One area to change about your food & beverage business that may boost profits

Operators frequently forget that any restaurant, bar or club in Hong Kong that sells liquor can always apply to change any “conditions” imposed on liquor sale : as long as the correct environment exists.

Premises that look “closed” are not doing well these days.

Some operators have, over the years and recently, given the hard times the industry has faced, agreed to limiting conditions being imposed : without fully considering the long term impact of them on business as Hong Kong now hopefully stages a recovery in terms of the sector.

When it comes to conditions what is unnecessary or an inappropriate limit and why would there be any limits to begin with?

Here are some typical limiting conditions that might be changed in a positive way for any business seeking to improve sales and boost profits; related not only to liquor sale but possibly in general. A less time limited location can hope to attract new customers, perhaps it can open up frontages, create a more welcoming environment and provide background music much later etc. All of this may translate to more sales and more profits via a more vibrant business. 

Sales hours limits

Liquor sales hours may be increased, depending on the location and type of premises or the way its is built. Sometimes this will require practical structural changes to plans and even staffing adjustments to achieve : but it is not impossible to “win” increased liquor selling hours; via well reasoned applications.

Drinking up times

“No consumption on the premises” time limits may be lengthened if they are not aligned with the neighborhood or the needs of the business; again it is allows location specific and type of trade related.

Capacity of customers and staff on the premises

Capacity of a licenced premises is sometimes limited and these numbers may be increased, via technical changes. Whilst this is a very complex process and only suitable for some locations, customer numbers may be increased by over 20% or more in some cases.

Opening up to the world: 

Doors and windows closing hours may be extended and an open frontage is certainly welcoming in the cooler months of Hong Kong from October to January; at the very least being “open for business” sends a positive message.  A closed frontage is the opposite unless “by design”.

Entertainment & Music:

Music or live band times or hours limits may be increased, if time cut-off times are imposed. The local environment and the type or location of any premises will be vital in this as if the premises is inappropriate from the outset; it may be an impossible task to achieve change. 

Right time and right place

If a premises is in the wrong location for a business style it can be very hard to change conditions much which makes full evaluation pre-leasing vital. 

Selecting a quiet residential street to build a ground floor, late night live music venue would not be wise; however any one of the above changes would almost certainly improve sales turnover (immediately), increase business flexibility and profitability. A premises does need to be selected that has prospects for more welcoming and profitable licensing if being newly opened via a detailed (regulatory) pre-leasing exercise.

What about landlords?

Changes like those mentioned will also improve the value of a commercial property for an owner and mean different or higher paying tenants; increasing yields and better use of the property.  A tenant could always consider asking an owner/landlord to assist in the cost of applying for changes as the property owner can ultimately benefit from the success of any tenant (see post on turnover rents Link).

Landlords should now be backing F&B tenants to apply for possible changes which will be mutually beneficial as this is one area of mutual benefit.

 … I don’t know why it’s not happening more.

#LiquorLicense #BusinessConditions #HongKongHospitality #SalesOptimization #FandBIndustry #LicenseApplication #BusinessFlexibility #EntertainmentVenue #CommercialProperty #LandlordTenantCollaboration