Expert Advice on Hospitality Topics

• Offer your bar staff incentives to make sure that you are getting the business you need. Your staff can help customers find a venue (your bar) for functions or can promote a drink that is a known profit maker if they know that they will get more money for it. If a staff member books an event that brings in $500, a $50 incentive for the staff member is well-spent money indeed.

• Know which drinks make the most profit and advertise them. Knowing which drinks can help bring in the money is key. Once you have figured out which items bring in the most money, make sure that you advertise them. Have staff mention these drinks by name, and make these drinks more visible and more visually appealing. In many cases, suppliers will help by providing you with coasters, posters, or other items that advertise certain brands.

• Make sure your customers get value. Too many business owners (and bar managers) cut corners, thinking that spending less means more profit. Studies have shown that the opposite is true—if the customer thinks they are getting more than they can expect, they will often respond in kind by patronizing the bar and bringing their friends. 

• Make it easy to linger. Have interesting television on in the background. Have your staff ask "How about a round of coffee?" rather than "Would you like the bill?" The longer people linger at your pub or bar, the more they will buy. Also, if your bar has some people in it, it will be more appealing and lively to other customers. Customers are valuable—never rush them out.

• Stay flexible. Keep eyeing the crowd, and if you notice shifts in the crowd, be flexible enough to change to suit the crowd. Did a bachelor party just come in? Adjust by running a one-off special on beer or by turning on dance lights. Is there a more sedate crowd tonight? Bring things down a notch with softer music and lights. Your customers will appreciate the extra touch and will be more likely to stay if your place is just what they're are looking for.

• Make sure that there is always someone on staff who can make executive decisions. If there is a profit to be made and a customer to be satisfied by veering from the ordinary (by preparing special drinks or booking special functions), be sure that someone on staff can make the right decision for the bar, fast.

• Cut down on how often you say no. There is no way to satisfy each customer, but do try to keep a variety of things on hand so that you can make the drinks and snacks customers demand. Don't spend lots of time or money trying to buy every item, but do stock up on items that can be used in the near future (sodas, non-perishables). Make sure your staff know what is on hand and have them suggest an alternative when the customer asks for something that is not available. Whenever someone at your bar says no, they are giving a patron an excuse not to return.

• Consider merchandise. A great logo on T-shirts, pens, golf shirts, baseball caps, key chains, lighters, and glasses takes up little room but can bring in as much money (or even more) than your beverage items.

• Consider vending machines. Vending machines are easy places for customers to get anything from antacids, breath mints, phone cards, bottled water, condoms, feminine products, snacks, to cigarettes. Vending machines allow you to make a profit without taking much effort. Your local Yellow Pages can easily put you in touch with vending suppliers near you. You can even place your snack vending machines outside the bar proper so that you keep earning money while the bar is closed.

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:

Atlantic Publishing Company
Amazon.com

New bar managers, especially those who have never owned a business before, often find the process of caring for money matters quite daunting. There are a number of ways to make the process easier:

• Keep excellent records. Staying organized and holding on to all receipts is crucial. Invest in a filing cabinet and make sure to file all your receipts in a simple method that makes sense to you. Ideally, you want to be able to find any financial paper within minutes.

• Set aside a time and place for money matters. Each day, you should spend time considering the financial side of business. You should look at and file receipts, make payments, tally profits and debts, etc. This will make staying organized a habit. It will also prevent a buildup of financial matters that seems insurmountable.

• Consider an accountant. An accountant can help you by showing up once a week or once a month to help you complete your financial statements. Hiring an accounting service will mean an additional bill to pay, however. You will also want to go over the accountant's work on your own, to see how the financial side of things works. In general, it is a mistake to leave the entire financial management of your operation to another person. If you hire an accountant, stay involved in the financial work of your bar. An accountant, however, can be handy in the beginning, when you are just starting to learn the ropes.

• Get tax help. One place you will want help is in taxes. Tax laws are so complex that you will likely miss write-offs and other items if you do them yourself (unless, of course, you are a pro at doing taxes for business).

• Consider financial software. There are many titles out there that are made especially for small businesses, and they make managing money very easy. You can use the software to print checks, keep track of profits and debts, and you can even scan receipts right into virtual file folders—all without bulky filing cabinets. If you know your way around a computer, financial software can help make taking care of profits a snap. Here are a few well-known and relatively inexpensive financial-software suites designed for small businesses:

◊ Sage 50 Complete Accounting is easy-to-use and comes with screen-level security and automatic accounting checks that give you confidence in the integrity of your information. Plus, it's installed on computers that you control locally.

◊ Intuit Quickbooks Pro. The most popular version of America's #1 small business financial software helps you save time and get more organized. New features show you exactly where your business stands and save you time so you can focus on your business.

◊ AccountEdge is powerful small business accounting software for Mac and Windows.Sales and purchases, inventory, payroll, time billing and contact management just scratch the surface of what AccountEdge can do for your small business.

◊ Bookkeeper provides you with the accounting functionality you need to easily manage your business finances. From check writing, payroll and credit card processing, to billing, invoicing, tax preparation, reporting and more, Bookkeeper eliminates the hassles of day to day bookkeeping and frees up your valuable time so you can focus on growing your business.

• Have a backup plan in case you suddenly can't use your cash registers. Power failures and sudden mechanical problems can cost you a lot of money and always seem to occur at the worst time. Keep paper receipts and a calculator or small manual register under the bar so that staff can continue to serve customers, no matter what.

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:

Atlantic Publishing Company
Amazon.com

Making the Most from Sales

The savvy bar manager knows how to maximize profits and get the most sales possible without sacrificing ethics or drink quality. You can do the same if you follow a few simple tips. One simple way to maximize profits is by offering promotions or discounts. The small cost factor involved in initiating these promotions make them a good promotional vehicle.

"Happy hour," for example, a period of time when drink prices are generally reduced, can be an effective means of increasing bar sales. However, to be substantiated, it must draw a large volume of customers. "Happy hour" is most often run prior to opening the dining room, usually between 4 and 6 p.m. Drinks are sold at half-price or at a substantial discount. Hors d'oeuvres and salty snacks are often served, which will induce the customer's thirst.

In order to offset the enormous increase in the cost of sales due to the lower drink prices, total liquor sales must be increased substantially. A restaurant that lowers all drink prices by 50 percent during "happy hour" will be simul­taneously doubling its cost of sales. When analyzing the feasibility of a "happy hour," you must also consider the additional cost of labor during a non-operating period; the food cost of hors d'oeuvres and other snacks; and any variable costs, such as the use of additional utilities.

The gross profit margin during any "happy hour" is small, though it can be substantiated with sufficient sales. An increase in revenue, small as it may be, will be created where none had previously existed.

There are other possible benefits from initiating a "happy hour." Lounge customers will be exposed to the restaurant and may wish to return at a later date to try the dining room. Customers may stay past the "happy hour" period and purchase cocktails at the full price or remain for dinner.

Employees will also benefit from a "happy hour" by an increase in income through increased hours and tips. This point is an important consideration, as employees may become discouraged during periods of slow or seasonal business. A "happy hour" that may not provide the restaurant with the desired profit may be deemed worthwhile for increasing employee morale and decreasing job turnover, eliminating the costly expenditure of rehiring and retraining new personnel.

Bar Tabs

Another way to maximize spending, and your bar's profits, is with bar tabs. Bar tabs make it easier for customers to spend without hassle, encouraging multiple orders of drinks. To allow bar tabs or not is a policy that can be debated from both sides with sound reasoning. Many bars and restaurants have been victimized by customers who walk out and do not pay their tabs. A policy of no bar tabs will alleviate the initial problem, but it will certainly be inconvenient—and possibly insulting—to some customers.

A bar tab should always be run if a customer so desires. The lounge is a place where the customer may relax and enjoy a cocktail before dinner. He should not be inconvenienced by paying for each drink order as he goes along. Drinks should also be automatically added to the dinner bill unless the customer wishes otherwise.

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:

Atlantic Publishing Company
Amazon.com

By Bob Johnson

Part 1 of 2: Do Bartenders Steal?

Do bartenders steal?  I've worked with some outstanding bartenders over the years, men and women who are honest, hard-working, team/family-oriented and loyal. I'd like to think all bartenders are like that, but according to some, I'm misguided.

Joe Motzi of Entrepreneur Consultants in New York wrote an article on the subject for Restaurant Hospitality magazine, in which he said: "The theft is incredible! In the past three years we ran across only one bartender who wasn't stealing from his employer. That's out of about 1,000 clients! Only one bartender went by the rules of the house!"

Employee Service Reports in Fort Myers, Florida, a surveillance service to restaurants and lounges since 1950, reports that more than 50 percent of bartenders surveyed are not recording sales. That's a polite word for stealing. After weeding out the undesirable employees, the theft problem goes away - at least until after the new hires are comfortable with taking advantage of management.

A Michigan bar owner I know fired her last nine bartenders for stealing - in just one year. The owner of the Au Main bar in New York City has filed a $5 million lawsuit against 12 former bartenders and his chief financial officer for "working together (collusion) against the house, not recording drink sales and splitting the money amongst them for the past 8 years". The CFO changed the numbers in the books to cover up the missing inventory.

The temptation for a bartender to steal, and the ease of doing it, is scary. Receiving cash each time you sell a drink creates the temptation to keep the money (is anyone watching?). The drink sale is simply not rung up. The money for the drink goes straight into the cash register drawer by hitting "00" (No Sale), or they work out of an open drawer. They keep track of how much they are "over" by using a type of abacus system - 3 match sticks in a nearby empty glass equals $30, or a black sneaker mark on the floor equals $20 (3 black marks and they're up about $60).

The bartender takes the "over" out of the cash register drawer before turning in their money. Selling a cup of coffee or a "virgin" daiquiri (non-alcoholic) increases the temptation for bartenders or servers to take that money, too. Most bars do not inventory non-alcoholic type drinks, and most do not require their bartenders/servers to issue a receipt for each sale.

While taking from you, there's a good chance they're also cheating your customers. Your bar might feature "tooters", which are 24 shots of liquor served in a one-ounce tube. The bartender is supposed to sell them for a buck apiece, but decides to charge the customer $2 - and pockets $24 at the customer's expense. Of course, the house gets hurt when the customer discovers the scam.

The theft process starts when first hired. The bad bartender usually looks for areas where management is lax. They run little "spot tests" - seeing what will work and what won't. Once it's established what works it's full steam ahead.

Another type is the overt thief - one who steals openly, thinking no one, including the customer, realizes what he or she is doing. Professional spotters describe this type of bartender theft as "wide open". These people fear no one - customer or management.

This is reason enough to use professional surveillance companies, or spotters, routinely. Spotters are hired to watch for, and report, any act of theft by a bartender, waitress, manager, or any employee working on the premises.

However, there can be problems with spotters. Many don't understand a bartender's organization, motion, or actual transactions. Many are also "minimum wage plus expenses" employees of a local security company and have never tended a bar before. The best spotter is one who has bar experience and can detect a discrepancy in another bartender's work routines.

Bob Johnson is a nationally recognized Beverage Management consultant who specializes in multi-unit management of nightclubs/bars and bartending. He is a 50 year veteran of the bar business and is known for creating America’s first certification program for bar managers, “CBM” (Certified Bar Manager). Mr. Johnson has taught at Florida International University in Miami, Florida, serving as Professor of Beverage Management.

Mr. Johnson can be contacted at:

Website: BobTheBarGuy.com

Email: bjbarhop@aol.com

Tel: (800) 447-4384

Your market and competitor research will likely reveal that most bars that are successful pay a lot of attention to customers. In fact, great service is one of the surest ways of drawing repeat customers. To draw more patrons to your bar on a regular basis, you do not have to spend a lot of money. However, you do have to think like a customer; you will likely notice a few things that need to change at your establishment:

• Waiting lines. If there's a line outside the door, all it takes is a little creativity to either bring the line inside or disguise it on the outside. Remember, those people waiting outside are probably thirsty and they'd be more than happy to do their waiting in a courtyard area, at a temporary bar, or in a cordoned-off outside area where drinking is permitted. Of those who are prepared to brave the line, most will do so gladly if they know they can be inside within 30 minutes. Also, it's simple to change waiting-time perceptions by making that wait a little more comfortable or entertaining.

• Parking can be a big hassle in many venues. If there tends to be a traffic jam outside your venue, consider installing a valet service on busy nights or posting a staff member outside to direct patrons to parking around the back or down the road. Signs pointing to parking areas also help.

• Offer creative extras. Whether it is free hand massages, glow sticks, or a live band outside, making the outside dazzling will make people all the more eager to see the inside of the bar.

• Think about your TV screens and sound system in relation to your waiting area. Can waiting people catch a glimpse of the big game? Can they hear the music inside? These things will keep a waiting person keen on staying around, whereas a blank brick wall and a disinterested bouncer isn't inviting to anyone.

• Keep clientele informed. If there's a wait for a table, set up an electronic sign indicating how long their expected wait will be. Add to this anything you can think of that will make their wait more entertaining—sports scores, trivia questions, coming events. It might be a little more work, but if you can keep just five people from leaving, it'll be worth it. 

• Freebies and incentives. Offer your waiting patrons a little something extra and they won't just "not mind" waiting, they'll do so gladly. Coupons to be used on a later date are a good option.

• Create a waiting area if you know that there tends to be a wait to get into the bar. This can include comfy chairs or an outside patio where customers can wait and sit. This is a great way to make sure that customers do not get tired and leave.

• It doesn't have to be expensive. Giving your waiting customers something to do doesn't have to be expensive, high-tech, or take up your employees' valuable time. Consider offering free reading material in your waiting area or even Internet access.

• Act first. A long wait doesn't seem quite so long when a staff member keeps you informed on how long your table will take. Don't wait for the customer to ask you; go out and tell the customer.

• Make your bar irresistible. Why will some bar patrons wait forty-five minutes to get into a bar instead of giving up and going elsewhere? They have a sense of urgency to get inside. Whether you are offering a hot live act, celebrities, or some other enticement, make sure it is worth the wait

• Offer free appetizers to waiting patrons. A tray with a nice selection of different foods from your menu can actually be a great advertisement and may even generate increased food sales.

• Supply your customers with pagers. Offering waiting customers a pager to notify them when their table is ready is a great alternative to the usual "public address" announcement or a yell over the crowd. When a table becomes available, your host simply dials the waiting customer's number, and wherever they are in the building (or outside), they know that their table is ready. 

• Build suspense. If it appears as though there is something really exciting going on in your bar, people will be willing to wait to get inside.

• Make sure waits are fair. Patrons who have been waiting for a whilewill get rightfully angry if it appears as though the staff are letting in people who are paying extra or who are simply "flirtier." Make sure that your security staff respect the queue and try to get everyone inside in an orderly and fair manner.

• Keep your customers informed. Be honest. If there'll be a half-hour wait, don't tell them it will be a fifteen-minute wait and hope they don't walk out. Similarly, ensure your staff keeps them updated on the wait so they know they haven't been forgotten. Small things like this make a big difference in the eyes of a waiting customer.

Customers are your mainstay in the bar business. If you treat them better than other bars would, you are ensured repeat business. Customers love to feel like VIPs, and the more patrons you make feel like this, the more business you will have. Share these tips with your staff to ensure they treat every customer as through he or she were a star.

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:

Atlantic Publishing Company
Amazon.com

There are many bars that go out of business each year. This is because the market for new bars is a challenging one. If you are in an area that has new bars opening all the time and a clientele who is always seeking the latest thrill, you need to work extra hard to ensure that your establishment stays exciting enough. There are many small details that can mean the difference between a bar that is merely surviving and one that is prospering beautifully. In this chapter, you will learn the small details that can push your success higher than ever. Not all of these tips are expensive. Many take only ingenuity and some effort, but the results can be spectacular!

Distinguishing Your Bar from Others

One of the first steps to ensuring that your bar is a success for a long time to come is to look around and make sure that you are offering value in the local area. Most of your business will be from people who can easily drive, walk, take a cab, or ride a bus to your bar. These same patrons will have the choice of many other bars in the area. There are a few ways to make sure that they select your bar:

Research the competition. Take the time to sit in every competing bar. After you order your drink, take notes: Who frequents these bars? Older patrons? Younger patrons? Yuppies? Tradespeople? What sort of bar is it? How much do they charge? What does the bar look like? What are the drinks and food offered? What are the promotions? What kind of entertainment is offered? How busy are they and on which night are they busiest? What are they doing wrong? What are they doing right?

Consider lower prices. If your competitors' prices are high, consider lowering yours. It will often get people to try your establishment for the first time. Your service and the quality of your bar will decide whether
they return.

Service. If your bar is known as the friendliest bar in town while your competitors tend to slack on service, you will make a profit. If your competition is already offering great service, you have to make your service stellar in order to compete.

Focus on what the competition is doing wrong. If you notice something that the competition is doing wrong, make sure that your bar is doing that same thing right. It will encourage patrons to see your bar as the local establishment that offers more.

Set your hours to take advantage of times when your competition is not available. If the competition stops food service early, think about extending your food service hours. Being able to provide something that the competition cannot or is not willing to provide is a great way to make sure that you lure in new regulars.

Do you know what the local patrons want? If you do not ask them and conduct regular market research, you have little hope of knowing the very things that will draw patrons to your bar.

Look at the bars that are succeeding elsewhere. What works in other cities and towns may work in yours. Pay special attention to the types of bars that are doing well in areas similar to your own (in towns or cities with the same demographics). These bars may have hit on an idea that may work well in your area as well.

Special promotions. Avoid using your best ideas and resources trying to compete on someone else's strongest night. Offer special promotions and discounts on nights when other bars are not offering anything. It will help lure in customers looking for something great on a slower night.

Remember, if you can offer something special, you are more likely to get more customers. It pays to make the extra effort to find out what is needed in your area—and then supply that need. Customers will flock to you.

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:

Atlantic Publishing Company
Amazon.com

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

Industry studies have consistently shown that a full 25% to 30% of a bar's liquor inventory never converts into registered sales. That is the equivalent of about six to eight 1.25 oz portions per bottle (which should yield at least 25 portions.) This loss of liquor volume--due to unauthorized comps, over-pouring, spillage or theft--should be of great concern to any bar manager. 

While losing 25% of a $25 bottle may not seem like a very serious problem--an unavoidable cost of doing business--the true cost is much greater than that $6 or $7 per bottle. The question you need to ask yourself is: Where is this lost liquor going? And how is it affecting sales? For instance, if your bartender is not pouring 1.25 oz portions, but is instead pouring 2 oz portions (say, perhaps, to curry favor with clients and receive a bigger tip), you're not just losing liquor volume, you're also losing potential sales. Where the customer may have been disposed to buy three drinks (3.75 ounces), he may now be content to buy just two 2-ounce drinks. Your bartender's actions, in this case, haven't merely cost you a dollar's worth of liquor, they may well have cost you $6-$8 in lost sales revenue (depending on how you price your drinks). And that's just for one customer buying two drinks. How often is this occurring? What if your bartender also happens to be giving away free drinks without your knowledge or authorization? The point is: "shrinkage" does not only affect supply costs, it can also affect revenues in a big way. 

That's why loss prevention is so important. The profitability of your business depends on whole bunch of variables--the location of your establishment, the overall economy, ever-changing customer tastes.... Achieving profit growth can be difficult and can rarely be accomplished overnight. Increasing the price of your drinks is risky, and can prove more harmful than helpful as far as your bottom line is concerned. And growing your clientele usually takes time. The best way to increase profits in the short-term, therefore, is not to try to fiddle with pricing or to increase your client base. (Of course, this is something you should always be doing. But it is not easy to do in the short-term.) The quickest way to increase revenue is to make the most of the clients you're already serving. And one way to do this is to improve operations by getting tighter grip on your inventory. Loss of liquor supply at double-digit levels is not an "unavoidable cost of doing business". It is "bad business". And it is entirely avoidable. Put simply, loss prevention can pay big dividends. What's more, it can be achieved quite quickly through the implementation of a quality liquor inventory control system.

Markup: Where to Pitch It

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:

Atlantic Publishing Company
Amazon.com

This article is an excerpt from the Food Service Professional Guide to Bar & Beverage Operation, authored by Chris Parry, published by Atlantic Publishing Company. This excerpt has been reprinted with permission of the publisher. To purchase this book go to:

Atlantic Publishing Company 
Amazon.com