When five 20-something guys get together, it can be expected they'll be up to no good. But not the chaps who own the new Broome Hotel Group – they built a small empire of “small big pubs” instead.
Chris Lane, 29, started up Small Bar in Sydney on the back of new liquor licenses. But he did not always go there when he wanted a drink. Instead he went to the pub across the road from his house – the Northbridge Hotel.
Its owner, Michael Broome, 27, had secretly coveted Lane's small bar success. So, after eyeing up one another's establishments, they brought their pubs and bars together last month.
Lane's original partner wanted to leave the business and Lane found himself a new partner in Broome.
Broome had mortgaged his house in 2010 to buy the Northbridge. He added The Fringe Bar to his portfolio in November last year and The Lybrary in Chippendale in April.
Two Small Bars, in the city and at Crows Nest, and the three other pubs form the new Broome Hotel Group, with Broome, Lane, Broome's younger brother, Jonathon, 23, Steve Krowitz, 27 and Patrick Yeoland, 24 as owners.
“I was looking to get into the small bar scene," says Broome. "What better way to do it than to join up with someone who has already done it."
Lane says joining their pubs give them "more resources and more purchasing power".
Over the past few months, the group has built restaurants in place of pokies at the three bigger pubs, and given them a small bar flavour by sprucing up their food and wine.
The Northbridge Hotel has a new intimate restaurant with its own beer garden. The Fringe Bar is becoming more than a Friday night venue with a proposed wine bar in the basement. The two Small Bars add patronage to the entire group with their sharp wine lists.
“It is the notion of big and small," Lane says. "Our pubs can be big, but they can also be small."
Says Broome: “We are taking the small bar leanings into the pub scene. We will retain the sports TVs, but at the back of our pubs is always a lovely restaurant with good wines."
The group says this marketing recipe has worked because women are coming into the pubs more often, and as Broome says, “Wives and husbands don't bicker about going to the pub anymore; they go together.”
Yeoland says, “Men wonder if they have lost their 'man cave'. Not at all, there are now more women in the pub!”
Five energetic men running the pubs may have something to do with that phenomenon. “It helps when we throw in a flirty attitude or two,” Yeoland says.
The group has a motto, “For the locals, by the locals.”
“Our aim is to adapt the pub to the area, for example, the food and wine must meet the locals' needs and budgets,” Broome says.
The five owners work hard on their own renovations as well as some plumbing and cabling. “When we first started we put in 80-hour weeks, worked 20 days straight and double shifts back to back,” Krowitz says.
As for management meetings, the boys hold them round the clock because as well as working together, four of them live together.
The key factors of their success are sound financial management and market knowledge.
“It's all about meeting key performance indicators (KPIs) and sticking with it," Broome says. "We currently make about 25 to 30 per cent profit after expenses."
But they don't expect the road ahead to be always easy. Broome says finding good chefs will be a challenge. Lane thinks external forces such as another GFC could create problems.
“If people cut discretionary spends and get a $30 bottle of wine instead of a $50 one, it could hurt,” he says.
Broome says, “There is no foolproof method but we will cushion our business with sound budgeting.”
As for the future, Lane says, “We are not on an acquisition trail. We don't want a big corporate mentality. We will keep growing, but if adding one more venue will tip us into a mega company we would rather avoid it. We would prefer just five venues that we love running.
“We want to start a trend of pubs which have good restaurants and shift the mentality that pubs are all about pokies.”