Schuba’s is more than a bar. Its back room is a wooden-floored concert hall, where artists on the eve of making it big play sold-out shows night after night, and next door bar-goers or weekend brunch-eaters can enjoy the Harmony Grill, a restaurant specializing in regional cuisine.

While others in the industry struggle or shut down, Schuba’s, at the corner of North Southport and West Belmont avenues, has plans to expand. A second location, on the 2400 block of North Lincoln Avenue in Lincoln Park, is “in the works,” said the bar’s owner and namesake Mike Schuba.

“You’ll probably see something up on the radar in a couple months, and that’s all I can say right now,” he said.

Fewer bars are opening in the city. Last year, applications for tavern liquor licenses—for places such as bars, nightclubs, taverns, pubs and lounges where alcohol sales make up a majority of their business—fell to 15, down from more than double that amount in 2007.  So far this year, just one bar has applied.

Back in the fall, Chicagoans started becoming hesitant about going out, and Schuba’s saw business slow during the fourth quarter, but it still grew slightly in the year overall. Because of rising operating costs, owner Schuba had to make some staffing cuts, bringing the business’s total employees down to 70.

Lakeview resident Olivia Bjorkquist, 25, lives several blocks east of Schuba's, along a stretch of North Clark Street lined with bars and nightclubs.

"I don't go out less, but I definitely make an effort to spend less," said Bjorkquist, a graduate student at the University of Illinois in Chicago.

While Schuba has noticed the bar’s busy weekend crowd spending less, he can count on turnout at its concerts by indie musicians ranging from songbird Sara Bareilles (who sang 2007 hit “Love Song”) to local marching band Mucca Pazza.

“We’re in a good position in that aspect. Bands are wanting to play our venue so badly,” Schuba said. Concert-goers must buy tickets (most do online) to get in to the 150-person music hall in the back of the bar, once a dining room filled with booths when Schuba’s first opened in 1989.

Bars with performing space regularly draw in artists and their fans, an advantage over bars that don’t offer live entertainment.

Reggie's Rock Club, at 2105 S. State St. in the South Loop, opened in 2007, and general manager Don MacEachron said it’s yet to see a dip in business from the recession, thanks to its concert lineup and bar specials.

“For us, it’s definitely business as usual,” MacEachron said.

The venue regularly hosts rockers of all strains—acoustic folk to shock rock punk—and boosts discounts, such as half-priced burgers and bottles of wine.

“We’ve seen a number of bars go to on-premise promotions including live music, karaoke, poker and trivia,” said Dave Craver, president of the National Bartenders Association in Atlanta. “Increasing promotions—it’s a sign of the times, but it gets butts in chairs.”

Bars advertise special events and a unique experience beyond the standard beers and mixed drinks.

Goose Island Brewpub in Lincoln Park just hired a new chef to help with events like beer-and-cheese tastings. The “beer-centric restaurant,” as general manager Tim Lane calls it, has also resized its portions with small plate appetizers and cheaper 10-ounce beers rather than the traditional pint.

The pub, at 1800 N. Clybourn Ave., will start featuring live music for the first time next month.

“I think this is the time to get creative with promotions,” said Lane, the secretary of the Lincoln Park Chamber of Commerce, which includes nearly two dozen bars, pubs and taverns.

A year ago, Schuba’s limited its specials to a beer of the month or discounts during times the bar was competing with cheaper drinks at outdoor summer festivals and events. Now it’s every night.

Plus, next door at Harmony Grill, they’re keeping prices low, around $10 a plate for homemade favorites like meatloaf sandwiches and vegan tomato soup.

“Our menu has always been tailored to comfort food, so that’s traditionally where a lot of restaurants are moving towards but we were already always kinda in line . . . with budget-minded people,” Schuba said.