on the Tiki is the same whether you open one day a week or 7.

The point I think you are all missing is, the business is already in operation. The rent is already paid. The coolers are stocked. Only thing missing seems to be customers, and Gary is providing them.

If Gary is not sufficient to keep the place running, it should have closed LONG ago. But it hasn't. Apparently, the place stays open even when only 30 at the bar. But bring in 100 more, and they are suddenly struggling? Something is downright fishy here...

Truth is, in all probability, this is more to do with a manager and a bartender not wanting to work any harder than they currently do, not whether there is profit to be made. I'm sorry, but so often I see restaurants and bars go downhill the moment the owner hands them over to a manager. Owners run places to make a profit, no matter the effort. Managers run places to maximize their income balanced against the minimum effort. And, 9/10 times, if making a bunch more profit for the owner doesn't make THEM a bunch more money, and ups their workload, it doesn't get done.

This sounds like the manager tanking it. Trust me, I work in highly corporatized resorts. No-one is looking out for the resort. Everyone is looking out for their job... do the least work, for the most money. And the hell with the resort if that doesn't make the resort money.

Diki makes a valid point. My approach is a classic one, designed to plan your business so that expenses are generally in line with accepted, successful business plans. Fixed costs are apportioned to EVERY line item account (expense category).

But, the fact is, If you look at Gary's contribution to the bottom line as INCREMENTAL, the story is different.

If you assume that the overhead, debt service, rent, maintenance, taxes, etc. were ALREADY being absorbed, then you figure what the incremental volume was and subract only the salary and pure bar cost (cost of goods). Subtract those two figures from the additional volume and that's the incremental gross profit (before taxes).

Let's just say those 60 additional people drank $1200.00 in incremental volume. You'd subtract the liquer cost (Approx $480.00) and the entertainment cost ($150.00??), for an INCREMENTAL net of $570.00 for the night.


The difference comes in where you apportion all of the fixed costs.

I stick by my formula as a general way to apportion costs in a service operation. But, on a slow night, I'd hire a Gary or Diki, UD, Tony or Don....maybe even Russ and happily make my bank deposit the next day.

No one is wrong on this one, guys. It's a matter of semantics, accounting practices and definitions.

In reality, most bars have two cash registers, steal the amount rung op in one (just don't report it), buy replacement liqueur (that's why you see so many unmarked vans and trucks at liqueur stores on Sundays around here) so the ABC does not get suspicious at your high liqueur costs and go on from there.

I never audited a bar or restaurant operation where someone wasn't "knocking down".


It's just part of the business.

Sadly, there's some truth in the saying that the only way to make good bread is to "Steal from yourself".

Sorry for the misdirect, but this is a really interesting part of the bar/entertainment business.

KUDOS to Diki for sticking to his guns and telling the "other side" of the story.


Russ

Wow!! Some of you folks must have gone to the same college as Barbara Walters, Hugh Downs and that Stossel (Stocel or whatever his name is) fellow.

They sat there with a straight face (on "WE're in touch, so you be in touch) and told the American public that the owner of a new car dealership) after expenses made a $100 profit a car. If you believe that, you are a pathetic naive A$$hole. Ha ha!

For instance: My son sold cars at KIA. Mind you that I don't think KIA is on par with Toyota, Ford, Chevy and Honda etc., but the least he made on a car sale was around $100 and on some sales he made over $800, but Stossel said that the owner of Ford and Toyota dealerships made only $100 on each sale. Boy was he stupid, and Barbara and Hugh went right along with him. In other words the owner at KIA where my son worked, had to sell 8 cars to make the same amount of money my son made on a 1 car sales deal of $800 profit to my son.

If all what you guys are saying is true, they must be making it on prostitution and drugs. How else would they keep the doors open.

I had a friend who owned 2 clubs on Bourbon Street and one in Gretna La. For many years and he also owned a car parts store. I grew up with him. Believe me he wasn't working these businesses on the profit margins you guys are talking about. Go look at the houses that these guys and their family's are living in and the cars that they are driving.

Yes, at start up any one can go broke even with a shoe shine stand. I went broke after two years of trying to sell cars when the economy went busted. I sold 26 cars in 2 and a 1/2 years, but the least I made on a sale was 3 or 4 hundred dollars. I made up to $2000 each on a couple of the sales and all I was selling was autos from $500 up to $3600. Not $70,000 dollar pick-up trucks and SUV's. Can you imagine being in any business selling a $70,000 item and making a $100 profit? How absurd.

The places that have been restaurants and bars for years are making more profit than you guys are claiming. If they are only making what some of you are claiming, you should be ashamed of what you're taking from their families and should be playing for free. I mean some of you are doing over 300 gigs a year. You have any idea how much money that is at $100 to $200 or more a gig sometime twice a day.

Wait a minute I'm gonna call the mathematician at the local Mesa State College and see what he comes up with. Oh! he says that he won't tell because it is impossible for anyone to make that much money with an electronic keyboard playing 3 chords tunes all night. Go figure. You keyboard guys are making more money the the huge new car dealerships and the people who own 1 to 5 million dollar restaurants and bar establishments.

You guys should buy the restaurant owners who told you all of this crap, a keyboard and teach them the three chords in the key of "C" and how to use the transpose button. They will increase their profits. Ha ha.

This stuff tears me a new “A” hole every time I come across the naive folks and gullibility of the American public. I guess that why some of the folks who run the country get elected eh?

Robots believe what ever they are programmed to believe. There are a few exceptions to every rule and situation., but not clear across the board friends. This is my most humble opinion based on facts that I lived.

Don't hold back Boo. What are you trying to say?