Expert Advice on Hospitality Topics

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:

• Broad guidelines. You need to start somewhere. The following markup suggestions may help:

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 - 2^l/₂ times cost

• Three main pricing methods. There are, however, three general approaches to markups in the beverage industry. A basic understanding of these options will guide you in the right direction:

1. Traditional markup - a combination of intuition and local competition. Don't rely on intuition alone - you'd be on to a loser.
2. Cost plus markup - here, price is determined by adding a markup to the  cost of the item. Easy to apply, this method is popular in the beverage industry.
3. Item cost percentage markup - similar to cost plus pricing, but linked to profit targets.

• Type of establishment. Markup is often driven by the type of establishment. For example, luxury hotels, restaurants and nightclubs can command heftier markups. Bars and taverns, on the other hand, have to compete more fiercely with similar outlets in the locality.

Part 3 of 3: The Service Bar

The service bar is an area of the bar dedicated to the servers only. If designed well it can greatly improve the flow of drinks from the bar to the customers. Alternately, if your service bar is not designed well, it can add yet another delay in an already-crowded process. When setting up a service bar, the things that should be considering are:

• Layout. Will your staff need to make a long trip, past waiting customers, to get to your drinks server? Placing the service area off to the side of the bar might seem like a good plan when the bar is empty, but when it's full, a drinks server who has to yell to be heard is a disgruntled drinks server - and a frequently delayed one.

• Drinks station.Is everything the bartender needs to prepare drinks positioned within six feet (a step and a reach) from a drink preparation area? If it isn't, you're only adding waiting time, opportunity for spillage and even waste to the drinks serving process.

• How far do your drinks servers have to travel to reach your customers? Do you seriously expect your server to negotiate a heavy crowd with 12 drinks on his or her tray and not encounter spillage? Clear the way. Improve not just your server's efficiency but also customer traffic flow.

• Service bar communication. If you have a bartender or bar devoted purely to drinks service, consider providing your servers with radio headsets that will allow them to communicate a drinks order to the bar from the floor. This simple move can save your servers from making literally hundreds of trips across the floor a night and can slash service times considerably.

Glass-Handling Rules

Too often, bar staff think of glasses as disposable partyware and all but ignore the fundamental rules of handling drink service equipment. Make your bar staff aware of the following, or you could find yourself in hot water down the road when someone complains:

• Never, ever, use glasses as ice scoops. A tiny chip of glass falling into your ice bin can cause a great deal of injury, and bar glassware certainly isn't designed to shovel rocks of ice. Along the same lines, any time a glass breaks in or near an ice bin, the entire ice bin needs to be emptied and the contents disposed of before it can be used in the preparation of another drink.

• Staff should never touch the upper half of a glass in the act of serving a drink. It's un­hygienic; it looks terrible to the customer; and the glass will be much more susceptible to breakage if it's being handled regularly in this manner.

• Stemmed glasses. They're far more susceptible to breakage than most other types of glasses - not to mention usually more expensive. Make sure that all staff take extra care in the handling of these items, perhaps even to the point of washing them by hand.

• Inspect. All glasses need to be inspected, if only briefly, before they're used in a drink order. A lipstick smudge, chip, crack or remnants of a previous drink are not only off-putting to a customer, but they're also hazardous to the customer's health.

Part 2 of 3: INTERNET & TECHNOLOGY

Online reservations. Online reservations will continue to experience modest growth. While not a rapidly growing trend, the use of the Web to find where to go to eat and drink has become so common  a Web presence, and a listing in Zagat, Opentable and other where-to-go sites is crucial in attracting new customers

Going mobile. Google projects that mobile devices will overtake PCs as the most common Web-access device by 2013.The ubiquity of smartphones and tablets makes it imperative that Websites be mobile-friendly. As many of these devices either do not support or have trouble playing Flash content (which has become a staple of restaurant, nightclub and bar sites), you would be well-served to optimize your site to take advantage of the rapidly growing number of mobile users who rely on their iPhones and iPads to find where to go for a drink or a bite.

Social media. The growth of social media continues. Twitter, Facebook and Google+, alone, boast a combined 1.5 billion users. Moreover, social media sites will become a key component of Search Engine Results Page (SERP) algorithms. If you’re not already using social media as a marketing tool, it’s time, perhaps, to start. It’s often said that the best form of advertising is word of mouth. What social media does is combine the credibility of word of mouth with the reach of mass media. In fact, the social media’s reach far surpasses that of any form of traditional mass media. Given this, it may make sense to hire a social media manager to help promote your store.

Electronic cigarettes. Electronic cigarettes are becoming more and more ubiquitous. These electrical devices, which produce a flavored aerosol mist that simulates tobacco smoke, have become popular both as a way of quitting tobacco and as a way for smokers to kinda feed their habit in places where actual smoking is prohibited. Expect e-cigarettes to become a more common sight in bars and nightclubs in 2012. Also expect them to be sold more widely in drinking establishments. Not only do these devices provide an added revenue stream, they may actually have the added benefit of keeping smokers inside and drinking.

Tablets. By the end of 2011, nearly 34 million Americans owned iPads and other tablets. With new, less expensive tablets going on themarket, that number is expected to grow 63% in 2012, and by 2014 it’s predicted that 90 million Americans (or a third of the population) will own a tablet computer. Expect these devices to be adopted more broadly in the hospitality industry—not only as a (POS-integrated) replacement for the wait staff’s order pads, but as enhanced menus (with photos, ingredients, the calorie count of foods, suggested wine pairings etc.). Many wine bars and restaurants are already using tablets as a replacement to traditional wine menus. Tablets also provide an opportunity to provide cheap entertainment, in the form of interactive gameplay, to bar patrons.

DMX lighting. LED’s and new, cheaper and simpler-to-use DMX lighting software will allow owners of restaurants, lounge bars and nightclubs to modify the look and feel of their stores with greater ease, without having to overhaul the entire architecture. Whether as means of creating an entirely fresh look or as a way of changing mood lighting to match an event, a season, or a time of day, you’ll begin to see DMX lighting used more widely to create a fresh look and feel.

Part 1 of 3: Establishing House Drink Recipes

A bartender makes a good drink with originality, panache, speed and skill - but a great drink starts with the boss. You determine the drink menu, you determine the recipes to be used and you set the price and make the rules. Your staff just follows your lead. In many bars, it's left to individual members of staff to know the "standard" formulas for cocktails and mixed drinks. Everyone is supposed to know that a Tequila Sunrise has one shot of tequila, right? Or is it two? Maybe it's a shot and a half... Profits are too hard won to just throw away alcohol when your staff crosses their wires about your drink recipes. Some easy steps to ensuring standardization of your house recipes include:

• Recipe lists. Make sure when you take on new staff they receive detailed recipe lists to take home and look over before they start their first shift. It doesn't cost you a lot to photocopy a few pages of text and give them to your staff, so make sure there's no excuse for them not to know as much as they can before they start mixing on your dime.

• Recipes on display. Ensure that there are either laminated index cards or recipes listed behind the bar at all times so that any member of staff - even emergency fill-ins and temps - can see exactly what is needed to prepare each drink - no more, no less. Below is an example of a recipe card and the information it should contain:

• Cocktail menus. When you leave cocktail menus on tables, make sure that each one shows exactly what is in the drink - not just the ingredients, but the ounce amounts of each. This will not only serve as a more informative drink menu to your customers, but will also allow them to more accurately measure what they've consumed over the course of the night.

• Premium ingredients. If you use premium or middle-shelf ingredients in your cocktails, make sure that your cocktail menus make a point of that fact by showing the brands used. There's no point in hiding the fact that your base spirits and liqueurs are of a higher quality than those of your competition, especially because your liquor distributor might chip in for some of the cost of printing if they're being marketed in your literature in this fashion.

• Accuracy. Make certain that the cocktail and mixed-drink recipes give a clear indication of what glass is to be used, what garnish should be used, for how long and on what setting any blended drink should be blended and what brands of alcohol should be used for their creation. If you leave anything out, you can bet someone will get it wrong - and with alarming regularity.

• Bartending recipe computer programs. For example, Interworlds Software's "BarBack for Windows" can tell your staff how to create a drink even if a customer asks for something ridiculously obscure. BarBack includes over 10,000 different drink recipes, as well as information on glassware, ingredients, mixing methods and garnishes. Rather than taking away from the skills of your staff, insightful programs such as these actually complement their skills to ensure your customers get exactly what they want in the quickest possible time. BarBack can be downloaded at www.barback.com .

Part 3 of 3: Streamlining Service Areas

When you design your service area, it's important to realize that every step a bartender takes in the serving of a drink is costing you money and making your customers impatient. Where does your staff need to walk to get a clean glass? How far from there to the ice bins and then to the spirit dispenser? And where are your soda guns in relation to the bottles? Is the cash register yet another trip away from the customer? Even if your bartender has to take only four or five steps between each of these posts, consider how far that means your bartender has to walk in the course of serving 500 drinks a night! This is bad enough for a solo bartender, but when two or three people are working behind the same bar and sharing facilities, it can be an unproductive nightmare.

• Most bartenders are right-handed. With this in mind, your bar setup should allow your staff to pick up glasses with their left hands and bottles with their right, so that the drink creation process is at its most productive. If your bottles are on the left and glasses on the right, your people will do a lot of crisscrossing back and forth, resulting in more time taken to prepare a drink - and a lot more breakage and spillage.

• Consider your customers. If they're lined up three deep to get a drink, and the bar staff need to take extra steps for every drink, each of those customers doesn't just wait longer for his or her own order, but for every order ahead as well. These people are lining up to give your business money - the last thing you should do is make it difficult for them to do so.

• Low-cost equipment. If you can't afford to equip your bar with brand-new reach-in refriger­ators, there is another low-cost alternative. Consider keeping a sink full of ice directly beneath the bar top. Have three or four dozen high-turnover bottled beers in the sink at all times. Your staff can refill the "Bud bins" from refrigerated stock whenever there's a slowdown in customer traffic, thereby saving dozens of unnecessary trips to the fridge every hour, not to mention giving your customers faster service.

• Pre-made mixes. To save time during their busiest periods, many bars pre-make cocktail mixes. While this is a good plan, be sure not to have these pre-made mixes sitting out in plain view. Ensure your staff don't refill them in the public eye. If your bottom line dictates that you have to use tequila from Peoria, it's best not to advertise the fact when you're charging eight bucks a drink.

The Under-Bar

Your under-bar is the engine of your bar area. If it's designed well, your staff can get from order to delivery in seconds. If it's poorly designed and dys­functional, your customers and staff could spend a good portion of the night stuck in bar traffic.

• Focus on the customer. Employee interaction is the key. The under-bar area should contain everything your staff needs to fill 80 percent of their drink orders without moving a step away from the customer. If your staff aren't able to engage your customers in steady conversation as they're filling their orders, you're not only putting your staff through more work than they need, but you're also making your customers wait too long.

• Bar layout. If your staff can work more effectively within a smaller area of the bar, you will be able to fit more staff behind that bar during peak periods, ensuring faster service and higher productivity. Take a fresh look at the bar area and consider what changes you can make to improve productivity.

• Streamline your workstation. Many bar-fitting companies sell sink units that include speed racks, jockey boxes, ice sinks and more. They can also replace aged fittings with a minimum of fuss and expense. This will give your staff a compact, efficient workstation from which to maximize their time and effort. Prices vary, but when you consider the time, labor and customer tolerance savings, it's a purchase that will pay for itself many times over. BigTray (www.bigtray.com) can sell you this kind of equipment online or over the phone at 1-800-BIG-TRAY

Part 2 of 3: Design Your Bar With the Customer in Mind

 Consider Customer Comfort

Have you ever sat under a blue neon light for an hour? While neon decor might look great when a bar is packed to capacity and the music is pumping, when business is slow it's like a power drill closing in on the center of your forehead. Certainly your customers should be impressed by your decor, but will the very look that draws them in end up driving them away early? Consider the following:

• Invest in comfortable seating. Wooden barstools may look fine, and are usually very cheap to purchase and maintain, but are they likely to give your patrons buttock cramps after an hour? Try padded seating. Make sure the customers can move their seats to suit with a minimum of fuss - never have barstools and tables bolted to the floor.

• Consider installing booths. Replace those cheap tables. If you want your customers to stay all night, give them the kind of seats that will make them too comfortable to leave. Customers tend to settle into booths, especially if a venue is crowded. If your drink servers are attentive and food is available, a group in a booth is all the more likely to settle in until closing. Remember, a shaky table is very easy to walk away from.

• A comfortable bar surface keeps your clientele happy. Make sure your customers can lean on the bar and get comfy without getting cold elbows. This is much more likely if your bar surface is wood than if it's stainless steel or marble.

• Lighting. Your lighting does more than just keep people from bumping into one another - it sets a mood. If you've inherited a system of overhead fluorescent lights or neon, consider getting a lighting specialist to give you suggestions on potential improvements. It won't cost as much as you think. Generally a quote is free.

Color Schemes Influence Buyer Behavior

Have you ever wondered why fast-food outlets almost always follow the same color scheme? The McDonald's decor and logo are yellow and red, as are those of Taco Bell and Burger King; KFC's are red and white, just like Pizza Hut, Wendy's and Jack in the Box. Coincidence? Not quite. Research has shown that certain colors promote cravings in consumers. When an establishment is decked out in reds and yellows, customers tend to experience feelings of hunger, not to mention an inability to settle down and relax. It's believed that those colors will cause a moderately hungry person to order a little more than he or she needs. They also will prompt customers to move on quickly once their money is spent. Blues and greens, on the other hand, promote relaxation, serenity and even lethargy amongst customers, which might be the better option for an establishment like a bar, where you're looking to keep your clientele seated for the long haul. How can you utilize these colors to quietly "persuade" your customers to buy, buy and buy?

• Menus and food areas. A red and yellow color scheme on your tabletop menus or food area signage may cause your patrons to develop a stronger urge to order food, yet not be so over­ whelming as to chase them out the door.

• Bar decor. Some hardy potted plants, maybe a few palms and a little pastel color on your walls may help your bar promote a feeling of island- like serenity in your customers, compelling them to relax a little - and stay.

• External decor. Your signage and building front are supposed to draw people in. But does your frontage inspire the desire to party? Or does it drive people to the KFC down the street?

• Staff uniforms. Do the colors of your employees' uniforms say to your customers, "Welcome, stay a while," or "I'm busy, what do you want?" Your staff uniforms are an important part of your overall decor. Your decisions about their design can radically change the atmosphere of your establishment.

• Open theft. A bartender pours a drink, doesn't ring the cash register and puts the cash in a "holding" place, such as the tip jar.

• Overcharging. Bartender pockets the difference. A variation is to charge regular prices but ring up "Happy Hour" prices and, again, pocket the difference.

• Ringing "00" on the cash register. The bartender simply steals the value of the drink.

• Overpouring. Bartender hopes to get a heavy tip.

• Underpouring. Bartender keeps a mental note of the number of half measures poured throughout the evening and then thieves the equivalent value in drinks, gives them away or drinks them him-or herself.

• Rounds of drinks. Bartender rings up for a "round" rather than separate items. It makes it easier to inflate the overall price of a round of drinks, particularly if guests are unfamiliar with individual prices.

• Shortchanging. Common variations include: counting aloud while handing the customer less money, distracting the customer by sliding the change along the bar, and giving change for lower -denomination bills (while keeping the difference).

• "Soft" inventory. Bartender neglects to charge for the mixer component of a drink.

• Substitution - bringing in own liquor. This is often done with vodka because it is odorless and looks like water. Dilution is another similar ploy.

• Padding the tab. The bartender pencils in an inflated total and later erases it, replacing it with the correct total. Warning! Ban pencils from behind the bar.