Are you a bar owner wondering if your profit is going down the drain along with the beer foam? In this article, we’ll discuss how it could happen and the way in which you can change a loss of your profits into a lot of margin gain. Let’s take a look at the bar business, both from the problem side and the solution side and, if you do not yet have a business plan, use these bar business plan examples as a guide to cement the purpose of your bar in place. The goal is simple: create more profit for your bar business.
6 Problems that Drain Your Bar Profits…6 Solutions that Save Your Profit Margins
- Problem: Inefficiencies Behind the Bar
Even the best-run bar in the city can experience inefficiencies behind the bar. The reasons for this are multi-faceted, with the most dominant issue being that of unrealized waste. For example, if a server is untrained in how to properly pour beer from the tap, about 20% of the foam will go down the drain due to overpouring the beer.
Solution: This is a simple fix; train the bartenders to pour beer from the tap correctly so no foam is lost in the process. This will save about $80 per keg in found beer with correct pouring methods. The results will show an increased profit with this small change.
- Problem: Bar Food and Garnish Waste
It is customary for bar kitchens to provide garnishes on plates and in alcoholic drinks. While the visual appeal is high, you’ll want to assess whether or not the customer needs the garnish in order to appreciate the drink. When signature drinks demand a certain garnish, such as a celery stick in a bloody mary, you will want to include that as part of the cost. However, the additional garnishes, such as green olives, smoked bacon, and other food items can easily be removed. Or, if bar patrons will resist, add the garnishes to the cost of the drink and increase the price of the drink accordingly.
Solution: Consider the following garnishes and the solutions that can be found in omitting or revising the offer:
- Instead of lemon slices or wedges: Use a zester to peel long, thin strands. Arrange in curls.
- Instead of maraschino cherries: Use a thin slice of dehydrated cherries.
- Instead of stuffed green olives: There are no substitutes, but offer one olive instead of three.
- Instead of smoked bacon: Use a thin curl of beef jerky or add to the price of the drink.
- Instead of orange slices or wedges: Use a zester to peel long, thin strands. Arrange in curls.
- Instead of a sprig of parsley: Use nothing. Parsley is expendable and is rarely eaten.
- Instead of fresh pineapple: Use a thin curl of dehydrated pineapple.
As indicated, garnishes can continue to hold a place in alcoholic beverages and some, such as mint, must be retained; however, garnishes can be reduced in size, dehydrated and curled for effect, and omitted altogether for some drinks. Citrus fruit and apples can easily be dehydrated on low heat in any oven at an additional cost savings.
- Problem: Replacing unused bitters and other liqueurs and spirits that have a limited shelf life. These types of spirits or liqueurs are expensive and have a shelf life that suggests they must be used as soon as possible. However, many of the beverages they are added to aren’t common, everyday beverages. This creates a problem of waste, as spirits and liqueurs are tossed if the shelf life is up.
Solution: Bottling homemade fruit liqueurs is quite easy and, when alcohol is steeped into the juices, the liqueur will last up to one year. Use any recipe that includes heating the fruit to temperature and thickening a bit to form a syrup. The cost is a fraction of what commercially available liqueurs and spirits cost.
- Problem: Inventory Control. When inventory counts are inaccurate, it is time to consider the reasons why. Sometimes, theft is involved; but, more often than not, it is an administrative error somewhere in the counting process.
Solution: Choose a software program that tracks inventory, monitors employee hours, schedules deliveries of alcohol and much more. Consider an inventory management platform that takes on several tasks at once, such as RapidBar, offering:
- Supplier order creation
- Inventory and sales reports
- KPIs for each beverage
- Cost calculation
- Problem: Outdated beverage menu at bar: sometimes the same old favorite suddenly becomes too tired to stay on the menu.Solution: Create new, fresh and vibrant flavors in house-made alcohol-laden drinks. Send your staff to a bartending school to learn all about different drinks, mixology and how to create the original and unique cocktails. Use bar-made fruit syrups, purees, and blends to pack flavor into any drink and enjoy the opportunity to expand the menu. Follow the recipes carefully, watch for accidental overpours, and cost out all ingredients to maximize the profit.
Solution: Create new, fresh and vibrant flavors in house-made alcohol-laden drinks. Use bar-made fruit syrups, purees, and blends to pack flavor into any drink and enjoy the opportunity to expand the menu. Follow the recipes carefully, watch for accidental overpours, and cost out all ingredients to maximize the profit.
- Problem: Over-pouring at the bar causes the loss of profit margin.
Solution: Use a software program that will virtually track the amount of each pour. Invest in one or more jiggers to measure alcohol equally into drinks every time.
Using solutions to defeat common bar problems can be fun, creative and challenging. With verve and energy, each of these problems can be found to have solutions that will raise profit margins and add long-term growth to your bar.
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