This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. We're thrilled today to be joined by a brilliant entrepreneur who's had an amazing career in the hospitality sector, is going to talk to us today about a new business that he's founded and tell us about Got a Guy Hospitality. Jason Velzethal, thank you so much for joining us. Can you take a moment and introduce yourself and talk to us about Got a Guy Hospitality? Yeah, of course. I've always been in the hospitality industry, but it's really the only job that I ever had. Growing up, I grew up in a suburb of Chicago called Highland Park. Fortunately, I lived in front of this wonderful outdoor music venue called Ravinea Festival where they play all these cool concerts. I'd go to bed listening to Gordon Lightfoot singing the wreck of Edmund Fitzgerald or Peter Paul and Mary singing Puff the Magic Dragon. Because of that, when I was younger, that was my first job in the hospitality, I went for a come-to-leavey, and I would sell dove bars and hot dogs. Then when I went to college, my first job was in a bar managing a local watering hole at Champaign, Illinois called Cam's in a place called Bub's, when I was 19 years old. They gave me a key to a bar when you were 19. Then throughout my career, I've luckily been able to partly add that into being general managers and director of operations and eventually managing partners of high-end restaurant groups where some of our years we'd be grossing in the 50 to 75 million dollar range for some of these hospitality groups. I was getting a little older and realizing that managing or being on the floor was only going to last me so long. I had this idea through people reaching out to me in one sense or another, asking me if I could provide them with a plumber or provide them with a liquor attorney. Fortunately, I've also throughout my career opened up 25 restaurants over the last 25 years-ish. So I got to understand the contracting part as well as the operation part, as well as the marketing part, as well as the design part and be able to match that together. So over the last few years, I get a phone call if you have a plumber, you have a web developer, you have a guy, but I never thought about monetizing that. So I had a call from a very large restaurant entrepreneur who probably owned close to 50 places in the city of Chicago when he needed a plumber. I said, hey, well, that's going to cost you. He laughed and hung up the phone. I'm like, why couldn't it cost them? Why couldn't I find a great connection between bars and restaurants, hospital groups, and service providers, suppliers, and vendors? I would always say, I got a guy. I came up with this idea, this website that's running between app called got a guyforhospitality.com, where it connects you directly for service providers, vendors, and suppliers that specify and especially work with bars and restaurants. And so for bars and restaurants, it provides you with faster fixes, vetted trusted service providers, and it'll save you money because it's going to save you time. And for the vendors, you get you right in front of bars and restaurants and hotels and chains where they wouldn't because they don't normally market themselves. It's free for the bars and restaurants. It's $199 a month for the service providers, suppliers, and contractors. And we're going to start it in Chicago because that's where I'm from, and then hopefully take it national or international. And truly the goal is to get enough vendors, companies, farmers, et cetera, that want to be a part of this and then to make sure they're getting enough business from it that more than makes sense. It's trying to connect those two bars, restaurants, with those providers and be able to connect them and make that happen. And particularly for, does it differ if it's like, if you're a large operator, like a leafy type operator, like leave your restaurants, et cetera, they might have a whole team internally for procurement and so forth. But a small midsize restaurant bar doesn't have a whole team and doesn't have a whole staff and thus more needing of the service to get them to the right people at the right time. Right. Leavey probably wasn't, was never intended to be part of our business model because they have the majority of that stuff and a lot of, they have contractors and they have plumbers on staff. But the majority of bars and restaurants out there struggle. And there's a couple cool aspects for the bars and restaurants that we're giving for free. One is I'm putting my pre-opening checklist on the site for everyone to have. So there's about 733 things you need to do in order to open up a bar correctly. About 150 to 200 of them are actually finding service providers, suppliers and vendors from liquor vendors to who's going to build out your coolers, who's going to put in a review, who's going to do your low voltage. Also, there's a compliance aspect to this that I thought that I, when I started this, I kind of morphed into this. And this could be a whole different website in itself. I'm just giving it for free. As I'm sitting at one of my clients, I'm also a consultant, so sitting on my clients and looking at their wall, they have all their licenses up on the wall because you need to provide licenses when certain building officials come in to check on your licenses. Well, a lot of the time you lose one or you don't know when it's up. Well, we have a compliance aspect to it where you can put in all of your licenses, all your certificates on our site, and we will, and you can opt in and we will text you or email you when your licenses do. Also, we have a preventive maintenance schedule for you that you can opt into. So think about the bar and restaurant world usually, and this is just from experience, fixes something when it breaks or when you have a flood or your air conditioning doesn't is working. Well, most of those things could be prevented. The problem is not many people are preventing it. So if I could tell you that typically in a bar and restaurant industry, you should be at 4% in maintenance fees, preventive maintenance fees, when if you're at 8 to 12, which most people are, you're losing between 4% and 8% in your bottom line. If I tell you, hey, I'll, I'll let you know when this, when this is due for you, call the company that will be on our site to fix this or prevent this and you'll save 8% plus you'll save time. Isn't it a win for everyone? Now, I don't think like you mentioned earlier, I don't think the problem will be to sign up vendors or sign up bars and restaurants. I think the what are what we're going to have to really contradict on is getting the bars and restaurants to use the site, the signing up is easy. Right. And how much of that will take you hustling, constantly communicating, you constantly working with them to make sure that that happens, that people actually use the site, get connected to these vendors, because people will be happy to put their 200 bucks a month up there, as long as you're getting business from it, but they got to get business from it. So how, how important is that, that ability to, you know, make sure that you're constantly connecting the two? It's funny that you mentioned it because I had that conversation today with my other business partner. I create, there's a 50 point plan. You know, we were talking about a company in a random, let's say Lombard, Illinois, a random city that's about, a random town is about, you know, 45 to an hour outside of Chicago. And it's a, it's a, let's just say it's a Mediterranean restaurant. How am I going to, if I were to say, I'm going to post Instagram ads and, and, and Facebook ads and Google ads, that restaurant tour probably will never go to it. It's not on Instagram looking at, looking for this. So you have to, you have a 50 point plan of attack to hit every single type of that version. That guy may just, it might be very easy, you know, to just make that phone call and remind it. And if he's on the site, we have, we, we, we work with a company that, that it's called Trilio that SMS, Texas people to let them know, Hey, you're live, we're live. Hey, remind you of this. But a company that is in Chicago, you know, may, may be attracted to events, you know, where I can bring people together. They might, they might be attracted to LinkedIn. They might be attracted to the Facebook ads. You know, one of the cool functions of our site is our SEO programming. So if the goal is, if you Google Plummer in Chicago, well, the Plummer in Chicago won't pop up, but we will. And talk a little bit about what are some of the trends that you watch currently in the hospitality business, the barn restaurant business. I mean, it seems like the winners are doing good. It seems like there's some challenges and margins in some place. What are some of the trends that you're watching currently? Well, less people are going out. That's just, that's just a fact, but they're going to the same places over and over again, if the hospitality is good. So they, so they pick and, and they go with people that are, I don't want to call, I don't want to use the word tribalism, but it's gotten to a point where if I'm going to go out with a friend and I want to go out and, and, and drink espresso martinis, I'm going to find someone that also enjoys espresso martinis and go to a place that serves espresso martinis. So it's becoming, it's becoming much more niche. And so, and so you have to kind of understand how important it is to not only find new business, but make sure the business that's coming in is treated the best way. It's always the word hospitality gets thrown around, thrown around a lot, but that's, that's the majority of what's happening right now is making sure that the people that are coming in are coming in over and over and over again, because they're starting because they're picking places that they want, that they frequent more. And by frequenting more, I'm talking about twice a month and I'm not talking about every day. And so, and so you have, so you're seeing this trend of less people going out, but they're going out to the same places over and over again. Now I will say this, COVID, wow, it's funny that we're still talking about it because it's six years previous. Those, the people that were of the age of the 18 to 21 year olds during that time, because they weren't socially around other people, they are the ones that are going out less. And they find, they found other alternatives instead of drinking there, you know, because pots, they're using that or they're, or they're, or they're, or they're more healthy and certain things. The younger generation that are in college currently now, they're all going out and they're going out a lot. So I see a trend in the next few years of the hospitality of the food and drinks becoming, getting back to where it was post COVID. Those are the two, those are the two biggest trends I see. The other trend, which is why this, this, this guy, guy, I believe is going to work is the, is the same idea of finding comfortable, comfortability in, in the people that you use and not getting gouged on the margins. If you, if you don't have as many customers or guests coming out, you need to find savings in another way. Well, this, this website app will be able to provide that for you. So those are kind of what, that's kind of what I've been seeing lately. Love it. And as you're building the business, what are you most focused on currently and, and, and, and how will you work towards, what are you most focused and excited about currently as you really get this going and driving? Well, I think that, that if in the, in the lamest terms ever, this is an Angie's list for bars and restaurants. It's an aggregate to get two groups to work together. And I think for me, the most exciting part about it is that I've been there before. So I understand the struggles and the Agita that comes with opening a bar up every day. And I understand the fire that you have, that you have to put out on a daily basis. And if I can, if I could help one restaurant not have to put out a fire in a day, I feel good about that. And if I can help, if I can have one, on the other side of it, you know, I've worked with independent contractors, vendors, suppliers every day too. And if I can find one person, a client that they wouldn't have had, that feels good. Because, you know, it's, I think the idea of, of doing something that makes you feel good in business is very important too. I love that. And talk a bit about when you look at operators, bar and restaurant owners, hospitality owners that are thriving versus those that are struggling or just surviving. What's the difference between those that are really doing pretty well versus those that are really struggling? Well, I think there's two really important points to that. One is that if you're an independent bar restaurant owner and you have one location, you need to be extremely hands on. It has to be your focus. If it's not your focus and you have someone else that's doing the job for you, the expectation that you're going to be successful is very hard. Now, for the mid-range bar and restaurants, you got to get a good team. If you, you have to surround yourself with, with people that, that have the exact same mindset that you do. And that's hard. Hospitality is a hard business to be successful in. It's also, it's also a hard best to, to find great help or great partners. And it's also hard because your margins are slim in a, in a, in a perfect bar restaurant world. If you can get double digits in the black and profit, you're successful. And so if you're doing $3 million in business on an average and you're profiting $600,000, that's great. And so, and so it, you know, if you're profiting, you know, $300,000 on $3 million, that's, that's not horrible. And so, and so it's, it's very hard to always grasp that. And so you got to be really good at understanding what your profit loss statement show you on a monthly basis. I don't almost venture to say you should be reading it. It's hard on a weekly basis to be able to forecast what your next three or four weeks are going to be. There is so much loss between your food, your liquor, your payroll on a weekly basis. If you're not paying attention to that consistently, you're going to lose those percentage points on the bottom line on a, on a, on a weekly basis. And if that happens, then how much are you losing on a monthly basis and how much are you losing on a quarterly basis and how much are you losing on a yearly basis. And so that to me is, is, is where the independent restaurant owner sometimes fails at. And what other, are there other mistakes, common mistakes that you see founders or operators make when trying to grow out their hospitality business, their bar, their restaurant? What are a couple of the common mistakes you see? And we talked a little bit about people that don't watch the numbers closely. You got to watch your team and build a great team quite closely. What else do you see people make that are, that are mistakes or things you see people do really well? Well, I'll say the one thing that if you're opening up a bar, if you're like, if you're actually opening up something, the one mistake you make is being underfunded. That is the number one mistake. And I'll say that I say that to anyone I talk to, when someone's trying to open up a location is do not underfund yourself and do not take out money from your operating openings to pay back your contractor that already built out your bar. So, so always have contingency, always have extra money in your operating account to be able to, because you're always going to be 20% over whatever it is you think you're going to spend no matter what. That's for opening. For, for when you're open is understand the hours that it takes to build your business. And then also understand when you're busy, where, when you can maximize your profits. It's hard to be busy at two o'clock in the afternoon if you're not a lunch restaurant. Why are you open? But if you know that you're busy between 10 o'clock at night and two o'clock in the morning, maximize those profits. It's easier to go from $10,000 an hour, from $10,000 to $14,000 an hour than it is to go from $100 on an hour to $500 an hour. So, understand- I mean, that's, that's really true, isn't it? I mean, you're far better off doubling down your key hours, your key people, your key customers than trying to make something out of nothing that's a very challenging time to begin with in your business. Yep. And, and, and, and, and think about the amount of effort you have to put in on those two things too. Everyone's like, Hey, let's open up for lunch. Let's open up for brunch. Great. Okay. You know, what's effort you have to put into that if you don't know how to do it right, as opposed to keying in on what you're already good at and, and, and adding more dollars on what, on, on what we know what you're good at. You know, it's all, it's the idea of the pass through method, right? You know, if you're passing through things and you don't have to spend anything, but, but you're making more money on it, well, that's just a pass through. If you have to spend money to make a lot of money or to make any money and you're spending more to make a little, that doesn't seem like a very good business model to me. 100%. Do you want to double down on what's going great to where you already have a base of business? You know, 100%, just like you and doing this, you're doubling down on an area that you already know, but a lot of the bars, a lot of the restaurants and also a lot of the vendors, a lot of people that, that take care of those people. So you're, you're really doubling down on an area that you really know already. Talk for a second. If you don't mind Jason about it. Well, let me ask you one question. There's this discussion about alcohol consumption going down in the country, at least by a handful of percent. What does that mean for bars? Does that have any impact on bars and restaurants? Absolutely. It's, you know, think about the margins between a bottle of tequila and a pound of meat. If you operate at 30% for your food costs, that's pretty average in the industry. You know, if you can get down to 25%, 26%, it's great. In liquor, if you can, if you know, liquor specifically not wine or beer, you can get to 10%. You can get to 9%, 8%. If you charge, if your bottle of Tito's costs 20 to six bucks and you're charging $18 for a drink, that's a great margin. And you get 30 drinks out of that bottle. It's a fantastic margin. And if people are drinking less, they're spending, they're not spending $18 on a Tito's or not getting the third Tito's or they're not coming in, you're losing a big, a big chunk of your, of your business. You're certainly losing a big chunk of your profit because the profits clearly, clearly skews to your, you know, to your liquor wine and beer sales. So you have to think of innovative ways to get to, to have people come out, you know, happy hour specials or lowering your prices or creating really cool, especially cocktails or really cool vessels that people, that people are drinking in. So you have to come up with, with innovative ways why people will, will, will come to you as opposed to the other, the place that's sitting next door to you, especially in a big city like Chicago, when every corner has a bar or restaurant. Right. Exactly. Exactly. You got to really make sure your destination, there's a reason to go to. So let me ask you another question. And again, you don't have to answer this. If this is not, well, ask you a couple of different questions. I'm an open buck. Yeah. No, no, but this, this, you'll just let us know. Are there bars and restaurants that you spend more time at than others that are your favorite go-to places? Do you have a couple places that are your go-to places? And you don't have to answer that. If everybody's a potential customer, you don't want to offend anybody, but is there any place that you just love that you spend a lot of time in as a bar restaurant? I have no problem giving you names of places that I, that I've worked with or for, for the last, you know, 20 years, you know, currently I'm sitting in a, in a place called Gigi's piano bar. It's a, it's a, I, I've also, like, I'm also a consultant. So this is one of my consultant projects. And we built an awesome piano bar and in the West Loop of Chicago. And I love it. I, I, I love the, I love the camaraderie of being able to sit and listen to someone playing the piano and everyone singing along to, you know, sweet Caroline or tiny dancer. I tend to morph to places where there are, where there's energy and, and where there's a sense of camaraderie that we're all doing things together. So like, you know, I, I, I love going into sporting events. So we own a bar across the street from Wrigley Field called HFAC that does live music as well that I, that I would go to, you know, as a hospitality company that we own. I love the frequent cocktail lounge that has great drinks called Hubbard Inn. You know, those are just to name a few. I love just, I love just going to, to a sports bar and watching, you know, and watching the, the, you know, I also DJ as well. And I went to the University of Illinois, you know, going through, going through a bar in Lincoln Park called Parley Lincoln Park and watching the Illinois basketball team make the final four and everyone's wearing their orange and blue. And we're just sitting there all cheering and, you know, from all walks of life because you graduated from, from like, I love the idea of everyone creating energy and, and, and, and because of that, the staff picks up on it too. So it's a give and take. It's much like going to a concert and seeing your favorite band performing and, and the crowd eating it up. To me, it's the same energy when you go to a bar and you're all, and you're all collectively doing the same type of thing. And maybe it's just ordering, you know, a shot at Jamison or watching your, your local sports team. But to me, those, those are the places that, that I tend to go to because I love that, I love that crowd support. Like the piano bar, like we're just going on together, like the old pay to your Brian's type thing where everybody's together doing the same thing. Like, or at the ballpark, so we can sweet Caroline in Boston, whatever it might be. It's fantastic. That battle, battle, Brian's is one of my favorite places in the world to go to. You sit there and, you know, and you're having yourself a hurricane or for hours and you don't even realize you've been there for four hours. And when you finally stand up, you're like, whoa, you know, I forgot that I was there for four hours. No, it just is literally fantastic. So Jason, fantastic what you're building. I'm also a U of I fan and graduate. So a huge fan of the British Illinois. I was thrilled to make the final four. Others say, oh my goodness, it's not a victory unless you went the whole thing. I can't tell you excited was to see the years of Illinois do this well this year. I also spent, I didn't work there, but I spent my fair share of time at CAMHS back in the day when it was on, you know, I think it was Daniel Street, but it was back in the day as good as it gets. Jason, I want to thank you for joining us. Jason Felsenthal, a tremendous entrepreneur and leader, hospitality guru, founder of God a Guy Hospitality. Just unbelievable what you're doing. Thank you so much for taking the time to join us today on the Becker business and the Becker private equity podcast. Appreciate you guys. Thanks for taking the time for me.
