If you are looking for ways to increase your bar profits substantially, today I have a gem for you because I’m going to share with you the exact same program I use, and have been using over the past few years, to accelerate your bar profits instantly.
And when I say I’ve been using them over the past few years, I mean that when I started Bar Patrol, I used to go door to door, walking into bars and selling my services to save them a ton of money. It started with just counting and tracking their inventory to prevent bartender over-pours, but from there, I kept learning and adding strategies to save them even more money.
The best part is that these are simple, yet highly effective techniques and strategies you can implement easily into your bar management and beverage program that are going to give you immediate results and have a huge impact on your success. Seriously, you’re going to look like a bar management genius.
Bar Profit Maximizers
Now, if you want the extended version of these tactics that go into greater depths and details, you are welcome to download my bar management guide on this. It’s called Bar Profit Maximizers, the 12-step program or guide that will change the way you run your bar. It’s about 100 pages, so it’s a very easy read, and it breaks down each of these concepts one-by-one, and it’s yours for free. Because I love you. In a non-creepy way.
So just click the link here and you’ll see it on my resource page with a lot of other cool stuff. You can also check out my youtube channel for more free information on how to run a better, more profitable restaurant or bar business. Got it? Excellent.
So let’s dive in and start working on increasing your efficiency and your profits in your bar. I’m going to quickly cover 7 of the 12 strategies from the book. These same strategies I implement when I first walk into a bar to evaluate it in order to help the owner and manager determine the blind spots where we can help improve things.
You’ll have to get the book for the other 5 strategies. I know, I’m such a tease.
7 Ways to Increase Your Bar Profits Overnight
Step 1: Glassware
Glassware might be something that you probably haven’t put too much though into when it comes to increasing your profits. You’re more concerned with how cool it looks, but when I walk into a bar to I evaluate things, I usually don’t say anything about the style of the glassware unless it looks like it came right out of the Brady Bunch era.
I’m looking at is the size of the glasses because when it comes to making your guests happy, perception is everything. What happens with these big giant beautiful glasses you ordered from the catalogue is that when you pour a normal shot into them and fill the rest with mixer, the guests can’t taste the alcohol. Then what comes after is an entire episode of the guest whining and complaining to the bartenders that there is no liquor in the drink. This happens so much that the bartenders soon become weighed down by negativity, so in order to avoid being bitched at, they pour heavier so the guests can taste the alcohol and now you are bleeding money from the heavy over-pours. All because you had to have gigantic glassware.
The solution? Well, of course the answer is to order beautiful glasses, but smaller glasses. Inside Bar Profit Maximizers (It’s free) I have all the glass sizes I recommend you buy that are the perfect size for both you and your guests. I believe I have 7 different glass types that provide glass sizes for. In that section I also go over how much ice you should be putting into the glasses.
And, if you do not carry shot glasses, or you allow your bartenders to pour shots into rocks glasses, stop that policy right now. Pouring shots into shot glasses is going to save you a significant amount of liquor and money. I show you why inside the book. I simply don’t have time here to cover every single detail because you have things to do, so let’s move on to step 2 which is…
Step 2: Portion Size
Now, it sounds obvious to have your portion sizes set, but you would not believe how many times I ask an owner or manager what their portion sizes are for mixed drinks, rocks, doubles, wine, the drinks on the cocktail menu, and they look down at their feet uncomfortably and admit that they aren’t really sure exactly.
Having regimented portion sizes is crucial to lowering your pour cost percentage and increasing your profits. If you let the bartenders decide what the portion size is, you might as well get a job selling colorful ribbon at Hobby Lobby, because you were not meant to manage. It is your job to set the standards and then enforce the standards. This is also true in your kitchen, not just your bar. You should have regimented portions set for each one of your food dishes, but in this episode we’re just talking about bar portioning.
Again, inside Bar Profit Maximizers I have all of my recommendations for portion sizes including shots, mixed drinks, neat/rock pours, martinis, wine, port, all of that so you can make sure you are maximizing every drop you get out of each bottle.
In addition, I also go over whether you should allow your bartenders to free pour or not, and if you do, I show you what you need to do to train them on free pouring so that they are capable. Ok next we have…
Step 3: Deadstock
This is another area that most owners and managers do not put much thought into when it comes to helping them run a more efficient and profitable bar, but I’m going to tell you right now that deadstock is a disease that is infecting the success of your bar.
I guarantee that if you walked into your storage room right now, you would find bottle after bottle of crap that has been sitting there for months, if not years. All because you have this idea that someday you will do something with it, but we both know that your deadstock is exactly the same as those shirts hanging in your closet at home that you never wear. You tell yourself that someday you just might put one of them on, so you don’t throw any of them out.
The problem is, your deadstock causes more problems than your dusty shirts. Here’s why:
- It Ties Up Capital. Don’t order cases of something just because you got a deal on it, unless it is a high-volume mover. Trust me on this one, you don’t need three cases of white crème de menthe. Stay lean, because you can use that extra money for more important things in your business.
- It’s Taking Up Space. This one is obvious and I can see you nodding through the screen right now because your storage room is probably a nightmare to keep organized, so stop making it harder on yourself.
- It Causes Extreme Disorganization. Because as soon as your storage room is too full, all those absurd brands like Three Olives Fruit Loops Vodka starts showing up behind the bar.
Once again, inside the book, which you can download here for free, I tell you what to do about deadstock, as well as how to actually make a profit from your unwanted deadstock and all those freebies that vendors give you. Next up…
Step 4: Setting Pars
First off, setting pars is a great way to automatically manage your deadstock because it helps you figure out exactly how much you need to order so that don’t run out. But it’s also good so that you don’t order too much inventory, which ties up stock and overloads your storage like we just talked about.
When you have your pars set and use a program like Bar Patrol Inventory App, you can simply run a purchase order and the software will tell you exactly how much to order of every single brand. Then all you do is push a button and the orders are emailed off to your vendors.
Very cool.
Inside the book, I show you how to determine your par levels based on a simple math formula. I also talk about the 15% rule I use to determine how much inventory stock a bar has on hand compared to how much inventory they SHOULD have on hand. It shows you the gap and how far off you are.
Step 5: Sell Premium Products.
Once again, inside the book I go into greater detail about the fallacy of pour cost percentage and why it is so deceiving when
determining the financial health of your bar. And I show you why, when I compare the difference between evaluating cost percentage vs. profits when it comes to selling well liquor vs. premium liquor.
The basic premise is that well liquor lowers your cost percentage, which might make the boss happy, but you are losing profits by not pushing premium liquor. Yes, premium liquor has a higher cost percentage but that’s not what we’re looking for. Determining your financial success based on cost percentage alone is a gigantic mistake. Lower cost percentage is not necessarily always a good thing. The moral of the story here is to push premium products because we do not put percentages in the bank. We put dollars in the bank. You can’t buy shoes for your kids with percentages. The clerk at Foot Locker will look at you like you’ve been bitten by a rabid badger.
Step 6: Inventory Tracking
This, of course is my bread and butter. My wheel house. Right up my alley. My livelihood. My expertise. You get the point.
So even though tracking your inventory properly might seem like a lot of work, it is the low hanging fruit when it comes to instantly increasing your bar profits, as well as getting more organized with your ordering and keep your par levels in line.
Without liquor inventory tracking and monitoring, your bartenders will get Lazy and greedy and do whatever the hell they want, and you will have no idea where the losses are coming from. It’s a fact that bars without an inventory tracking system are losing on average 25% of their profits from theft and over-pours, so you shouldn’t be worried spending $60-$70 dollars per month to save a few thousand.
Of course, we use Bar Patrol inventory app for ordering and inventory tracking, as it can measure losses for every single brand down to the 1/100th of an oz. And that’s because we use our super sleek and sexy Bluetooth scale which has a narrow 2% margin of error. There’s simply nothing more accurate.
I do not have nearly enough time to cover the importance of tracking your inventory in this article, but of course the book covers it all and helps guide you in the right direction if you’re in need of a better way to count and track your inventory. Which brings us to #7 on the list…
Step 7: Spot Checking
Now spot-checking is a short-form of counting inventory. A short cut, if you will. It is a magical process of being able to track individual bartender pours so you can monitor each one of them, and do it in a very short amount of time.
Here’s the gist of it. Choose 5 – 10 of your highest volume products to count before and after a bartender’s shift. Perhaps Susie is working by herself on a Tuesday night. Don’t tell her that you’re going to spot-check her and just let her work her shift. Then after the shift, after you’ve counted the 2nd round, you can run a sales report for just her time working, and upload it into Bar Patrol (or whatever inventory system you are using) and the variance report will just show those 5 or 10 products you counted so you’ll get a sampling of how Susie is doing.
Spot checking only takes about 10 minutes instead of hours counting a full inventory and now you’re able to sit down with Susie and say “Hey, Susie, we love you but let’s take a look at this report. It says here that you rang in 8 shots of Crown but you poured 14 shots. What’s going here? Because we know that Bob, the good-tipping regular comes in on Tuesday nights to see you, and he drinks Crown.”
When they know that you’re watching them, the bleeding stops immediately, and your variance magically drops from 25% to single digits. It’s really quite amazing. Again, more details in Bar Profit Maximizers. I also talk about other powerful bar management strategies and techniques in the book, including maximizing draft beer, item costing, pricing, menu engineering, upselling, reports analysis and communicating with your staff. All sorts of goodies to make you look like the Bill Gates of bar management.
Counting Bar Inventory is a Must
We all know that taking bar inventory can be a pain in the a$$ but if you want to run a better bar or restaurant it is a must. Of course you could do it with a bar inventory spreadsheet, or a bar inventory template, but it won’t be accurate and you won’t really know what is going on in your business. It’s the exact reason why I created my Bar Inventory App. Having a liquor inventory system in place will allow you to really take a look into what is going on in your business and then improve it to put more money in your pockets and we know more $$ is a good thing.
I hope this helped you out a bit today. Make sure to download Bar Profit Maximizers because it is packed with information inside those 100 pages, and it’s free, so you have nothing to lose and everything to gain. I hope you make a million dollars this week. I appreciate you being here. I’ll see you next time. I’m out.
Dave