How Keeping Close Tabs On Your Liquor Supply Can Both Cut Costs & Generate Revenue

Topics: liquor inventory, Bar inventory, bar inventory levels, bar efficiency, bar profitability, Bar Management, Liquor cost, Liquor Inventory savings, alcohol cost, Increasing Profits, Reducing Liquor Costs, bar control, inventory control, managing liquor costs
Many of the best bartenders learn most of their useful trade while at work. This is because bartending schools vary widely in quality. Some emphasize the preparation of rarely requested drinks without stressing useful skills such as bar management, customer satisfaction, and customer safety. If you are hiring a bartender, you should consider the school he or she has attended, but testing practical skills will give the best clue of how many useful skills the person has for waiting on your bar. If you are considering attending a bartending school, investigate the school to make sure that you will be taught skills such as organization and techniques of serving. A good bartending school or course will emphasize dealing with customers. Be wary of a bartending school that is more of a "drink mix" school, stressing mixing many types of drinks without teaching anything besides drink preparation. There are many of these sorts of schools out there, which claim that a bartender's greatest asset is knowing how to mix an endless variety of drinks. Learning to mix the latest drink is relatively simple once one looks up the recipe, and most patrons will order the most popular drink of the moment rather than some obscure mix. A bartender with a good grasp of people and basic bartending techniques is usually more useful than the bartender who only knows how to mix hundreds of drinks from memory but has few skills besides. In some cases, an employee with a hospitality degree is better able to handle the bar job than someone who has attended a bartender school.
You still need to train your employees to ensure that they understand what you want them to do. In cases where an employee has worked at another establishment for a while, you may actually need to provide additional training to allow the employee to get used to the way you want things done versus how they did things at their previous job.
Many bar managers mistakenly believe that hiring young female servers will help ensure a high customer loyalty. This is based on the belief that middle-aged men are the main patrons of bars, which is no longer the case. When hiring servers or other staff, you should consider experience and skill over age or physical appearance. In most states, hiring based on age or appearance is discriminatory and can lead to lawsuits.
Bar managers want the customer to be happy enough to return and satisfied enough to recommend the establishment to others. It is never wise to argue with a customer, and if the difference of opinion is something quite small, it is better to humor the customer in order to avoid making him or her feel embarrassed. On the other hand, if the customer insists that he or she is not intoxicated and can drink more, for example, then they should be refused further drinks.
Security does add a certain peace of mind, but at many establishments, it is still the bartender who acts primarily as the security force of the bar. Where your security comes from depends on your location and bar. If you decide you do not need a separate security staff, however, make sure that the bartender or some other personnel are willing to help customers in case of an incident.
While quality drinks are a key to bar success, many people go to bars to spend time with others. If you serve good drinks but offer exceptional atmosphere and service, you are likely to do well. In today's competitive world, great drinks alone are not enough. Bar managers need to have good financial planning and careful advertising and marketing and offer great customer service in order to be a success.
Reducing costs or cutting corners (reducing the size of drinks or firing staff) is unlikely to help. Customers expect more from bars than ever before. Offering them less is unlikely to bring you the results you want. If you are just starting out, it may take months to see a profit. If you have been in business for a while, increasing customers and getting more from each customer by encouraging spending and lingering are far better strategies than downsizing in order to make a profit.
Many bar managers think that in order to make a large profit, they need to dabble in everything. For this reason, many bars spend large amounts of money setting up dance floors, live acts, larger establishments, and restaurants. When you are just starting out, though, it is often best to keep things simple. Do not expand randomly, assuming that spending more money will bring in more money. Only expand after careful research and weighing the potential risks and benefits. You do not want to get into debt for a venture that is unlikely to work for your bar.
This article is an excerpt from the The Professional Bar & Beverage Managers Handbook: How to Open and Operate a Financially Successful Bar, Tavern and Nightclub, authored by Douglas Robert Brown, published by Atlantic Publishing Group. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Topics: Bar staff, bar profitability, NightClub Management, bartenders you can trust, bar business, Bar drinks, Liquor cost, Bar products, drink recipe, liquor products
A typical beverage operation generates a constant stream of data and information, endless columns of figures and daily records. But you'd be surprised how few managers actually do anything with these figures, let alone fully grasp their implications. So how can you tell if you're operating profitably? The answer is you can't, unless, of course, you get to grips with some basic mathematics. For a start, you'll need to know how to perform a few simple calculations, such as working out an item's cost percentage. You don't need to be a mathematician to figure the following straightforward formulas:
You know the theory: to obtain the cost per ounce, you must divide the cost of the bottle by the number of ounces in the bottle. Fine, so far. But sometimes, in practice, the final sales volumes and profits can seem disappointing. You're confused because you have done everything by the book, and now, somehow, the figures don't quite add up. Get wise.
There is no better indicator of a business's success than its gross profit figure. By definition, gross profit is the cash difference between an item or portion cost and its sales price. All attempts to reduce costs should focus on this gross profit figure. Get to grips with how to figure out some important calculations related to gross profits.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Topics: liquor inventory, Bar inventory, bar efficiency, bar profitability, NightClub Management, managing liquor inventory cost, Bar Management, alcohol cost, bar control, cost control, inventory control, managing liquor costs
Sensitive pricing can make or break your operation. Pricing decisions should never, ever, be made arbitrarily. It is crucial to achieve that fine balance between pricing for optimum profits and making customers feel that they're getting value for money. Of course, you want to sell the drinks at their optimum sales volume, but if you tip the balance by raising the sales price too high, the sales volume will actually drop. So will the profits.
Having carefully considered all aspects of your pricing strategy, including cost, availability, competition and target audience, it is essential to make your pricing plan as user-friendly and easy to operate as possible. Simplify.
There are no standard markup guidelines in the beverage industry. Unfortunately, getting it right is very important. Profitability, cost control and so much more hang upon those difficult markup decisions. Here are a few guidelines to point you in the right direction:
Cocktails......................................... 3 l/2- 4 times cost
Other liquor......................................... 4 - 5 times cost
Beer................................................. 2 1/2 - 3 times cost
Wine by the glass ............................... 3 - 4 times cost
Carafe wine.................................... 2 l/2- 3 times cost
Dessert wines.................................. 2 - 2l/2 times cost
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Topics: bar profitability, NightClub Management, bar business, Bar Management, opening a bar, Increasing Profits, pricing drinks
This is an alarming fact: most types of beverage operations lose a crippling percentage of profits through insider theft. The vast majority of employees in the beverage industry are honest and hardworking; it is the small minority of staff that can ruin your business through dishonesty. Insider theft can often escalate if there are weaknesses in the following general areas of the operation:
Controlling theft behind the majority of bars is no mean task; eliminating it altogether is virtually impossible. Temptation is a fine thing, and unfortunately, the opportunity for bartender theft is overwhelming. However, in the interests of long-term survival, you have no choice but to tackle the problem head on. Be wary of the following top-ten common ploys:
The more experienced the dishonest employee, the better equipped he or she is to manipulate the system. Thieving members of staff are quick to detect exactly how much an owner really understands about the business. In the beverage industry, take nothing for granted. Alert yourself to the following, somewhat extreme, possibilities.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Topics: bar inventory levels, bar business, Bar Management, Reducing Costs, bar control, Control
Liquor prices don't vary a great deal from one wholesaler to another. Packaging and size also tend to be fairly consistent. So, what can you do about reducing liquor costs in your operation? The answer is quite a lot! It's a misconception in the liquor trade that your options are limited when it comes to selling liquor. Consider the following opportunities:
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Topics: Hotel Inventory, Liquor Inventory savings, alcohol cost
Cocktails are good for profits, and cocktail hour can be serious, big business. The customer feel-good factor is crucial. This can be achieved at no extra cost. Imagination is free.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Topics: liquor inventory timing, restaurant trends, liquor products
Choice of wine is a very individual matter. There are no rights and wrongs. It is important, however, to pander to customer preferences. Whether you run a bar, restaurant, club or specialized wine bar, you must purchase wine according to the demands of your clientele. If you get it right, profits will soar. But, if you choose wines that aren't a hit with your customers, you end up pouring your profits, as well as the unsold wine, down the drain.
Competition. Look at the competition. Keep up to date with which wines are moving well. Read trade journals and publications, such as the "California Wine Growers Institute," to learn more about current trends, or consult the California Association of Wine Grape Growers: 555 University Avenue, Suite 250, Sacramento, CA 95825; www.cawg.org.
Regularly review the wine list. Be ruthless - if a wine is slow-moving, remove it from the list.
Get ahead of the crowd. Introduce wines from up-and-coming wine regions. Suggestions include: New Zealand Riesling, Gewurztraminer and Sauvignon Blanc for whites, and South African Pinot Noir or Merlot for reds.
Storage. Wine is a vulnerable product. One of the most effective ways of reducing costs and avoiding waste is to store wine in the correct environment (temperature, light and ventilation are particularly important). See www.storing-wine.com for handy tips on storing wine.
Opened bottles. Establish par levels for each wine stocked behind the bar. Only open as many bottles as you need for one shift. All wines, particularly whites and cheaper house reds, become oxidized and deteriorate quickly once opened. A useful tip is not to pull the cork completely out of the bottle. If a cork is only partly pulled, the wine remains sealed, preventing oxygen from entering the bottle.
Cost controls on empty bottles. Count empty wine bottles at the end of each shift. This practice makes sure that bartenders aren't overpouring. For example: you use six 1.5 liter bottles of wine during a shift; your standard portion for wine is 5 ounces; then sales for 60 to 61 glasses should show up on the register tape.
Discount premium wines. Discounting premium wines results in a higher potential for profits. It also gives bartenders the opportunity to up-sell customers from standard house wines. This plan works well with "special buys" and wholesaler promotions.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Topics: wine inventory, red wine, wine list, white wine
Beer is a major seller in most bars, clubs and liquor outlets; it accounts for a hefty percentage of sales. Draft beer is particularly popular. It can prove a lucrative area of any beverage operation, if you get it right. It is estimated that wastage, spillage, excess foam, overpouring, poor quality, theft, giveaways and other draft-beer-related problems can drain your operation of an amazing 20 percent of inventory. Never underestimate the scope for cost reductions in this area!
Promotions. Beer is a perishable product. As draft beer expires quickly, always consider discounting draft beer before bottled beer.
Computer-controlled draft beer technology. A good control system is essential. The best type of control is a flow meter attached to each tap. If your usage is over two kegs per week, then you could justify the installation of an electronic device that counts fractions of an ounce.
Foam head. Control the size of the head and really make an impact on cost reductions. A good head of foam is essential, but it is up to you to control the depth of the foam. For example, in a 16-ounce glass, a half-inch head of foam yields around 136 glasses of draft per keg, whereas a one-inch head yields up to 152 glasses per keg. Add up the difference! Train all bartenders to achieve one-inch heads of foam.
Stop selling beer in pitchers. Pitchers sell at a lower profit margin than beer by the glass. Although pitchers are a better deal for customers, they do little for your profitability. You're far better off selling four glasses of draft than one pitcher of beer.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Topics: Draft Beer, beer inventory, Beer stock
Fresh orange juice. It is worth investing in a good commercial juicer for orange juice. A handy tip is to rinse oranges under hot water before placing them in the juicer - the juice yield will be higher.
From scratch drink mixes. Preparing a whole range of drink mixes from scratch is too time-consuming, and all too often, results in inconsistent quality. You're better off buying ready-made mixes. Test samples of mixes before making a decision. Prepared mixes can vary considerably in taste and quality.
Cut garnish costs. Your choice of garnishes to accompany drink mixes can, quite literally, eat into your profits. Bartenders are notorious for nibbling olives, cherries, pineapple wedges, chocolate shavings, peppermint sticks, pretzels, etc. Remove temptation. Store garnishes in airtight containers in a cooler, away from temptation. Also, establish par levels for fruit garnishes and only prepare enough for one shift.
Unusual juices. Use single-portion 6-ounce cans for less-frequently-served juices. Trade higher cost for reduced wastage, time saving and convenience.
Communicate your recipe preparation techniques. Add a brief description about your unique preparation techniques underneath each recipe on the drinks menu. Tempt your customers to try "something different." The secret lies in your method of communication, rather than in the actual recipes themselves.
This article is an excerpt from the Food Service Professional Guide to Controlling Liquor Wine & Beverage Costs, authored by Elizabeth Godsmark, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:
Topics: Bar Management, drink recipe, Drink Recipes