To the amazing customers we have had the pleasure of working with over the years:
Being required to close your doors will help us all to beat this unprecedented catastrophe. Your contribution for the greater good is necessary and certainly appreciated. Nobody wants to lose potential sales, but rest assured, your business will come back quickly. People can’t wait to eat, drink and socialise in your premises like they have done in the past.
When this crisis passes, you will need to bring as much money to the bottom-line as possible to pay expenses, employees, yourself, and to rebuild your business. During your time at home, take a few minutes to read our message below. This will give you valuable tips on how to best manage your bar operation going forward.
Stay strong. We will all get through this together.
Vinnie and Alan.
What sits behind your bar is not just bottles and taps, it’s €€€. Controlling bar costs is one of the most important aspects to running a successful and profitable bar operation. It is one of the easiest ways to make sure you are making money, as well as one of the quickest ways to lose it. Regardless of what kind of business you have — nightclub, bar or restaurant — preventing losses on alcohol is key to running good bar costs and, in turn, generating bigger and better profits.
To control costs, start at the beginning. Before anything comes through the back door, you have to order it, and your ordering procedures have a big impact on how you run your costs. If you are simply ordering what you “think” you need, you are taking the first step toward becoming an unprofitable bar.
When you have too much product on hand, your staff will use it; they’ll feel you have an abundance of Spirits or Beers and won’t be concerned about loss and waste. The same goes for any items that are not being used. Have a bottle of liqueur sitting on your shelf collecting dust? If it’s not making you money, then why have it behind your bar?
How your product comes into your business also plays an important role in your bar costs. Do you have a good relationship with your suppliers? If not, start talking to them and get to know them but that doesn’t mean you let them drop anything off without someone checking it in. If you allow suppliers to drop off product with no checking, you risk something not reaching your cooler or maybe receiving product you don’t even need.
Simple human error or slight of hand also can cost you money; miscounted kegs coming in or empties going out can yield loss very quickly. Stopping loss at the back door by imposing proper procedures also is crucial to running good bar costs.
Who are your biggest business partners in the bar? Why, your bar staff, of course. They probably have more control of your bar costs than you. They are working there every day and may be generating loss or waste. It is your job to manage them to keep this to a minimum. Many bartenders understand their role in controlling costs and take on that responsibility. Unfortunately, there also are those who unwittingly or purposefully contribute to you losing product and profits through theft, improper pouring, lack of recipe knowledge or even simple inexperience.
Bartenders play a huge role in running good bar costs and they must be held accountable. Communication is key here; have weekly meetings if bar costs are not in line, outline the dos and don’ts, and make it known that there are consequences for not controlling loss and waste. Posting the cost of sales that shows any loss for the bar is an easy way to clearly make this point and also demonstrate that you are keeping track of their performance. In addition to consequences, there should be some incentives for running good bar costs. This will promote best practices for those working behind the bar. Finally, if you suspect someone of theft, get to the heart of the matter quickly. Those with sticky fingers should not be working behind your bar.
These are three key ingredients to running a profitable bar; if you start with these basics you can rest assured that you are taking care of the most important aspects of cost controls. Start with and master the basics. For the ordering process, set up your bars and remove the dust-collectors. Looking at product delivery, make sure you’re getting what you’re paying for, and finally, watch the actions of those behind the bar. Properly train bar staff and then hold them accountable as your best business partners. Control these areas and you will have a money-making bar.
As part of our same-day service, and post-stocktake analysis and consultancy we can provide you with clear actionable advice to immediately impact your Gross Profit and Cash Margin. If you’re interested in total visibility of your margins, total control of your inventory, and total security of your investment then talk to Total Stock Control today.
Recent Comments