Category Archives for "Bar Management 101"

Restaurant Health Inspection: Are You Ready?

How come nobody talks about the sexiness of health codes, with all the mold and fruit flies and the prevention of rat feces in the work place?

Guess I’m by myself in that space.

Nevertheless, you had better make sure that your bar/restaurant is up to code when it comes time for your next health inspection or the consequences will be substantial, including shutting down your business.

Remaining up to code isn’t that complicated, but it does require you putting a cleaning system in place and some elbow grease.

And of course, you must know what to look for, which is why I created The Ultimate Health Inspection Guide, complete with checklists, so you can ensure that your bar/restaurant stays up to code, and most importantly, that none of your guests get sick.

To get your guide visit the Resources page here at Barpatrol.net and simply download the PDF, print it out and hang it on your wall or tack it to your forehead. Whatever you need to do to get it done.

And don’t forget to delegate cleaning tasks to your staff so you aren’t taking all this on yourself. Simply include it in the daily, weekly and monthly sidework, and dole it out amongst your minions.

Shock the shit out of your next health inspector and show him/her you know exactly what’s up when it comes to running a sanitary business.

Cheers, until next time,

Dave

3 Bar Inventory Auditors Reveal Their Massive Success…

Real People, Real Stories From Those Who Had Enough And Decided To Take Action

MEET SIMON RODRIGUEZ

Simon worked at the same cantina in Phoenix for 17 years until he finally decided enough was enough and started searching for another career. He contacted me about 9 months ago, signed up for the Master Course and he is currently performing full-service inventories for 8 bars and earns just under $100,000 per year while only working 30 hours per week.

MEET JAMES MOORE

James was a GM at a major corporate chain and was actually let go because they closed down in his location, which meant James needed something FAST. And that’s exactly what he did. He acted fast, and after completing the Master Course, he started landing clients within the first month. He has built his business to 16 clients now because he hired and trained two inventory technicians to count 6 of his inventories for him.

James now earns nearly $150,000 per year and is able to spend his weekends doing his favorite hobby, which is flying his family around in his single-engine plane.

MEET DIANE CLARK

Diane was a head bartender at a local sports bar in Austin, Texas and shortly after her 35th birthday she could sense that “dead-end career” feeling creeping up on her, so she signed up for the Master Course and while still bartending at night, she slowly built her bar auditor business one account at a time until she eventually had 6 clients and was able to quit her job bartending.

As of April 2017, Diane was servicing 9 accounts earning $108,000 per year and is now preparing to hire inventory technicians to grow her business even more.

There are literally TENS-OF-THOUSANDS of bars that need help (90% of bars still use clipboard and paper to take inventory) and only ONE of you.

The competition is practically non-existent, which means you can build an inventory consulting empire in your area.

The good news is that anyone who has some industry experience or who is an entrepreneur at heart can do this. If you can count, are decent at math and have good attention to detail, you can do this job. Dozens of my Master Course students have proven just that.

CLICK HERE TO DOWNLOAD THE BAR AUDITOR’S HANDBOOK FOR FREE – This is the 8-Step Business Plan For Building a 6-Figure Liquor Inventory Auditor Business

Thanks again for stopping by. I hope to see you on the other side.

Cheers,

Dave

How I Make $150 Per Hour As Bar Inventory Auditor

*(At the end of this article, grab a FREE copy of my latest book, The Bar Auditor’s Handbook: The Undergound Playbook for Earning $150/Hr. as a Bar Inventory Auditorwhich shares the exact blueprint system I used to build my 6-figure auditing business)

I have no idea who you are, how happy you are with your current career right now or how you got here, but what I do know is that in the summer of 2010, I was at the end of my rope.

I’m talking curled-up-in-the-corner-sucking-my-thumb end of the rope.

After spending two decades working in bars for tips and managing uninspired employees, I took a look around and suddenly realized—as many hospitality workers do—that the path I was headed down was aimed directly at dead-end brick wall with very few options that would help me avoid the endless late nights and relying on 18% gratuity to pay for my retirement.

Be honest:

  • Almost nobody wants to work in a bar/restaurant forever.
  • Almost everybody has to work weekends or late nights.
  • Who wants to be told they can’t ask for weekends off because it’s too busy?

I don’t mean to be overdramatic here, but in 2010 I had a 7 and 5-year-old in school and my wife was a school teacher at the time, which meant as soon as they got home, I was off to run the bar at night. I never saw them. My kids were growing up fatherless and my quality of life was in a downward spiral.

At one point, I literally went into breakdown mode. I’m talking on the verge of divorce. I’m not going to go into the full story of how one hot August afternoon in 2010 I chucked a stenograph machine right through my sliding glass door which caused a large chunk of glass to be lodged in my forehead. Just know that after attempting a handful of other careers and business start-up ideas, the reality of being pigeon-holed in a late-night career hit me hard. I had a family now and as we all know, as lifers, once you go into the bar and restaurant industry, it’s not that easy to get out.

Finally, in the summer of 2010, just after I hurled the stenograph machine through the glass and just before I was ready to shove an ice pick in my eye socket, my wife, still looking for a solution to finding me a new career, came across a company called Bevinco that helped bar owners make more profits by providing inventory auditing services.

Bevinco (now called Sculpture Hospitality, a horribly confusing name that must have been decided upon during the latter stages of a beer pong tournament) was a franchise that trained its franchisees to become bar inventory auditors and help bars save money by using their software to count and weigh bottles and kegs to find out how much the bar was losing in profits because of bartender over-pours and theft.

Shortly thereafter, my wife and I found a 2nd company doing the same thing called Barmetrix, and as soon as I understood what they were doing to help bars, I told my wife, “I can do that. I can weigh bottles and count shit. I can TOTALLY do that.”

So I clicked around their websites and eventually discovered that they could teach me to be a bar inventory auditor for the bargain price of $50,000 – $60,000!

$60,000!!? Who has $60,000 lying around to invest? Doctors? Bankers? Certainly not bar managers.

So instead, I spent the next 18 months working my ass off, experimenting with remedial inventory software. I practiced taking hundreds of inventories before turning my attention to finding clients who needed my services until I finally started gaining some traction. Once I did, my momentum was unstoppable.

I went from bar to bar, simply having conversations with dozens of bar owners/managers, discussing their pain points and asking them questions.

As a result, my portfolio of accounts grew rapidly, from dive bars to sports bars to lounges and clubs, all the way to corporate giants like P.F. Chang’s and Outback Steakhouse. With the blueprint system I had developed, I was landing clients like crazy.

My income soared. There were literally thousands of bars that needed help, and I had yet to come across one bar that had met someone like me.

There was absolutely ZERO competition.

Thus, Bar Patrol was officially born and it was thriving.

In 2012, I partnered with my brother-in-law, borrowed A LOT of money and had Bar Patrol App built by a brilliant development team. I now had my own cutting-edge app and online software that was bringing faster and more accurate results than ever to my clients.

18 months after my August 2010 meltdown, I was maintaining 8 – 10 full service clients at all times and because I had become so efficient, I was earning about $150 per hour and $8,000 – $10,000 per month.

The money flowing into my life was beyond my wildest dreams. Entrepreneurship was good!

Subsequently, I started vacationing with the family and I was able to go to barbecues at friends’ houses on the weekends because I wasn’t in a bar working until 2:00 a.m.

And the pride I felt about my career was (and still is) absolutely surreal.

I don’t say any of this to brag. Quite the contrary. After spending years of gloom looking for another career, the gratitude I feel is beyond description. For once in my life, I finally felt successful.

What’s the point to all this?

The point is, if you’ve been in the industry for years and feel like you’re stuck, just like I was, as well as thousands of others who make a decent living in this industry but suddenly realize one day that the future is quickly becoming the present, and if they don’t do something quickly to change their present, their future will be working in a bar when they’re 60, serving white zinfandel to a bunch of old ladies playing bridge in a hotel bar lobby.

Where are you in your life right now? Where are you headed? Do you have the freedom to do the things you want?

I imagine you and I are very similar, the only difference being that my pain become so great that I HAD to do something to change my life, so I spent 18 months crawling through the mud and shit to figure this business out on my own.

To sum all of this up plainly: I teach people to be me…without the crawling through shit part of course. You simply get the benefits of learning from my experiences.

If you are like me—and countless others—who feel that restless pain I’m talking about, and you have always despised the idea of working in an office, sitting at a cubicle clacking away on a keyboard…

…then you might want to find out a little more and see if becoming a bar inventory auditor is the path for you too.

If so, I’m offering my latest book: The Bar Auditor’s Handbook: The Underground Playbook for Earning for$150/Hr. as a Bar Inventory Auditor for FREE to those who find this page.

In it I provide the EXACT blueprint system I used to build a 6-figure bar auditor career.

So, if you feel like following me down the rabbit hole to see if this is the right career path for you, and you want to make more money working fewer hours and no weekends.

CLICK HERE TO DOWNLOAD YOUR FREE COPY OF THE HANDBOOK

This is the 8-step business plan I used to build a 6-figure business within just a few months.

Or, if you just stopped by for a casual read while sipping a Lynchburg Lemonade on the front porch, I wish you the best of luck in whatever you choose to do in your life. I really do. Just don’t choose mediocrity or you too might chuck something large and heavy through your sliding glass door one day.

Cheers, until next time,

Dave

What Should Your Pour Cost Percentage Be?

pour cost percentage

I hear the same thing from owners and managers everywhere I go: “My pour cost percentage is fine. Why would I need your system?”

Simple, sir (or madam)…because you are blind to what is going on behind your bar.

First of all, most owners have no idea if their pour cost percentage is fine or not because they don’t know what’s causing it to go up and down. Many feel that if they are at 22%, then they are doing just fine, but in reality they have no idea.

Second of all, I find that many owners don’t want to know what’s going on behind their bar. It’s absolutely insane to me that you wouldn’t want to know what’s going on in your business, but I see it time and time again.

POUR COST % VARIES GREATLY ON MANY FACTORS, INCLUDING:

  1. What you price your drinks at
  2. Bartender theft
  3. The accuracy of the inventory count
  4. The amount of happy hour or discount specials you sell
  5. Which product the guests order to drink

And it’s the last one that owners and managers rarely take into account. Since you cannot control what your guests order, you cannot possibly determine the financial stability of your bar based on pour cost % because it is going to bounce around simply based on your sales mix.

For example, well liquor typically runs at 5 – 10%, while premium products can be 18%, 20%, 25%, 30% or higher. Wine runs 30 – 35%, beer at 20 – 25%. Every bar is losing money on martinis. How in the hell are you supposed to determine if your bartenders are over-pouring when the products you pour run from 5% – 35%? Did your guests order a lot of wine last month, or mostly draft beer? Did they order 30 shots of Don Julio 1942 at $25 per shot and a 27% pour cost, or did they order 200 shots well tequila at 6%?

The point? You can’t possibly monitor what’s going on in the trenches behind your bar using pour cost % because pour cost % involves so many more factors than you can keep track of.

IS YOUR POUR COST TOO HIGH?

YES! That’s the answer. There is no maybe about it. If you only use pour cost % to monitor the financial health of your bar, you are missing out on tens-of-thousands of dollars—possibly hundreds-of-thousands of dollars—of profit per year, depending on the sales volume of your bar.

The reason: 95% of bartenders steal! That might sound harsh and over exaggerated, but stealing is not simply skimming money from the register. Stealing includes anything the violates the standards that are set in a bar, including giving away free drinks, drinking on the job for free, over-pouring, and pouring premium products but ringing in a lower priced product in order to make a better tip. Whatever your pour cost % is, it should be at least 4 percentage points lower. I guarantee it. Owners are missing out on so much profit it’s sickening.

THE TRUTH ABOUT UPSELLING

Is upselling to a premium product good for a bar? Most owners would say yes. And they’d be right, because premium products bring in a higher profit, but if you solely use pour cost % to determine if your bartenders are over-pouring, there is no way they will ever upsell to a premium product ever again because the sale of premium products raises your pour cost %. Take a look.

WELL VODKA

Ideal PC % = 5.33%

Wholesale cost of bottle = $6

Retail cost per shot = $5

Retail sales per bottle = $112.50

Profit per bottle = $106.50

 GREY GOOSE

Ideal PC % = 17.78%

Wholesale cost of bottle = $36

Retail cost per shot = $9

Retail sales per bottle = $202.50

Profit per bottle = $166.50

But why would your bar and serving staff ever want to upsell if they are being questioned about the pour cost %?

 VARIANCE PERCENTAGE: IT’S THE ONLY WAY

When it comes to monitoring profit and loss in a bar, I am very religious about using variance % to determine if the bartenders are following the prescribed standards (assuming any exist) set by the owner and managers.

What is variance %? Variance % measures the difference between what is poured by the bartenders to what is rang into the POS system. In other words, if a bar’s shot portion is 1.5 oz. and 10 shots of Jameson are rang into the POS system, then ideally, the amount poured by the bartenders (expected usage) should be 15 oz. (1.5 x 10 = 15). But if 25 oz. are poured instead (actual usage), the bar is missing 10 oz. (usage difference) or 6.67 shots of Jameson, and if Jameson is $7 per shot, the bar just lost $46.69 in retail liquor.

HOW DO I FIGURE VARIANCE %?

Variance % = Usage Difference ÷ Expected Usage x 100

So in the above example, the variance % would be 10 oz. (difference) ÷ 15 (expected) x 100 = 66.67%. And in case you didn’t know, 67% variance is bad!

WHAT SHOULD MY VARIANCE % BE?

My goal is to get my clients down to 5% – 7% variance, but if we can get the variance into single digits, the bar will save thousands, and that’s because the average beginning variance % of the bars I work with is 34%. That means the gap between what is being poured to what is being rung into the POS—or what is missing—is one-third.

WHY YOUR POUR COST IS DIFFERENT EACH MONTH?

My client realized that their bartenders had been routinely over-pouring and not ringing up drink sales, for months, years, probably decades. His focus on keeping the pour cost in the 19% to 21% range was counter-productive. It had actually prevented them from discovering the high losses – and from making a lot more money.

HOW MUCH MONEY ARE YOU MISSING?

As I’ve mentioned, the losses are staggering, and nearly every owner I work with nearly falls over in his/her chair when I show them how much money they are losing in a one week period. They have no idea.

Over-pouring is by far the biggest problem in every establishment. Just eliminating the over-pouring saves the bar a substantial amount of money. In fact, the average client of Bar Patrol loses more than $2,200 per week…$8,800 per month…$114,400 per year. That’s a lot of money to be turning your head the other way and hoping that your pour cost % is low enough.

HOW CAN YOU REDUCE YOUR POUR COST %?

Raising prices lowers your percentage, but it also lowers the number of guests coming into your bar. You could sell the hell out of well liquor. That will certainly reduce your pour cost %, but as mentioned above, you will earn less profit which is a ridiculous financial strategy because we all know that you put money in the bank, not percentages.

The best way to reduce your pour cost is to focus on eliminating the over-pouring and lost sales that plague virtually every bar in the world.

The most important step is to find out exactly how much alcohol you are missing, and the only way to do that is to have a system with proper software in place that can account for it. Only with the correct information, can you be sure your pour cost is as low as it should be and that you are saving the most money. Any other way, and you are a fool who will soon part from his aforementioned money.

THE HARD TRUTH

The truth is, if you don’t carefully track your inventory, you can’t measure it, and if you can’t measure it you can’t monitor it, and if you can’t monitor it you have no idea where the leaks are occurring, and if you don’t know where the leaks are occurring how are you supposed to run a successful business? For owners who run a bar like this, failure is imminent, and if not failure, then certainly mediocrity.

As I always say, don’t be a bar owner, be a business owner.

2 10 Awesome Novelty Drink Ideas For Your Bar

If you haven’t read WHY you should find a novelty drink for your bar, go back and read 7 REASONS YOU SHOULD CREATE A NOVELTY DRINK FOR YOUR BAR.

If you don’t need any more convincing and are ready for some ideas so you can get started creating buzz at your bar, let me share with you the best 10 novelty drinks I have had that I couldn’t stop thinking or talking about with other people.

1. The Big Ass Mule.

I have to put this at #1 because it’s the one we chose for our bar. Not to mention Moscow Mules popularity has spread faster than the zombie population on The Walking Dead. The way we do it is to fill the 96 oz. cup with ice, add 4 oz. of lime juice and empty a 12.68 oz. bottle of Tito’s into the giant mug. Then top with ginger beer. One of our biggest sellers, especially on the weekends.

 

2. THE OUTRAGEOUS BLOODY MARY

I have a blog post on this on the Barpatrol.net website you can read if you want which gives examples of awesome novelty Bloody Mary cocktails.

The 5 Best Bloody Marys on the Planet

The point of this is to create an outrageous Bloody Mary with a great recipe and then pile food that is unique to your place on top. This is definitely one of the most effective and memorable novelty drinks you can serve at your bar. People will talk about it constantly and you will be known as THE place to go for a fantastic Bloody Mary.

 

3. THE YARD STICK

Las Vegas is the yard stick’s native home. You see these things everywhere. Frozen drinks in a skinny tube with a wide mouth up top and a giant straw to ensure you acquire the most painful brain freeze possible.

Most of the yard sticks you find have frozen drinks inside, so you’d need a blender or a slushy machine, but the more practical way to serve them would be on the rocks.

 

4. GIANT MARTINIS

You can order these glasses online and put about anything you want into them: Lemondrops, Cosmos or any fruity martini that people would love to share.

 

5. BLINKY MUGS

These are native to New Orleans and usually involve some sort of hurricane or zombie-type cocktail. These work great in New Orleans because people can walk down the street with them and everyone says, “Where did you get that,” and then they tell them the name of the bar which sends people there.

Problem is, you can’t do that in most places, but people will still talk about and remember the blinky-mug cocktail they saw on Facebook.

 

6. BLINKY OR LED ICE CUBES

This is a bit different because we’re not talking about the container for once. The advantage is that you can put them in just about any cocktail to liven it up which gives you more flexibility on which drinks you want to highlight, and they have the same effect as the blinky mug and the string of yarn your cat can’t ignore.

 

7. THE SKULL BOWL

The skull bowl is perfect for any bar with that hard core rock n’ roll ambience and image. There’s nothing more badass and tough as nails than drinking a Fuzzy Navel out of a skull.

8. BEER TOWERS

Beer towers are a major novelty attraction. In this day and age of draft and craft beer popularity, if you can serve beer towers that people can take back to their tables, you will be the talk of the town. Not to mention it makes your bar more efficient and the service faster because your bartenders won’t have to pour pint after pint. Simply hand out a tower and that group of four is good for an hour. You can actually do the same thing if you serve sangria in your bar.

 

9. FISHBOWLS

Yep, you can serve these with actual fake goldfish in them. This creates terrific novelty. And I have a bonus idea for you: in my e-book, The Big Black Book of Bar Promotions, I mention gold fish races as one of the promotions, which was one of our biggest successes at my bar.

You can marry these two together to have gold fish races and gold fish cocktails to go with it. If you organize this, you will create an incredible draw. I promise you that.

 

10. THE WATERMELON BOWL

In order to pull this one off, you’ll need to order plenty of watermelons, but people love this giant cocktail for sharing. What type of cocktail you put in it is up to you. You can also pump a watermelon full of vodka and serve the pieces, followed up by serving a cocktail in the bowl, so you’re able to double your profits by using all of the watermelon.

 

That’s all for this edition on novelty cocktails. If you have any awesome novelty cocktails you want to add, let me know.

Cheers, until next time,

Dave

 

1 7 Reasons You Should Create a Novelty Drink For Your Bar

For those of you new to the subject of novelty bar drinks, they are the equivalent of a cat chasing after and swatting at a piece of yarn you dangle in front of it.

Stupid cat. I own one myself (not by choice) She sits there with that superior-to-the-rest-of-us attitude, yet the moment there’s movement, she just can’t help herself. She tries to pretend she doesn’t care, but like an addict with a line of cocaine sitting on the table, she eventually can’t stand it anymore and pounces on it.

It’s quite entertaining to watch, and in the same way my cat is attracted to it’s precious yarn, people are enthralled and fascinated by novelty drinks.

First off, let’s define what “Novelty” actually means. Novelty is defined as:

  1. The quality of being new, unique or unusual
  2. A small or original toy or ornament

Novelty drinks fit both of these definitions. They are both unique and a sort of toy for your guests to drink from.

If you have never considered adding a novelty drink to your cocktail menu, I’m here to give you 7 reasons why you should.

 

7 Reasons You Should Create a Novelty Drink For Your Bar

1. They are flat out fun. It’s true. Like the cat with her yarn, it seems like a pointless endeavor, yet when people are drinking out of a novelty drink, everyone around them seems to be laughing and enjoying themselves. Why is that? It’s because of reason number 2.

2. They are unique and unusual. Something that all of us have in common is the need to break away from the monotony of life. This is why we go on vacations or try new restaurants. Or have a baby. We want excitement and something that breaks us out of our normal routine.

3. They give us identity. What does that even mean? It means people love to stand up and announce to the world who they are. It’s why they put idiotic bumper stickers on their cars that will never come off (“Don’t blame me, I voted for Bush”, “Teachers do it with class”, etc.).

It’s why they wear the clothes they do and drive the cars they drive. And it’s why they choose to drink something that they can post on Facebook that says, “Look at me, I’m outrageous and fun.” (See number 5)

4. They give your bar identity. It’s true. For instance, at my bar, we are Home of the Big Ass Mule. When people talk, they say, “Where were you drinking that Big Ass Mule last week?”

“Oh, that was McGah’s Pub & Pianos. Awesome drink, great times. We should go there tonight.”

5. They will be shared on social media. Think about it: people LOVE to tell everyone what they’re doing every single minute of the day on social media sites: “Picking up some heart-worm medicine for Buster at Walmart.” These same people won’t be able to wait to show everyone the cool and unique drink they’re sipping at your cool and unique bar. This is free advertising. Which leads us into number 6.

6. They will create word-of-mouth marketing. Not only will people share their experience on FB, they will talk about it the next day or even week to people they know: “OH MY GOD! I was at The Rusty Nail on Friday and they had this giant hurricane that four of us were drinking out of. It was SOOOOO awesome!”

7. They are profitable. That’s right, even though it would still be worth it based on all the attention your bar will get for serving something so cool, you don’t need to spend a bunch of money to make it happen. Giant drinks (or even regular drinks) can have controllable portions that will make you as much or more profit as your regular cocktails. This reason alone should get you excited to bring on novelty drink. Profits are the main reason we’re in business in the first place.

If you’re foaming at the mouth now to find a great novelty drink you can use to create an identity at your bar and you need some ideas, check out 10 AWESOME NOVELTY DRINK IDEAS FOR YOUR BAR.

Cheers, until next time,

Dave, The RB

Your Bar Manager Sucks!

Many people may not know this about me, but I’m on a committee to pass a bill that requires bar managers to do “management ride-alongs” with other successful managers before they are allowed to get hired as a bar or restaurant manager.  Alright, I lied.  After all, committees are hard.

It wasn’t until I started my business five years ago that I really started paying attention and putting managers under a microscope, and since then the lack of leadership and accountability I have witnessed has started me down a rabbit hole of madness. I’m talking curl-into-a-fetal-position-and-suck-your-thumb kind of madness.  Forget postal workers. Apathetic bar managers incite me to be 21 times more likely to carve someone’s eyes out with a salad fork than a mailman.

I can only compare it to Chinese water torture (drip, drip, drip).  That single drop splashing on your forehead is nothing at first, but witnessing bar managers leaning indifferently on the end of the bar for an hour without moving adds up until the tension becomes so unbearable I want to take a cast iron frying pan to my face until sweet unconsciousness envelopes me.

Alright, perhaps that’s a bit melodramatic, but I’m done with this shit. I’m done with that manager who is as effective as a homeless tramp who has wandered in off the streets because all he does is hang out at the bar all night flirting with girls and pouring shots for them every few minutes, which he never rings up. Every time they have a shot, he joins them and then tells the bartender, “I got those,” even though he doesn’t “got them” at all because it’s the owner who has “got them” and who is paying for them. And whenever there’s a problem with a guest at a table, instead of walking over and actually engaging the guest in conversation, maybe making things right, he simply cranes his neck like a drunken giraffe in the direction of the upset table but never actually walks over. Instead he orders more shots for the girls at the bar and then creepily lowers his hand to the small of the closet girl’s back.

I’m telling you, I’m done with them. I’m done with owners and managers telling me, “Well, taking care of our regulars and giving away a few drinks is just the way our industry works.” Bullshit! That’s the way 85% of bars go our of business in our industry. THAT’S the way this industry works. I’m done with them, and so should you.

Now you believe me about that postal thing, don’t you? (Drip, drip, drip)

THE 5 NOT-SO-GOOD, THE BAD AND THE UGLY WAYS YOUR MANAGER IS WRECKING YOUR BAR

So what exactly are your managers doing to wreck your business? I have a hunch that deep down you already know, but you’ve been ignoring these issues because you have your own balls to juggle, and adding another ball into the mix by firing, hiring and training someone new is about attractive an idea to you as climbing naked through a field of razor wire and red army ants.

However, you can’t continue to ignore the giant elephant staring right at you, and whether you want to believe it or not, much of this neglect is going on when you’re not there. Many managers are masters of deception, like Eddie Haskell from Leave it to Beaver. Remember him? He’d be nauseatingly sweet to Wally and the Beav’s parents face-to-face and then when they left he’d turn into the most devious little shit you’ve ever met.

From my experience, there a number of ways bad management will cancer your bar/restaurant right out of business, but I’ve narrowed it down to the five most detrimental behaviors that are preventing you from being a happy and successful business owner.

1.  Your manager is too close with the staff.  Being friends with the people you’re supposed to be a boss to is a Kryptonite to a manager’s authoritative powers. Staying on top of unproductive or inappropriate tasks is a key responsibility in managing a business, and if the manager isn’t willing to have those difficult conversations, it’s a detriment to the operation of your business. Worse yet is when he/she starts sleeping with the staff. No industry has employees hook up more than the bar/restaurant industry, but my rule is: once you take on the job as manager, no dating/boinking within the ranks. If you don’t adopt this policy, you will regret it.

2.  They sit in their office on Facebook instead of making warm-fuzzies with the guests. Your manager’s job when you aren’t there is to be the face of the bar/restaurant. To interact with guests and keep employees on task. When you find him/her in the office every time you come in, that’s bad, even though they will convince you that they were “making the schedule” or “ordering liquor” or “doing payroll”. They’re up to no good when they spend too much time in the office. They need to be on the floor.

3.  They give away free drinks/drinks him/herself. You’ll need to straighten and brace yourself for this one. If it makes them look good, your manager will use his/her authority to give away whatever they want to guests. They especially know they can get away with this with no inventory management system in place. It’s bad enough to have to worry about your bartenders. You shouldn’t have to worry about your bar manager as well. And believe me, their doing it when you’re not there.

4.  They fail to enforce or support the standards and systems that have been put into place (basically leadership in general). First of all, if you don’t have specific standards and systems in place, your first order of business is to sit down and draft those out. Second of all, you’d better make sure your managers and entire staff understand that those rules and standards are law. It’s your job to enforce your standards to the enforcers or they will never do the same for you. It’s a tough question to answer, but if someone were to ask me the most important factor for succeeding in this industry (listen up here), it would be enforcing the standards of the bar/restaurant. Without accountability, businesses go to shit.

5.  The manager is your friend. This might difficult for you to hear, but similar to #1 on this list, if you are too close to your managers to be the boss, trouble is coming. You are trusting him/her and putting the business in their hands, so in your mind it’s inconceivable to you that they would do anything to hurt you. But the truth is, they don’t do it to hurt you. They do it because they are unmotivated and they have not been properly trained. Even if the manager is your friend, you need to have those conversations with him/her to make it clear that the standards that have been set are expected to be enforced. If you are not firm with your managers, they will take advantage by doing a very mediocre and uninspired job of running the business.

Your managers should be an extension of you. Take a minute to step back and make the decision to set high standards, not only for your bar/restaurant, but for your entire staff, and then have regular meetings with your management to review how well they’ve been enforcing those standards. Without monitoring and evaluation, there is no improvement, and without growth stagnation sets in. At that point, your on a path to doom, or at the very best mediocrity.

Best of luck to all.

Cheers, until next time.

The RB

How Much Are Regulars Costing Your Bar?

One thing you should know about me: I love Panda Express. So much so that they should probably sponsor my website and give me a free Panda t-shirt, because I’m there all the time, to the point that it’s a bit embarrassing really. As I was standing in line yesterday waiting to order, the lady behind the glass yelled out, “Hi, Dave. Orange chicken again today?”

The people in front of me turned around and looked at me as if to say, “Seriously? The Panda Express lady knows you by name?”

“You know it,” I yelled back awkwardly to the lady, whose name I shamefully did not know. Two of the people in line gave disbelieving head shakes, but they can F-off. I stand by my obsession, which had just been oddly intensified by the lunch-line lady who made me feel important and special.

At this point my ADD brain started thinking about regulars. The word itself belongs to the bar industry for the most part, but really regulars are nothing more than repeat customers and they exist in all industries. Yet, our regulars are the only ones getting shit for free. When did that all start? Why is it ok to give away products in the bar industry when nobody would ever expect the Panda Express lady to hook them up with free fried rice or honey-glazed shrimp? Perhaps if we started tipping them things might change, as this introduces an entirely contrasting dynamic in the business of customer relations. That’s another topic though. I get distracted easily.

REPEAT BUSINESS IS THE CORNERSTONE OF SUCCESS

Back to this idea of repeat business. It’s important. No, it’s essential. Building repeat business is what mega-successful businesses do. However, in the bar industry bartenders, and even bar managers and owners, have abused their power in order to receive special benefits (tips) for the purpose of bolstering their income. Many owners are convinced that in order to survive and compete in the industry that they must not only have their regulars patronize their bar often, but that they need to provide them with free drinks to get them to come back again.

The problem with this business model is that once this precedence is established, there’s no going back, and worse than that, where does it end? In order to make your regulars happy, the amount of free drinks they receive has no boundaries. And without an inventory management system to monitor what’s going on, bartenders will run wild with this. However, because free drinks is an industry standard, perhaps you feel like in order to compete with the bar down the street that you can’t rescind this precedence or you’ll lose your regulars.

So the question that we must ask then, is how much should you be rewarding your regulars, if at all, for their loyalty? Is what you’re giving away worth repeating in order to keep them coming in? Do they really help your business be profitable? Why is it that our industry standard makes it OK to be missing 20-25% of its products month after month while the retail industry is only missing 1-2%? And what happened to gaining repeat customers through relationships and giving them an experience they can’t get anywhere else?

Sorry, I’m like a cat in a room full of strings dangling from the ceiling. I’ll address those questions in another post. In the meantime, let’s analyze the math and find out what a regular is really costing your business.

THE CASE STUDY

To perform this experiment, I asked 15 bar owners three questions. After each question is an answer, averaged out among the 15. These are of course guesstimations from the owners, but it’s far more accurate than shooting an arrow at a zig-zagging rabbit. Running through a thicket. In the dark. You get the point.

It’s important to note that I only went to bar owners who admitted to comping drinks for their regulars. I have clients who do not give drinks away, so their data is not included. I only wanted to analyze the bars who use this method to bring in business.

  1. How many days per week does a regular have to come in for you to consider them an extremely valuable regular?  Avg. Answer: 3.34 days
  2. Of these extremely valuable regulars, how many drinks do they order per visit?    Avg. Answer: 4.12
  3. How many drinks do you and/or your bartenders “comp” them? HONESTLY.  Avg. Answer:  1 for every 3.89 drinks or 25.7%

So using this data, however loose it may be in its accuracy, let’s hypothesize and contemplate and infer, like Harvard and Columbia do when they perform highly scientific case studies. So we know that the average customer comes in 3.34 days per week, orders 4.12 drinks and are given 1 free drink for every 3.89 they order. Here we go. Are you excited? Me too!

THE SCENARIO

In walks Jimmy, a regular, coming in to knock a few back at his favorite watering hole. Jimmy is a brand loyal Grey Goose man, so during his visit, he orders 4.12 Grey Goose and tonics at $9 apiece. He is a good tipper too, so the bartender gives him one of those drinks “on the house”. We also know that throughout the weeks and months that Jimmy will wander in 3.34 times per week to have his 4.12 Grey Goose and tonics which totals 13.36 drinks per week.

Based on this ratio, Jimmy will receive 3.43 free drinks per 13.36 he orders. To understand how much is being lost, we need a little bit more math and data. Bare with me, we’re almost done with the foreplay and getting to the part where we take off our clothes and get dirty.

At 1.5 oz. per drink, and at $36 wholesale cost per bottle of Grey Goose, each drink costs the bar $1.60 wholesale. So 13.36 drinks ordered should cost the bar $21.38 total and should bring in $120.24 retail ($9 x 13.36) for a liquor cost of 17.78%. However, 3.43 of those drinks are being given away, and here’s the most critical question an owner needs to ask him/herself: Does that mean the bar lost $5.49 wholesale (3.34 x $1.60)? Hell no! Those 3.43 drinks were not accidentally spilled or wasted. They were given away by choice and could have been sold, so the money lost here is money lost at retail for a total of $30.06 (3.34 x $9).

This is a significant component to consider. Bar owners need to consider what is being lost at wholesale (drink spilled, made wrong, guest didn’t like, etc) versus what is being lost at retail, which is anything that could have been sold but was given away by choice. Without factoring in these factors, owners are fooling themselves into thinking they have a better pour cost percentage than they do.

THE UNVEILING

Revelation time:  Jimmy orders 13.36 drinks each week which costs the bar $21.38 wholesale. The potential retail sales are $120.24, but instead he gives your bar $90.18 for the 10.02 drinks he actually pays for (13.36 ordered  – 3.43 given away = 10.02). So now the bar has lost $21.38 + $30.06 potential retail income. So those 13.36 drinks ordered each week have actually cost the bar a total of $51.44.

Translation: It cost you $51.44 for Jimmy to give you $90.18 for a profit of $38.74 and a pour cost percentage of 57%!!!  And don’t even get me started on how heavy-handed the pours are for regulars. If Jimmy receives 2 oz. pours (or more) instead of 1.5 oz. pours, the cost keeps rising and rising.

Hmmmm…doesn’t exactly seem like a model for success does it? No wonder 85% of bars fail within 5 years. So what’s the answer?

Conclusion: Lead a revolution in your business with a foundation that is built upon relationships and customer experience instead of marketing to your customers the lazy way: Giving free shit away. It’s simply a recipe for disaster. If you want to reward customer loyalty, fine. But make it 1 in 10 drinks instead of 1 in 4, and make sure that you are setting the standards and not your bartenders. As we all know, there are no honest bartenders.

That concludes our experiment. I don’t know about you, but Harvard and Columbia can suck it! That was one AWESOME case study. And to think I went to Chico State.

Cheers, until next time.

Dave, The RB