Hi, we are here with the co-founder of Timeless Lounge Bar. As we outlined in the previous article, the forced renaming brought challenges but also benefits. We are now opening a second location with a new official name, and we are doing so with peace of mind.

The second Timeless is going to be twice as big—320 m². And twice as expensive: we have attracted investments of 40 mln rubles for the opening. Let me start with the topic that everyone loves: Where have we got the money from, and why do we need so much?

Where the money came from

As soon as we opened our first location, we immediately started looking for new investments. We avoided the obvious approaches: conferences, letters, or awkward elevator pitches. Instead, we just kept talking about our idea to everyone we knew. We relied on our extensive network from the business world, using the connections my partner Dima and I had built up over time.

When we first started out, we had this idea: after we opened the first Timeless, we invited our friends and everybody we knew to come by and talk about the concept in a relaxing atmosphere.

We didn’t have any presentations—we were looking for investment in a merely amateurish way, but with passion. We simply explained what we were doing, showed figures, and waited for someone who would like to take part in the project. Such conversations soon turned into a regular working process.

When it became clear to everyone that our lounge bar was a fairly profitable story, we found two investors from the restaurant scene. We won’t disclose the names, but each of the partners invested 50% of the 40 mln rubles we needed from their own funds and also received a 25% share. 40% was left to Dima and me. We gave another 5% each to the director of the chain and the future manager of Timeless 2 for their contribution to the opening of the establishment.

One key point: at both our first and second locations, we’re focused on getting a return on investment. That means we’re not making any money except for our salaries. We’re pulling in 50,000 rubles from each lounge bar.

For anyone thinking about starting their own business, I’d advise digitizing as much as possible before looking for investment. It’s tough for a restaurant or bar business to do this, but we have still managed to calculate the customer retention rate and conversion rate.

So, count everything you can, from how many seats are taken to the average money made each hour for each table. Numbers are the best way to build confidence.

Why are the numbers so high?

We calculated the size of the investment pretty simply.

The first Timeless, which was 162 m², cost us about 111,000 rubles per m². This price included everything: rental deposit, renovation, ventilation, furniture, lighting, technical equipment, marketing costs, and a buffer for the first few months of operation.

We planned to make the second place even more luxurious, so we raised the estimated price per meter to 120,000-130,000 rubles.

With approximately 40 mln rubles on hand, just as when we opened our first lounge, we continue to save money all the time: we help the builders, take out the garbage ourselves, design the project ourselves, refuse the services of contractors as much as possible, and, of course, bargain wherever possible.

I don’t know how much money we need to have to make sure that everyone can afford to not be involved in the process.

Here’s a tip for anyone who might need renovation in the future: when making a basic estimate, pay attention not only to the number of square meters but also to the height of the walls. Higher ceilings require more money for decoration and ventilation. In the new Timeless, the ceilings are 4.5 meters high, while in the old one, they were about 3 meters high. So, we couldn’t exactly match the price of the first place.

How we looked for premises

I once had the chance to write a whole epic about looking for premises in Moscow. Since the opening of the first lounge bar, almost nothing has changed. The commercial real estate market in Moscow is known for being stable and traditional.

Maxim, the director of the chain, and Ramazan, the potential manager, were in charge of finding a place. They are both twenty-three years old, so it might have seemed strange to agents and landlords. Such young guys come in and say they are ready to rent the premises for a million rubles. If I hadn’t had experience, I would have hesitated too.

But the second time was easier because we had a strong selling point: we had a successful business, and the photos and financial reports made it seem trustworthy.

We checked out about 30 places, and it took a month and a half from when we started looking to when we signed the contract—two weeks longer than we had planned.

We were looking for something in the 600,000 to 800,000 rubles range a month.

But in reality, it was either 1.3 mln a month or “It was nice meeting you; ciao!”
In the course of negotiations, they conceded to us on the lease and reduced its value to 1 million roubles. The surprise was the operating payment of 70,000 roubles a month, but we signed a contract for six years. Look for us soon near Mayakovskaya metro, on the site of the former Monet salon.

Here’s a tip for those looking for commercial space: Before you sign a lease, make sure you go through your own checklist:

1. Call all the utilities services and make sure that all the important utilities can actually be run there.
2. Find out if you can get a liquor license.
3. Check with the property owner to see who the neighbors are.
4. Check the town plans for the site and make sure if the building isn’t about to be demolished.
5. If a street is going to be closed or a subway is suddenly being built in the next few months, the business could lose up to 60% of its street traffic in the long run.

Design

We managed to convince the owners to give us a period of 2.5 months rent-free instead of the proposed 30 days, and we even got a bit more. Before signing the lease contract, we started drawing a rough layout of the premises.

About the process. Before we even started looking for the space, we divided all the mandatory parts of the design into conditional blocks and drew them in 3D. Then, we could combine and rearrange them as the space required.

Each area, from the restroom to the staff room, comes with its own estimated cost. Based on the data from the first Timeless, we laid out all the equipment and inventory. The result was a pre-project—a kind of lounge-bar template.

About the design. The first Timeless has a dim light, loft space with a zoned layout, leather, metal, and wood. Everything is in the same color range and style.

For the second facility, we decided to take a step forward and give each of the 18 zones its own meaning. This time, we were able to spend more time on the details of each zone based on what they represent.

We found the designers at the end of the process, right when they were dismantling everything. They took our catalogs and positioned the furniture, drew up layouts for electricity, water supply, and plumbing, calculated the number of outlets and fixtures needed, and designed a plan for building new walls.

The design work cost us around 800,000 rubles, including unexpected expenses like an expert examination to approve the design of external ventilation in a historic building in the center of Moscow.

At first, we looked for a design bureau or agency. But most designers charged too much for a square meter of “turnkey” design, which was from 3,000 to 5,000 rubles per 1 m². Multiply that by 320 of our squares, and the sum is astronomical.

1.5 mln rubles just for a design that has to wait from 50 to 80 working days? And add to that a couple of million in rent for downtime. We couldn’t afford that kind of luxury.

We had a clear idea of the furniture and walls we wanted, and we had 3D designs of all the technical areas. We just didn’t need a “designer” in the traditional sense. We were looking for someone with good taste who could draw quickly and accurately, and we found them.

They charged a pleasant price of 1000 rubles per 1 m². In order to save money, we even refused photorealistic visualization, but if a business has the opportunity, it is better to make it after all. The approximate average check for visualization is 1500 rubles per 1 m², but it all depends on the volume of shots.

The big surprise for us was the noise insulation. There’s a private medical clinic and office space above us, and the ceilings are very thin. Maintaining good relations with our neighbors will cost us 1 mln rubles.

The walls are another big deal in the design. We’ve been dealing with them for a while now, mainly because of the finishing and the complex ventilation system. The installation for the ventilation system was custom-designed for us in Sweden (about 2 mln rubles). It’s hard to save money on the walls. Our ceilings are 4.5 meters high, and finishing materials are expensive. We chose 25 types of them. In the first Timeless, there were only six types.

But the most difficult and time-consuming part of the design project is custom products. They require long approvals, calls, and correspondence. In the process, the number of such items tripled. Now we have about 150 fully customized items: these are paintings, furniture, decorative items, lamps, and even some tableware.

Despite the savings, the dismantling and repairs cost us 9,412,141 rubles.

A tip for those who are thinking about their own business: many aspiring entrepreneurs make the mistake of believing that a current lack of premises directly translates into a lack of work. This is a misconception. It is crucial to methodically plan all technical zones in advance and create 3D (or 2D) designs. Even the most skilled designer will not create a cocktail bar design from scratch, as they lack insight into the necessary elements.

How we looked for furniture

We looked for tables, chairs, cabinets, pictures, and lights the same way we looked for the premises and all the contractors—we made dozens of lists. Our approach to business is based on three pillars: documentation, structuring, and optimization.

One list would sometimes take weeks to make. Finding the right fit is hard. For example, we bought 12 amazing tables before we even found the place so that we could secure them.

We have many American-made originals and authentic pieces that are almost unique. These include a cabinet safe, a table shaped like an old open book, antique armchairs, chandeliers, and lamps of different shapes and sizes. A special place deserves special things.

The main drawback of dealing with rare furniture is that the catalogs aren’t always up to date. You could spend forever picking out a light fixture for one area, make up your mind, call the store, and then find out it’s out of stock or that it’ll take five months to be delivered. It’s a bit of monkey business, but it’s worth it.

1. The total for all the furniture (chairs and tables): 6,471,691 rubles.
2. For light fixtures, it’s 1,333,955 rubles.

Separation of duties

Most of our contractors are really nice people. Sure, we might not always be on the same page when it comes to their prices, deadlines, or quality, but we can always have a good chat about it and figure things out. This is a pretty rare trait in the offline world.

We usually split the work into five parts: I am responsible for the IT component and marketing, my wife and I are in charge of design, Maxim manages the first establishment, Ramazan oversees the construction, procurement of inventory, and production of custom elements, and Dima focuses on engineering, legal, and financial issues.

We all spend about 60-80 hours a week at work. Of course, it’s too much, but we all choose to do it. When you’re really passionate about what you do, you don’t think about sleep and rest. It’s better to feel tired than to pay another month’s rent.

It’s hard to stay totally risk-free while things are growing. I don’t think anyone would easily replace the CTO. That’s why we value each and every team member so much. We all talk to different contractors, and there are about 100 of them on the construction site alone. It would be impossible to handle all those communications alone.

A bit off-topic

From the outside it might seem that our story is like a millennial’s dream come true: complete freedom of action, a desire to open a bar, and 40 mln rubles in your pocket. I might disappoint you. But it’s not that simple. Sometimes I can’t sleep because I’m so tense and anxious, worried that things won’t work out. This is something everyone on the team can relate to.

Everything from picking the place, building it, the design, the furniture, and even our IT system and logistics is on us. It’s a lot. Anyone who’s opened a catering business knows how stressful it is. Everybody on the team has their own daily to-do list, with literally every half hour scheduled: from getting up and having breakfast to business meetings, work tasks, and even going to bed. We try to keep a constant work rhythm (but we all really need a vacation; I can feel it).

Entrepreneurs often consider the most enjoyable part of their work to be choosing furniture and finishes, selecting dishes, making playlists, and “creating an atmosphere” in a place. However, this becomes challenging when there are large volumes. It’s one thing when you have ten elements to choose from, but it’s quite another when you have 100.

For example, to get the perfect decanter for a bar, we call the factory and agree on a limited edition. To buy the necessary cutlery with real gilding not for 30 thousand rubles, as they are sold by resellers, but for only 3, we find a manufacturer in China and order directly from them.

We order 20 forks and 200 dessert spoons to have extras of, since some guests like to take spoons with them.

We’re trying to take all the little things into account, which we didn’t notice in the first lounge bar. Experience helps a lot, and planning helps too; otherwise, we’d all go crazy.

We already knew most of the right stores and contractors who could customize wood, metal, copper, brass, and other materials. We remembered how much they charged and how long they worked for, which made the calculations easier.

We’re always making improvements to our production processes in the hookah bar and cocktail bar, and we pay close attention to every detail. For example, if the bartender doesn’t have the right knife for cutting apples, they’ll cut them more slowly.

If we lose even a little bit of speed and efficiency, it adds up to a lot over time. For example, if we lose 30% of our speed and efficiency, that means we’re doing things more slowly. The solution is simple: just replace the knife, ice maker, and boiler, among other things. It’s the magic of small things.

Results and financial expectations

We plan to pay off the first Timeless in 14-18 months. If we had started with an alcohol license right away (we had five months to survive on beer only), we would have planned to take more time. But for the second lounge bar, we will get a license right away, so we plan to break even within two years.

If we get there faster, great, but this is an optimistic forecast. The most pessimistic version of how things will go is that we’ll get the invested funds back in three years.

Here are the most significant expenses:

1. Rent for three months (including the deposit and maintenance payments): 3,334,761 rubles.
2. Repairs: 9,412,141 rubles.
3. Ventilation: 4,310,800 rubles.
4. Furniture and decor: 7,983,801 rubles.

When planning the return on investment, we planned an average check lower than in the first place: about 3,000 rubles versus 3,500 rubles. In fact, we think that the check will be higher, but even so, we will still break even.

The main thing is the huge area. Timeless 2 has comfortable seating, and we can fit twice as many guests as in the first facility (about 108 people). If we assume full seating, we can fit one and a half times as many people (about 150 people). As with any bar facilities, it’s important to attract customers both in the evening and during the day.

Now that we’re finishing the renovation, we’re getting ready to open. We plan to start in the first days of March, so come and see us. We’ll also tell you about the technical side of Timeless soon, including our IT system, which can improve each employee’s work, provide detailed analytics, and automate a huge number of small processes.