Manchester Pub: Growing Small Business with Craft Beer, Wings

While many people might fantasize about owning their own restaurant or bar, few actually do it -- and fewer still do it successfully. About four years ago, Lawrence Chan and Hudson Tang took a chance and purchased struggling Manchester Pub in New York City; today it's filled with regulars and makes enough money to be profitable. Now Chan and Tang are looking to grow business beyond its walls.

From finance to tavern

The Saturday after Thanksgiving in 2007, Chan was entering the subway when his former high school mate Tang called from a ski lift in Salt Lake City. “He said, ‘remember that bar we were in? They’re selling it, and this is what they’re selling it for,’” says Lawrence. “And I said, ‘I’m in.’”

The current owners were struggling and didn’t want to do it anymore, says Chan. “They were looking for someone who could keep spirit of Manchester, who appreciated the bar for what it was worth.”

Chan and Tang were only 27 when the transaction closed a little over a year later. Chan was working as an M&A banker at Mitsubishi UFJ Securities. Tang was in mortgage finance at a start-up investment fund, Gold Creek Capital Management. Within two years, owning the Manchester would be both of their full-time jobs.

It matters what's on tap

It’s never been lost on Chan and Tang that they bought Manchester during what Chan calls “the craft-beer explosion in New York City.” Twelve of the 16 beers Manchester has on tap are craft beers. “People do come in and ask the bartender what’s new today and will have a glass based on that, knowing that we have a good selection,” says Chan.

To get patrons more acquainted, the bar hosts events and specials featuring craft beers, including a “beer dinner” every six weeks or so. Chef Matt Garelick, Sous Chef at Wall and Water Restaurant, Chef Consultant at Manchester, creates a five-course meal, with each course designed to pair with a different beer from one featured craft brewery. Garelick, in between applause, talks about the food and a representative from the featured brewery discusses each beer.

A better menu

When Tang and Chan bought Manchester, the menu was six pages and read like a diner menu. “I’ve always had the philosophy that, if the menu doesn’t read on one page, it’s not focused enough, and I don’t know what’s good on the menu,” Chan says. Fixing that also lowered their food costs.

“We never wanted to do typical bar food, but we were all about signature dishes and what would make you come back,” he says. In the menu iterations that followed, they focused on making traditional staples -- such as such as chicken wings, fish and chips, and chicken and waffles -- more interesting.

Inspired by the annual Buffalo Chicken Wing Festival in Buffalo, New York, and disappointed by the lack of good wings in New York City, Tang and Chan took a particular interest in perfecting what is now the most popular item on the menu. They credit the festival as the inspiration behind their Hawg Wings, BBQ pork shanks braised until tender then grilled and glazed in their house BBQ sauce.

Regulars

Chan and Tang say consider “the competition” to be any other way someone might spend their discretionary $20. “We’re not just competing with bars, we’re competing against going out for a movie or a cheap meal at Subway – and we’re not just competing on food and beer, but also for the experience,” Chan says.

Especially as the recession took hold, Manchester aimed to be “the best inexpensive meal and drink in the area, so customers would come back, “ he says. “I think we were successful at that.“

They took several approaches to attracting regulars. One of the most obvious is that the pub was called Manchester, and yet the previous owners didn’t own a soccer package or open early for the games. So they changed that.

“It’s very easy to be a soccer bar when Manchester United is playing Real Madrid or Chelsea, and you will be packed, but what separates you as true soccer pub is opening early for the other games,” says Chan, that commitment slowly but surely developed one crowd of regulars.

In addition to the regular crowd, the Manchester team puts a lot of emphasis on bringing in new customers and making them feel welcome. Social media plays a big part. If you tweet to Manchester, you will get not only a response but possibly a free drink and a handshake from the owner.

But Chan, the social “voice” of Manchester, prides himself on going further than Facebook and Twitter, reaching out directly by email and phone calls – and when people host an event at Manchester, he’s there to meet them in person.

Tang and Chan split duties somewhat uniquely -- Chan handles community outreach, marketing, and event planning, while Tang handles accounting, purchasing and payroll.

Margins and investments

A stern warning for would-be pub owners: it takes time. “My single best piece of advice is ‘your Excel model does not translate into making money’,” says Tang. “If you believe you are going to come out and make money off the bat … your model is wrong.”

With a few years under their belt and operating at a profit, now they are putting a growing trove of data to use to improve margins. “We take advantage of a point of sale database, looking to the data to find when our sales are coming, what they are, and when we could do better,” Chan says.

Being prepared to invest goes a long way. For instance, when Tang and Chan first bought Manchester, they hired a chef consultant who said one piece of refrigeration was not up to par, and if they bought a new one, it would significantly improve kitchen operations. That particular piece of equipment ended up being around $5,000.

“It’s an investment you have to make, but you also want to go out of your way and pick one that works for the whole team,” says Chan. “You shouldn’t look at these as straight costs, but try to seek growth from them; these are investments you’re making – each television you put in, each little bit of sound system.”

Chan recommends that anyone considering such a venture should add as much as $20,000 to $30,000 extra in unexpected costs for equipment, adherence to new regulations, etc., to their annual projections.

“Will the quality of food improve, will the experience improve?” If the answer is yes, Chan says, “You should be more than happy to invest in it.” Now Chan and Tang are exploring a second location and looking to grow a secondary catering business.