Top 5 Ways You’re Losing Money at Your Bar and How to Fix It
We’ve all seen it before…the over pour, the bartender miss-ringing an item, the “free” drink, the mischievous/thirsty team members…the list goes on. As an operator, these equal missed sales and missed revenue on already very thin margins.
Here are some of the top things to watch out for and some tips on how to avoid them. (Scroll over each image to see a description)
How to recognize these issues the old way….
Check your actual vs theoretical cost to understand if there is a variance in your numbers. With any of the issues listed above you’ll see that you actually brought in less money than you should have based on the amount you’ve sold. What do you do now? You need to hunker down, brew some coffee, and dive into your numbers. Are there any glaring issues when one product is way off of where it should be? Did the price on any of your items drastically change? Did you run any deeply discounted specials that would throw off your cost?
How to recognize these issues with technology…
Utilize an inventory management system. Inventory management software is designed to make your life easier and highlight any issues in your inventory before they cause too much damage. The good news is that with restaurant technology finally catching up you have plenty of options to choose from. Do you want a system that can scan your products and invoices? Do you want to be able to order from your vendors with one click of a button? Do you want something simple and easy to use? How about integrating with you POS? There are lots of things to consider but, in the end, these tools can save you valuable time and money in your business.
The Top 5
1. Over Pouring
As a guest, a heavy-handed bartender is a great thing. As an owner, it’s as if you’re watching money fly out of your pocket. It may not seem like much but if you have your lead bartender over pouring by .24-.5 oz. on every drink your bottom line will be in big trouble.
2. Staff Error
Let’s say you’re serving Don Julio Anejo at $12 and also have Don Julio 1942 at $25 on your menu and your new bartender is ringing up the Anejo but pouring your guests the 1942.You’re then losing $13 every time your guest orders that drink.
3. Freebies
Also known as theft by some owners.Bartenders are known to give a “free” drink here and there but how big of an issue is it really?Could you be losing hundreds of dollars a week on this issue alone.Most likely…yes (sorry bartenders).
4. Under Pricing
In an ideal world, our bar managers are checking product prices and updating prices or adjusting recipes accordingly to stay at a desired cost.Unfortunately, most bar managers don’t have the time to check every single item’s cost against previous weeks or know that price changes could lead to an issue.This one it very common and can have you vastly underpricing your menu.
5. Theft/Thirsty Employees
The “shift drink” some call it.Whether a sanctioned benefit of your business or not, these beverages can be throwing off your inventory numbers and sending your cost of goods sky high.