Korean Bar Reports

[QUOTE=Blade82;4770285]I'll tell you why because nobody can survive this anymore. This shit not only got so twisted, complicated and disorganized. Already the curfew we had Easter weekend was totally unnecessary. What I can't understand is why the hell is golf courses and car dealerships among the first to reopen. There's a lot more essential businesses that shouldn't even have been closed to begin with. Now week by week more and more is going to reopen. But the stay home order has still been extended to end of May. From a social standpoint, I dont know about your guys area, but I can see theres becoming more and more gatherings at houses, more people at the parks. People are getting to the breaking point already. Some businesses, particularly restaurants and bars maybe still won't be able to survive if they got restrictions. Really sad likelike already fell victim to all this.[/QUOTE]Yea curfew. For Hawaii. That's a big laugh. They want people to stay home so they make the curfew at 11. WTF. If they want people to stay home. It should be 10 since everything is close.

We've got some well informed members in this thread. I'd really like to build an accurate breakdown of the KB business model to determine some "no shit" break-even metrics. I'm sure we could nail it within a few responses with meaningful feedback and discussion.

Really. How many customers, (and how much do they really need to spend), does it take to keep a typical small Kalihi KB viable?

Typical small KB being, say like Club Honu in Waiakamilo Shopping Plaza.

Personnel: 1 Mama, 6-12 hostesses, 2-3 bartenders, 1-2 barbacks, 1-2 kitchen mamas. Converted to full-time equivalent (FTE), say 6 hostess, 1 bartender, 1 barback, 1 kitchen mama. QTY: 9 FTE employees (EEs).

Capacity: 12 at the bar, 12 booths that can seat 4 customers comfortably. 1 private room that seats 4. Say max capacity (pre-COVID19) is 64 customers. Post-COVID19, cut that by a third to say, 22 customers.

Operating hours: noon to 2 a. M 7 days / week.

Lots of assumptions and a few known facts:

FIXED COSTS.

Monthly rent: $10 K for the bar This makes sense. Retail rent in is roughly $3 per square foot. The typical bar is about 3,000 to 3,500 square feet. For simplicity lets say this includes utilities, common area maintenance fees, and liquor commission and bar license fees, and even property taxes. Since most "operating" Mama's are really paying a one-year sublease from the long term tenant who actually holds the business license.

Payroll: going to need some help on this.

Mama. Not sure how much she pays herself, but say at minimum she pays herself $7 K / mo. Which comes out to $84 K / year. Just above the state household median.

Hostess / bartender / barback / kitchen mama. I've heard a lot of variables on this. Anywhere from, say $2 k a month to a weird blend of prepayment contract (I. E. $20 K upfront for 6 months? To covered rent for a place to stay. Let's say $2 K / month FTE, for a total of $18 K / mo payroll for 9 FTE EEs. If Mama is renting apartments to house the girls in lieu of salary, let's say it is somewhat the same cost. Note that for this model, this does NOT include the girl's total compensation. She gets her $15 for every $20 neko on top of her fixed compensation. Similarly bartenders, barbacks, and kitchen mamas get their tips that really aren't covered by the Mama's fixed payroll cost. I know there is a big difference between hostess and bartender compensation, so chime in if you can provide facts and not just assumptions.

So we're at $35 K / mo. For the biggies of rent ($10 K) and payroll ($25 K).

Fixtures, Furnishings, and Equipment (FFE) costs: Tough one to guess. I'm thinking that the karaoke machines and sound machines are somewhat on consignment. There are upfront renovation costs and cable TV fees. Plus the LCD screens, cleaning, laundry, and odd service call for the air-conditioning, electrical, and plumbing work. And utensils, plates, dishes, cooking pots & pans. Disposal fees. I'm going to guestimate at $5 k / mo. , which would include initial build out costs that we'll spread out into the monthly. This would bring Mama's fixed costs to $40 K / mo.

INCOME.

For variable costs and income, I'm going to express in terms of margin. Basically, the bar only makes money the following ways:

Sell beer, wine, and hard liquor: 80% gross margin. I got this from a Google search. That is, for every $10 you spend on drinks (for you and the KBG), the bar clears $8. Granted, your beer is $3 and hers is $5, so the average margins are higher depending on how many more drinks the girls purchase than the customers do. Those of you who know the alcohol wholesalers. Feel free to chime in.

Sell food: 70% gross margin. Similarly, the $20 plate costs $6 in raw food and the bar clears $14. Based upon what I see at KBs, I think a 70% margin is generous. My guess it is higher. I also hear the Mamas complain that they really don't make any money on food. I get this. The gross margin may be 70%, but when you consider the fixed cost of the kitchen mama and all the other fixed expenses (already accounted for), the net margin is small. I see that most kitchen mamas are under utilized. But we customers won't come to the bar if there isn't food and pupus to go with our pau hana beers.

So all these margins for alcohol and food must add up to $40 K a month for Mama to break even. I don't purchase a whole lot of food when I visit the KBs. But I notice that other patrons do. I think in total much more of the revenue comes from drinks, and together with the KBGs consuming drinks at a higher margin, let's say on average the margin for food and drinks is really 80%. So to make $40 K a month to break even, her customers and KBGs need to purchase $50 K / mo. On food and drinks.

I'll end this post here so that you can respond or comment on fixed costs and margins. I'll continue the break-even metrics analysis in a separate post.

BREAK-EVEN METRICS.

$50 K / mo. Comes to $1,667/ day or $138.80/ hr for a 12-hour day. But business really varies by day and hour, so I think a weekly break-even revenue of $11,667/ wk is easier to consider. Say $12 K a week, because from week to week overall the revenue is stable and consistent, not counting for football season and March Madness. We can refine later, but for now let's keep it simple.

Now. The typical days & hours in a bar week. I submit to you that there are 3 time periods, and 3 types of days.

Slow days. Mon, Tues, Wed. Lets say on slow days Mama needs $1,000 in revenue on average.

Busy days. Thu, Fri, Sat Lets say on busy days Mama needs $2,500 in revenue on average.

Medium day -Sun Lets say on Sunday Mama needs $1,500 on average.

That's $12 K a week to break even for the month.

And the time periods are the same for each day:

Noon - 3 p. M: early afternoon, kinda slow, except for golf party days on Thu, Fri, Sat, Sun.

3 pm - 8 pm 5 hours of happy hour / pau hana. Kinda steady Sun. Wed and busy Thu-Sat.

8 pm - 1 am 5 hours of nightlife.

For this part of the analysis. I think it is easier to consider four types of customers (or groups of customers) and their drinking and spending habits:

Customer A. Solitary cheap charlie. He may be a day drinker or an afternoon / late evening wall flower, but he doesn't stay long. He drinks one or two drinks and maybe from time to time buys a bartender a drink if she pushes him. He might buy food, but in real dollars he spends $6 for two beers and leaves a small tip after about 20-30 minutes. Two or three of these guys might collectively purchase a drink for the bartender, and collectively averaged they all spend $20 and occupy one seat an hour at the bar. So customer A's revenue rate is $20/ hr at one bar seat. Mama breaks even if on average if she's got 7 A's at the bar every hour she is open. Imagine that. He's not that different from local bar drinkers.

Customer B. Good, loyal, regular bar customer. He sits at the bar 3 or 4 times a week and spends at least one, but usually two hours at the bar per visit. He orders and eats food, say one $20 dish for the visit. And he buys the bartender a $20 neko at least once per hour. He's a practiced drinker and consumes 4-6 drinks per visit. So out of his pocket he spends about $80 - 100 dollars per visit - $20 for food, $20 for his own drinks, and $40-60 for the KBGs in drinks and tip. But the Mama or bartender usually buys him a drink or two. Customer B's revenue rate is $30/ hr at one bar seat.

Customer C. The hostess's customer. Mr LVB. I don't know how often he comes to the bar, but it really doesn't matter from the bar revenue model standpoint. When he comes, on average he has 2-3 drinks for himself and if he is disciplined, he buys 4 drinks for the hostess an hour. I think most hostesses are better than that, though. I'd say a journeyman hostess can haul a drink every 10 minutes, or 6/ hr. And let's be real. She's buying his drinks, too. His wallet is draining at $120/ hr, This guy is spending $150-$300 a visit. But not every single day. Maybe 2-3 times a month. So C's revenue rate is $40/ hr (his 3 $3-4 drinks and her 6 $5 drinks). He's not at the bar. He's in a private booth all to himself with his KBG.

Customer Group D. The private golf or celebration party. They occupy a whole booth. Say a group of 4 customers and are serviced by a single hostess. They are eating and drinking ALOT. Say 2-3 food orders per customer and consuming 2-3 drinks an hour. The hostess is consuming drinks at the same rate. They buy the Mama drinks. Mama buys them drinks. The party lasts 3 hours. All told the group of 4 drops a $600 tab - $200 for food, $150 for their drinks, and $250 for KBG drinks and tip. Their collective revenue is $140/ hr per booth, So individually they generate more per person than B but not as much as C. But C takes up whole booth, as does group D.

Ok, so four kinds of customer types / groups. A: $20/ hr / stool, B -$30/ hr / stool, C - $40/ hr / booth, D -$140/ hr / booth.

This is how it breaks down:

Slow day - $1,000.

Early afternoon: $100 revenue over the 3 hour period. Maybe a couple of As and Bs. At any given time, the booths are empty and only 1, maybe up to 3 stools taken at max during this time.

Happy hour. $500 revenue averaging $100/ hr. This is 3 As and 2 Bs on average at the bar per hour. Sure it may get busy for an hour or two when all 12 stools are taken, but the booths are empty the whole time.

Nightlife: $400 revenue averaging $80/ hr. A couple of hostesses are working and you've got a couple of As at the bar and a C in the booth on average during this time.

Medium day - $1500.

This is Sunday, but throw in a golf party in the early afternoon, and golf party in the happy hour time frame, and Mama is making 50% more revenue over the slow day even with less pau hana regulars.

Busy day - $2,500.

Basically it like Sunday, but it is twice as busy during happy hour and at nightlife.

Happy hour - $1,000 revenue averaging $200/ hr. Bar is more full and as well as a party or two in the booths. But there are never more than 22 customers in the bar. Not even close.

Nightlife: $1,000 revenue averaging $200/ hr. Twice as many LVBs in the booths plus a party or two. Bar is about as full as happy hour. Again never more than 22 customers in the bar.

TAKE-AWAYS.

So here are my take-aways from this rough analysis:

You really don't need a high quantity of different customers to support the KBs. I think the lifeblood are the A and B customers who regularly support the bar. Second are the D group. Somebody. Go ask a veteran bartender or Mama and find out how many different faces she sees in a week. Less than 100 I'm sure.

My thoughts on LVBs: The model assumes customer C LVB 50 hours in a week generating only $2,000 revenue weekly. Mama has 12 hostesses, some very irregular and some working almost every day. So roughly speaking the hostesses each on average provide a little over 4 hours of LVB service per week that brings money to the Mama. I think the LVBs, particularly the ones that splurge for champagne service is what makes Mama and the KBGs money beyond breaking even. I also think this really illustrates that KBG hostesses can really only survive with direct support by LVBs outside the bar. How many LVBs supporting a given bar? Less than 12 is my guess.

My point is LVBs don't make or break the bottom line for a KB. They make money for the KBGs. But the Mama's need enough eye-candy KBGs to attract and keep regular As, Bs, and D group customers. Otherwise they go to regular local bars for eye-candy and attention.

I think post lockdown COVID will only affect the bars as much as the regular As & Bs stay away. Ironically small bars with lower rent overhead will prevail. Less bars mean more regular A & B customers for the bars with smart Mamas and bartenders who provide good service. It's the big bars with high fixed costs that will close. The social distancing won't prevent them from surviving. But it will prevent them from thriving. Those peak occupancy times on Friday and Saturday will just mean lines to wait outside or give business to other clubs. KB survival requires small and steady the whole week vs big and busy only for a few hours on the weekend.

Mamas should consider getting rid of their kitchens and using Uber Eats to bring in food from other restaurants or kitchens that stay open til late.

One last thing. My model deliberately ignores federal and state income tax. And employment tax. KBs are cash ventures and they never disclose their profits and pay minimal employment taxes. This is a huge advantage that KBs have over regular local bars. I don't think KBs will be going away anytime soon, as long as they can still attract KBG bartenders who are willing to work crazy hours for little or no guaranteed pay. Or Mamas who are willing to work 80 hours a week to bartend at their own bars.

GG.

How I see it is the kbg converts your A customer into a C customer. C customers will not be created without the kbg. You can look at them as paying for the kbg overhead.

A smart mama doesn't pay a kbg unless the kbg can produce money for the bar.

As warriorforlife has said in the past, maybe 80% of kbg don't get any salary from mama, just working on tips.

The top tier kbg get salary, but then they better at least match the salary with the money they punch in with their drinks.

So if a kbg is getting a $2000 salary from mama, then she must have at least $8000 in drinks, $6000 for kbg and $2000 for the bar each month. $8000 in drinks is probably about 40 bar visits from her LVBs spending $200 per visit. If the bar girl works hard for 16 days a month, then she will have 2. 5 customers a day. Generally the kbg wants her lvb to pay her a visit at the bar at least twice a week before extra services are offered. So a kbg with 5 LVBs can make $6000 from LVBs and $2000 from mama. So that is where we see the $10 k to be their boyfriend cause they are making around that much from working bar.

KBs survive rate depend of how many drinkers will take risks of going back. I would say casual drinkers probably will wait 2 or more months or so for the virus to clear before going back. Hard core drinkers will need to be more caution if they do going back. There is still.

Lot of asymptomatic carriers out there. Just think many of these princesses have close contact with the drinkers all night long. They are probably in the high risk category and so do the bartenders.

Some of these princesses might not going back to work right away. Most of them do not have health insurance. If they do get infected. Their medical bill probably is in the thousands. ICU staying bill could be even much higher.

[QUOTE=MeCook;4771841]How I see it is the kbg converts your A customer into a C customer. C customers will not be created without the kbg. You can look at them as paying for the kbg overhead.

A smart mama doesn't pay a kbg unless the kbg can produce money for the bar.

As warriorforlife has said in the past, maybe 80% of kbg don't get any salary from mama, just working on tips.

The top tier kbg get salary, but then they better at least match the salary with the money they punch in with their drinks.

So if a kbg is getting a $2000 salary from mama, then she must have at least $8000 in drinks, $6000 for kbg and $2000 for the bar each month. $8000 in drinks is probably about 40 bar visits from her LVBs spending $200 per visit. If the bar girl works hard for 16 days a month, then she will have 2. 5 customers a day. Generally the kbg wants her lvb to pay her a visit at the bar at least twice a week before extra services are offered. So a kbg with 5 LVBs can make $6000 from LVBs and $2000 from mama. So that is where we see the $10 k to be their boyfriend cause they are making around that much from working bar.[/QUOTE]

[QUOTE=WarriorForLife;4771989]KBs survive rate depend of how many drinkers will take risks of going back. I would say casual drinkers probably will wait 2 or more months or so for the virus to clear before going back. Hard core drinkers will need to be more caution if they do going back. There is still.

Lot of asymptomatic carriers out there. Just think many of these princesses have close contact with the drinkers all night long. They are probably in the high risk category and so do the bartenders.

Some of these princesses might not going back to work right away. Most of them do not have health insurance. If they do get infected. Their medical bill probably is in the thousands. ICU staying bill could be even much higher.[/QUOTE]I feel bad for your Fox princess and other kbg her age. Your Fox and other kbgs her age have told me how very scared they are right now about corona virus. They don't want to meet anyone right now. I am being told to wait until after the governor says it is safe.

Lucky for me a younger kbg that I know is still ready to go play with me.

Anyone else having problems meeting with their favorite kbg?

I don't know how much this will happen again, but what was a real money maker for the Korean ladies with connections to Japan were the Japanese businessman tours to Honolulu. The Japanese speaking Korean bar girl would set up a tour for the Japanese executive and his party with girls at the bar, at the golf course, and a girl for the night back at the hotel. They would bring in over $10 k a day off of a week long tour. A kbg that I know would setup a couple of these a year. Maybe warriorforlife can ask Kay about more details about it. I don't think the younger kbg have the know how to make it work.

If Trump is serious about making meals and entertainment expenses tax deductible again, then we might see some of it again with the US businessmen. Don't think our politicians will be back anytime soon.

Honey Fox is in every unique situation, because of her popularity, no shortage of customers. She told me once she is like a rock star, people follow where ever she goes. COVID 19 scare off a lot of customers and KGBs.

[QUOTE=MeCook;4773312]I feel bad for your Fox princess and other kbg her age. Your Fox and other kbgs her age have told me how very scared they are right now about corona virus. They don't want to meet anyone right now. I am being told to wait until after the governor says it is safe.

Lucky for me a younger kbg that I know is still ready to go play with me.

Anyone else having problems meeting with their favorite kbg?[/QUOTE].

A Korean bar girl has a couple of rules that she follows. If you or her breaks them big problems will occur.

First rule is that that a customer can only belong to one bar girl. Generally the girl that the customer buys drinks for first is declared the owner of the customer. If the customer is a regular of the bar, he is the house customer and will belong to the mama.

This means that you will be able to sleep with only one girl at a bar and any other girls at the bar or that she would introduce you to will not be willing to go to bed with you. If you break this rule, please let us know so we can get ringside seats for the bar fight.

Second rule is like the first. A bar girl can not be shared among friends. Your friend's bar girl that he is a LVB with will not go to bed with you if she knows that you are his friend. I guess that they know how to avoid drama.

[QUOTE=MeCook;4773540]A Korean bar girl has a couple of rules that she follows. If you or her breaks them big problems will occur.

First rule is that that a customer can only belong to one bar girl. Generally the girl that the customer buys drinks for first is declared the owner of the customer. If the customer is a regular of the bar, he is the house customer and will belong to the mama.

This means that you will be able to sleep with only one girl at a bar and any other girls at the bar or that she would introduce you to will not be willing to go to bed with you. If you break this rule, please let us know so we can get ringside seats for the bar fight.

Second rule is like the first. A bar girl can not be shared among friends. Your friend's bar girl that he is a LVB with will not go to bed with you if she knows that you are his friend. I guess that they know how to avoid drama[/QUOTE]I have broken this rule many times especially at 904, Starlite, Waterfall, Cleopatra, Green Tea and almost all Vietnamese bars. A closed pussy doesn't get paid even more so because of the pandemic.

[QUOTE=Blackbriar;4773563]I have broken this rule many times especially at 904, Starlite, Waterfall, Cleopatra, Green Tea and almost all Vietnamese bars. A closed pussy doesn't get paid even more so because of the pandemic.[/QUOTE]Truth! Girls move around and if they know you spend the pussy comes easier. Friendship doesn't pay their bills. Now I have walked in a bar to find that girls have moved there and it can be awkward for sure. These women can be scandalous and I've had their friends whispering me crazy shit right next to my girlfriend. Smart bar girls don't trust their friends either.

[QUOTE=VietWhisperer;4774274]Truth! Girls move around and if they know you spend the pussy comes easier. Friendship doesn't pay their bills.[/QUOTE]Survival is business for the KBGs (big business on the outside of the KB, that is).

[QUOTE=Blackbriar;4773563]I have broken this rule many times especially at 904, Starlite, Waterfall, Cleopatra, Green Tea and almost all Vietnamese bars. A closed pussy doesn't get paid even more so because of the pandemic.[/QUOTE]Not many problematic rules nowadays. Not saying 'anything goes,' but willing pussy gets the attention despite the COVID 19.

[QUOTE=MeCook;4773540]A Korean bar girl has a couple of rules that she follows. If you or her breaks them big problems will occur. First rule is that that a customer can only belong to one bar girl. Second rule is like the first. A bar girl can not be shared among friends.[/QUOTE]In the past, yeah. Although sometimes still liddat, the rules have kinda lapsed and laxed now; besides, a few KBGs come from the adult industry on the mainland, Korea, and Japan anyway.

[QUOTE=WarriorForLife;4773467]Honey Fox is in every unique situation, because of her popularity, no shortage of customers. She told me once she is like a rock star, people follow where ever she goes.[/QUOTE]Now you know why she 'rock star' (IMO). Get average of 5-6 guys chasing one KBG regardless of their looks or age; popular KBGs often get at least 20-30 chasers. When the gov gives the green light for restaurants and bars, going be mean.

[QUOTE=MeCook;4773540]A Korean bar girl has a couple of rules that she follows. If you or her breaks them big problems will occur.

First rule is that that a customer can only belong to one bar girl. Generally the girl that the customer buys drinks for first is declared the owner of the customer. If the customer is a regular of the bar, he is the house customer and will belong to the mama.

This means that you will be able to sleep with only one girl at a bar and any other girls at the bar or that she would introduce you to will not be willing to go to bed with you. If you break this rule, please let us know so we can get ringside seats for the bar fight.

Second rule is like the first. A bar girl can not be shared among friends. Your friend's bar girl that he is a LVB with will not go to bed with you if she knows that you are his friend. I guess that they know how to avoid drama.[/QUOTE]This post by MeCook is so true and is total reality as I have experienced and lived it. A couple of time I broke these rules and endured the consequences put forth by the KBG at the time I so called insulted. I've had drinks thrown at me, yelled at, sworn at and after the smoke cleared Kbg would treat me loingly like nothing happened. A show to let other kbgs whose property I belonged to. Smh. Wised up since and reduced my time going to KBs the past few years. This was during the KB prime era so not sure if it applies with the princesses currently.

The foreign owner cash business advantage is that they do not pay taxes. Example, swap meet businesses.

Your numbers may be good but there is a KB culture that we can barely understand. There are subleases that add on premiums to the rent which make it hard to pay with normal bar revenue. It will be interesting to see what happens after this pandemic as reputation within the world is important, but so is the love of money.

There are businesses within the KB, such as the karaoke waiter has to depend on tip kickbacks and the karaoke dollar. The bartender partners buy their own food and depend on tips, and even have to pay the bareback daily pay. Each girl is her own business which needs to generate money and expense of kickback to the waiters, manager, kitchen mama. All will cockroach the house whenever they can.

[QUOTE=Glogauer;4771105]TAKE-AWAYS.

So here are my take-aways from this rough analysis:

You really don't need a high quantity of different customers to support the KBs. I think the lifeblood are the A and B customers who regularly support the bar. Second are the D group. Somebody. Go ask a veteran bartender or Mama and find out how many different faces she sees in a week. Less than 100 I'm sure.

My thoughts on LVBs: The model assumes customer C LVB 50 hours in a week generating only $2,000 revenue weekly. Mama has 12 hostesses, some very irregular and some working almost every day. So roughly speaking the hostesses each on average provide a little over 4 hours of LVB service per week that brings money to the Mama. I think the LVBs, particularly the ones that splurge for champagne service is what makes Mama and the KBGs money beyond breaking even. I also think this really illustrates that KBG hostesses can really only survive with direct support by LVBs outside the bar. How many LVBs supporting a given bar? Less than 12 is my guess.

My point is LVBs don't make or break the bottom line for a KB. They make money for the KBGs. But the Mama's need enough eye-candy KBGs to attract and keep regular As, Bs, and D group customers. Otherwise they go to regular local bars for eye-candy and attention..[/QUOTE]