Always open with a joke, especially if it's a poop joke:
A guy walks into a bar and starts chatting with the manager. Suddenly the manager gets a radio call and says, "I gotta go, someone's poopin' on the sidewalk".
One of our regular local homeless crazies had gotten his hands on a framed painting of some kind. After running around in the street and harassing people for a while, he set the painting down in the middle of the street, took off his pants and squatted over it while cars honked and maneuvered around him. He could not be dissuated from this course of action -- everyone's a critic. Eventually, he completed the act.
After some time the cops showed up, and they said, "What do you call that?"
(Pause for applause.)
A little while ago, Barry and I happened to look at one of our calendar listings from a month in the early 'aughts, and we were struck by how few days we were open. For those first several years, we were open on average about 3 nights a week. It was pretty much every Saturday and most (but not all) Thursdays and Fridays, and a smattering of mid-week events. These days, we average 8 or 9 events per week, counting both rooms. We looked at that old calendar and said, "How the hell were we able to stay open??" Well, the answer is, we were losing money even back then. But not nearly as much as today! And we're also doing so much more business now -- and yet we're losing even more. How's that possible?
It's not just a "lose money on every sale but make it up in volume" situation. It's much simpler (and more annoying) than that.
Math time! Vague and highly approximate math!
Since those early years, our rent has gone up by around 2.5× and our insurance has gone up by around 4×. (That's counting only the main club side, and totally ignoring the rent due to DNA Pizza and Above DNA.) Minimum wage has gone from $9 to $15, plus now we have to cover medical benefits for all of our employees which we didn't before (which makes for an effective current minimum wage of more like $16.90).
Meanwhile, ticket prices have stayed pretty much exactly the same. Seventeen years later, people still expect small live shows to cost $8 to $12, and large live shows to be $15 to $18, or maybe $20 for a show that's going to sell out early. Big dance parties remain in the $12 to $20 range. People just won't pay more. Drink prices also have not kept pace with expenses, or even with inflation: I think our prices have only gone up by a couple bucks since then. A drink that cost $7 in 2001 still only costs $9 today.
Over that period, compounded inflation comes to 42%. That means that what you can buy for $1 today, you could get for 70¢ in 2001. If you were paying exactly the same price for it, that $18 ticket in 2001 should cost you almost $26 today.
In other words, the real cost of a drink or a concert ticket has actually gone down. Today's drink prices are 10% cheaper, and today's concert prices are 30% cheaper. What a bargain.
So we've tripled the number of events we do; and we now often do 18+ and all ages shows, which greatly increases the number of potential customers; and yet we're hemorrhaging even harder than before.
That's what happens when your cost of doing business increases by 3× or 4× but your income stays stable or decreases, even while you're moving 3× as much product! You have to run so, so much faster just to stand still.
By the way, just to fend off the Libertarians: I am completely in favor of everyone having healthcare. I think it should be considered a basic human right. But it sure would be nice if I didn't have to pay for the whole thing myself. Like, if we could maybe tax a billionaire or two?
Likewise, I'm in favor of people being paid a living wage for their work, but it's not like we have the option of saying, "Welp, our rent is crazypants, so now our cocktails are $25 and our weekend dance parties are $45. Hey wait, where are you going?" So the always-correct Invisible Hand of the Free Market is telling us, "Your product is not economical, therefore night clubs should not exist".
Or should be loss leaders for vertically-integrated multinational artist management cartels.
Everything is terrible, is what I'm saying. Join our Patreon.