Article contributed by Orderly
You thought adding a bar to your restaurant was going to be fun. It’s a great spot for customers to enjoy a new cocktail, wait for a table, or watch the game.
But you realized pretty quickly that running a bar is definitely NOT easy – it’s a totally different beast than running a restaurant. If you aren’t careful, it can drain your cash faster than your regulars can drain their glasses.
Get a handle on your bar business with the 5 Ways You’re Running Your Bar Into the Ground, or it will be last call… permanently.
1. Weak Links in Your Staff
You’ve noticed that your bottles are running dry faster than usual, and your sales don’t show why. The problem could be your staff.
First, check your training program. Are you helping your new hires avoid unnecessary slip-ups?
Or maybe a veteran bartender is making some heavy-handed pours… Or are giving away too many free drinks. It may seem like a few ounces here and there is no big deal. But those slip-ups can add up big time.
Your POS numbers will be totally out of whack, so you’re ordering more bottles without the dollars to back it up.
SOLUTION: Maintain a constant, ongoing training program.
- Don’t just send a bartender into the jungle without at least 1-2 days of training. Build a program that teaches proper techniques and tricks.
- Train on pours and randomly test bartenders to keep good habits in check. Keep it fun, though, and offer some rewards to sweeten the deal.
- Keep your company policies updated, and stress the importance of accurate numbers and consistent pours.
2. Your Marketing…May Not Be As Effective As You Thought
So, you’ve got a happy hour. Great! So does every other bar in town. Sure, it’ll work sometimes. But, happy hours don’t showcase what makes your bar special or unique. It’s just a discount, which means less cash per customer.
You’ve probably also got a website and some social media pages. When’s the last time you updated them? Have you ever done any advertising?
If the answer is no, you’ve got some changes to make.
SOLUTION: Get creative with your marketing.
- Try putting a triangle board outside with witty sayings that make you stand out in people’s minds.
- Create special menus and host special events. Try establishing partnerships with local companies and sports leagues.
- It’s the 21st century. Update your website and your social media pages. Post your specials, take photos, and create a hashtag for your brand.
3. You’re Disorganized
Bars love to show off their wide array of bottles behind the bar – most have almost 120 different liquors.
But if your bottles aren’t organized well, it makes life brutal when it’s time to do a count. Plus, when the bar is busy, your bartenders might have a hard time finding what they need quickly.
When time means money, why are you keeping customers waiting?
SOLUTION: Organize your liquors by volume.
- Keep your 10-12 “highest volume” liquors in one easy-to-access place. They account for 60-80% of your spend, so it’s good to know where they are.
- Keep your 60+ “mid-volume” bottles in another spot, as you’ll order them every other week or so.
- Find a home for your 40 or so “low volume” drinks – those that are more expensive and you’re not buying or serving very often.
4. Price-blindness on Booze
Though it’s a pain to keep track of all the numbers, keeping tabs on your bar costs can make a world of difference.
Maybe you negotiated with a vendor to get a better price. But slowly, that cost starts to rise back up… and doesn’t stop. And your vendor is banking on you not noticing it at all.
Or maybe out of nowhere, you’re suddenly paying 15% more than you were a week ago. And your supplier didn’t call to tell you…
When you aren’t keeping tabs of your spend, you run the risk of getting stiffed.
SOLUTION: Follow price trends, keep track of your costs, or just get technology that does it for you.
- Between training bartenders, ordering new barstools, and making purchases, you don’t have a lot of room to monitor your costs. Find a technology solution that does the work for you so you can call the shots, not your suppliers.
5. Not paying attention to your variance
Variance is the difference between what you actually have in stock and what you thought you had.
It’s related to your portions and your loss, and it’s crucial to profitability.
Focus on alcohol usage to size up your variance, especially for your key, high-volume ingredients. For liquor, pay close attention to the portioning, or how much your bartenders are pouring.
For beer, it’s all about the loss. If you’re going through more kegs without the sales to support it, you’ll have to do some investigating.
SOLUTION: Pay attention to those high-usage items.
- Target your popular drinks, like your well liquors and light beers. That’s where the big impact to your revenues can lie. It’s Pareto’s Law: You consistently count 20% of your inventory, because they account for 80% of your costs.
- Don’t forget you’re still managing an entire bar. You can’t completely ignore those expensive liquors… Give them a count every so often.
Conclusion: Save your Money and Save Your Bar
Like we said… running a bar isn’t all fun. It’s a tough business. The good news is, there are some simple solutions to all the ways a bar can fail. And technology can help with almost all of them.
Software and apps can’t write your next marketing slogan…or train your bartenders on mixology. But they can provide the tools to make your bar pay off.
Every restaurant bar is different. So do your research and find a solution that works for you. But you shouldn’t just continue to ignore your bar costs. You simply can’t afford to.
Danny Barry is the Content Marketing Manager at Orderly, where he is helping restaurant owners find the hassle-free way to a smarter restaurant. Orderly provides food cost management done for you, and is proud to save all of its customers thousands of dollars and hours of time. A graduate of the University of Miami, Danny loves to create content that helps change people’s businesses for the better.