But What Could The Problem Be?

Warehouse district “geek” bar Byte is closing next week after eight months in business.

And while restaurants and bars come and go fast, Byte had one feature that drew especial attention; they built their business model around a $15/hour minimum wage from the ground up.

And kudos to a company who does what they think is the right thing.  More power to ’em.

Problem is, they needed that “more power” more than they thought:

“While we have enjoyed a steady and loyal customer base, we’ve also struggled with getting the volume necessary to make our business model fiscally viable in this location,” the post said… [Co-founder Travis] Shaw told the Business Journal in Decemberthat the inspiration for Byte sprouted from their frustration of a majority of restaurant employees not being able to earn a livable wage. Byte hired around a dozen employees, each one making $15 an hour with benefits, plus vacation time.

“This was what motivated us to start out on our own,” Shaw said. “I’m passionate about food, but more passionate about the system and a business that can sustain its workers.”

Well, I guess your workers are going to have to “sustain” themselves, now, aren’t they?

10 thoughts on “But What Could The Problem Be?

  1. I’m guessing their short tenure is the result of being unable to get a line of credit. No bank is going to go into business with a company whose only asset is misguided altruism.

  2. Their business plan for the loan application:

    1. Pay employees so much that our drinks cost more than our competitors.

    2. ?

    3. Profit!

  3. struggled with getting the volume necessary to make our business model fiscally viable in this location

    You see, gents, the problem is location. not the business model.

  4. I think Swiftee has a point, but at a certain point, I think the owners should have simply shown the cost and revenue structure, and said “Ladies and Gentlemen, here are our choices; back to $10/hour without medical benefits or unemployment. Your choice.”

    Or, maybe they did.

  5. Looking at their facebook page the place appears pretty small. So if they were to pay $15/hr + medical benefits + ? they’d have needed a ton of volume. I also noticed they were closed on Sundays, doesn’t make much sense to me. They probably should’ve never opened the doors to begin with.

  6. If a city is going to force up compensation in any way by law, why don’t they just take it out of property taxes? Saying a new wage structure / business model will work by city council fiat is obviously idiotic.

  7. So I guess these fellows thought that other bar/restaurants paid less than $15/hr because they were mean?
    Keeping a place like this open for 8 months probably cost around $250k — $500k. I wonder who had the deep pockets & how they were sold on the idea? To make money in the restaurant business you have to do everything right. One mistake in product, location, or business practice can kill you.

  8. Good point, MP. It makes me wonder how exactly a guy can accumulate the money needed to do this kind of thing without being able to figure out whether a business plan is tenable or not. Like Aesop said, a fool and his money are soon parted.

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