Expert Advice on Hospitality Topics

Maximizing Bar Profits Without Sacrificing Quality and Integrity

Posted by Nick Kaoukis on Tue, Oct, 09, 2012 @ 14:10 PM
By Douglas Robert Brown
Atlantic Publishing

 

Making the Most from Sales

Bar PromotionThe 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

Bar TabsAnother 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

Topics: bar profitability, NightClub Management, bar business, Bar Management, Bar products, Increasing Profits, Bar Promotion, liquor products

Myths About Managing a Bar That Could Hurt Your Business

Posted by Nick Kaoukis on Thu, Aug, 02, 2012 @ 16:08 PM
By Douglas Robert Brown
Atlantic Publishing
 

Myth: Bartending School Is Vital for a Bartender

FalseMany 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.

 

Myth: If You Hire Experienced Employees, There Is No Need to Train Them

 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.

 

Myth: Hiring Younger Serving Staff Is Best

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.

 

Myth: The Customer Is Always Right

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.

 

Myth: Security Staff Is Vital in Today's Bar

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.

 

Myth: To Run a Successful Bar, Just Serve Great Drinks

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.

 

Myth: You Can Cut Corners to Increase Profits

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.

 

Myth: You Must Keep Expanding 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:

Atlantic Publishing Company
Amazon.com

Topics: Bar staff, bar profitability, NightClub Management, bartenders you can trust, bar business, Bar drinks, Liquor cost, Bar products, drink recipe, liquor products

Bar Management: Standardizing & Optimizing Serving Practices

Posted by John Cammalleri on Mon, Jan, 09, 2012 @ 11:01 AM
By Chris Parry
Atlantic Publishing
 

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:
drink recipes

  • 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 .

 

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


Topics: inventory managers, Bar inventory, bar inventory levels, Bar staff, bar profitability, alcohol, NightClub Management, bar business, Bar Management, bar control, Drink Recipes, controling costs, liquor products

Drink Selection: Optimizing Your Liquor Inventory

Posted by Nick Kaoukis on Wed, Sep, 14, 2011 @ 10:09 AM
By Elizabeth Godsmark
Atlantic Publishing
 

Part 3 of 4: Cocktails--Reduce Costs While Cocktails, LiquorIncreasing Customer Satisfaction

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.

  • Well brands. Reduce costs by sticking to well brands for cocktails. Don't pour away your profits by using premium brands in cocktail recipes.
  • Premium brands. Your establishment might be the sort of outlet that can make big profits out of selling premium brands. If so, use premium or middle-grade ingredients in your cocktails. Take every opportunity to advertise that fact. Emblazon quality brand names across your menus. Also, speak to your suppliers - they may be interested in offering you reduced rates in exchange for some free advertising.
  • Signature drinks. Use your imagination and create something really special. Above all, a signature drink must look special. Choose unusual colors. Use different garnishes, such as asparagus, pepperoncini, jumbo shrimp, crab claw or scallions. Stand out from the crowd.
  • "Stirred, not shaken." Don't shake mixed drinks that contain carbonated ingredients, particularly if those components are clear liquids. The bubbles will go flat, and the liquids will become cloudy. Stir instead.
  • Presentation. Dare to be different. How about serving Chambord on the side for a Meltdown Raspberry Margarita? Let customers pour the liqueur portion themselves. As the liqueur blends into the drink, it will release wonderful aromatic raspberry flavors. It will also look visually stunning. Guests will think, "value."
  • Champagne. Many recipes use champagne as a base ingredient. Once opened, a bottle of champagne or sparkling wine becomes a liability, because the bubbles are short-lived. Buy a bottle sealer specifically designed to cope with this problem. Ensure that bartenders know how to use it. You can't afford champagne wastage.
  • Ice. Choose a cocktail station that has a deeper-than-average ice bin (up to 15 inches, maximum capacity). Put a divider through the middle of the bin and use it for storing both crushed and cubed ice. When the bar is busy, hanging around waiting for ice supplies costs money.
  • Speed. Reposition liquor, wine and soda guns directly above the cocktail station. The soda gun should be placed on the left-hand side of the station, so that the bartender's right hand is free to hold a liquor bottle at the same time. A bartender using both hands is working at top speed and maximum efficiency.
  • Perceived value. Improve customer perception of value and quality by increasing the high-cost portion of the cocktail. Up the liquor content to two ounces. Guests will feel they are getting real value for their money; you know this is good for 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:

Atlantic Publishing Company
Amazon.com

Topics: liquor inventory timing, restaurant trends, liquor products

Manage Well Liquors Wisely: Mistakes Can Bankrupt Your Business

Posted by Nick Kaoukis on Wed, Aug, 31, 2011 @ 13:08 PM
Well liquor productsBy Elizabeth Godsmark
Atlantic Publishing
 

Well liquors are probably the most important products in any successful beverage operation. Approximately 50 percent of a typical bar's liquor depletion comes from well liquor. Therefore, how you select, handle and sell these liquors is crucial to the long-term sustainability of your operation. Bear in mind the following:

  • Avoid supplier "come-ons." Suppliers are always keen to off-load excess stocks of well liquor. Only succumb if you think that you can easily sell the extra volume at a significant profit.
  • Quality. Consistency and quality of well liquors varies considerably. Two factors are really important when choosing which well liquors to sell: quality and cost. Select well liquors that exactly match the quality expectations of your clientele. If your customers are picky, you cannot skimp on quality. It would cost you too dearly.
  • Sequence. The traditional liquor sequence (bourbon, whiskey, gin, vodka, rum, tequila), where dark liquors are separated from light liquors, isn't the most cost-effective method of sequencing your well liquor. Try the more modern approach. Alternate light and dark liquors, e.g., gin, bourbon, vodka, scotch, etc. It reduces costly wastage. Bartenders are less likely to mistake one well liquor for another.
  • Well liquor grade. Match the grade of well liquor to your type of establishment. No need for costly overkill. For example, exclusive clubs may have no choice but to sell predominantly premium brands. Less image-conscious outlets can reduce costs by selling semi-premium or pouring brands.
 

 

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

Topics: liquor inventory, well liquor, liquor products