Scotty’s Bar and Grill in the Spokane Valley had legs but then they broke

Posted: April 28, 2011 in advice on owning a bar, Closing Business in Spokane Valley, Opening Business in Spokane Valley, Spokane Valley Bars
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I often wonder how places can keep their doors open when it is obvious they are not making a profit. Scotty’s, which closed a few weeks ago on Argonne appeared to be doing better than some that continue to defy gravity. Many years ago I stopped trying to figure Scotty’s out. To me it did not seem to be a big enough place to turn enough tables to make it a profitable venture. Since it seemed to stay fairly consistent through the years, I just figured the owner had other sources of income and the business was at least paying it’s own way.
Given that the doors were finally closed with the owner reportedly in debt, chances are that the place never did make a profit in all the years (around 8, I think) it was open. It would surely shock anyone who has never owned a small business how many small businesses operate without the benefit of a profit. In the restaurant/bar industry it is probably realistic to say that more small independents are not making a profit than are.
But that seems to be impossible for people to grasp. I have watched over and over again as someone threw their lifesavings at a venture with odds far greater for failure than success. I talked to the guy who came into the Plantation right after we had been kicked out. I assured him that he needed to have enough money put aside to get through a year or two of no profit. He looked at me like I was crazy and said he planned on making money from the day he opened. He was obviously mistaken because he only lasted 6 months.
We were still at the Rock Inn when Scotty’s opened and I remember wondering why would they spend $250,000 to remodel the old Wolfy’s so that they could give the Valley another watering hole and themselves a money pit. I guess they were just dying to play the game. I have a very strong feeling their initial investment was never recouped.

Now I see where someone is going to open an Oriental buffet at the old Mojo location behind Shari’s on Sullivan. I also heard the owners of the fitness center behind Owens Auction are planning to put in a sports bar in the strip mall between them and the auction’s space. That one so far is hearsay but the Oriental place is taking place for sure. The sports bar will likely come to fruition because it seems like such a fun business to be in.
They should talk to a friend of mine who bought into the industry at a well known Valley location not long ago. There he is tied to a long term lease with thousands of his savings sunk into a building he doesn’t own. “What was I thinking?” he said. “I would love to have my life back like it was before we got into this.” He can get out of the lease by filing bankruptcy or gut it out for another 8 years or so like Scotty’s did. Either way, his money and life as he knew it are long gone.

Comments
  1. Michael Cosentino says:

    It never ceases to amaze me when people go into business driven by a desire to be a succesful business owner without enough capital to weather at least one year of startup cost.
    They have an overall idea of how they plan to market the business but are lacking a well defined business model focused on specializing and capturing a specific segment of that market.
    Owners quickly become frustrated and loose sight of what it was they originaly set out to accomplish. And it’s downhill from there.
    Seven out of ten new employer establishments survive at least two years and 51 percent survive at least five years.

    Michael Cosentino
    Direct Point management

    • I doubt the percentage is that high in the hospitallity biz, especially the nightclub gig. I agree with what your saying, but I think it is more dismal than that. Survival just means keeping your doors open. I would tell anyone looking to get into it to do it for the fun not the money, because it can be a lot of fun with very little money.

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