The Secret to Cost Control That Nobody is Practicing

If you’ve been in this industry for any amount of time, you have at least been exposed to an insane way of thinking that doesn’t exist in any other work force I’ve ever come across. This way of thinking has become so engrained over the years into the minds of owners and managers that it’s difficult for me to penetrate the brainwashing that has taken place and change their way of thinking for the betterment of their establishment.

The mindset I’m talking about from the owners goes a little something like this: “I need to give away free drinks because that’s what bars have been doing for hundreds of years.”

The mindset of the bartenders is: “I need to give away free drinks so I can get bigger tips and buy shiny things.”

The mindset of owners about bartenders is: “Oh well, what’re you gonna do?”

Wake up, stupid! This is a mindset built for destruction. Bars have a unique opportunity to make HUGE profits because of the margins on alcohol, but instead they allow this outdated culture of charity to pull them down and be included in the nation-wide stat that says 85% of businesses fail within the first five years. People think bars are making a killing, but I’m here to tell you it just ain’t true. But I’m also here to tell you, there’s a better way.

The biggest problem is, owners and managers ALLOW it to happen. They know it’s happening, but fear keeps them from doing anything about it. They fear that if they don’t give away something for free that their regulars won’t come back. They fear competing with the bar down the street who is giving everything away for free. Worse yet, they fear confronting their staff about stealing. Yeah, it’s stealing. Don’t sugar coat it. This mindset is killing the bar business.

I remember walking into a very popular Greek bar and restaurant in San Francisco to talk to the General Manager about using my inventory services to monitor the bartenders in order to control costs. I knew that the bartenders were pouring way too heavy and were giving away enough drinks to supply a frat party. What the GM told me nearly made me shit right in my pants. She said, “Well, I don’t think your system would go over well here. The bartenders have been here for a long time and they wouldn’t like it if we brought in a system that monitored them. I don’t want to rock the boat or they might leave.”

shock face2

What the fuck did she just say to me?  I must have stared at her for a good 10 seconds, mouth hanging open, probably to the point of awkward discomfort because I’m sure the look on my face was one of disbelief, as if she had just lifted up her dress to reveal a penis.

Let me see if I have this straight. The bartenders wouldn’t like it if you told them that they were no longer allowed to be criminals and rob the place blind?

No, I guess they wouldn’t like that. That is quite the inconvenience. No wonder they had been there for so many years. They were siphoning the owner’s profits directly into their bank accounts, and this bimbo was too afraid to confront them to do anything about it. What a worthless set of standards she had set for this place. What was she even being paid for?

Let’s move on or I will start to hyperventilate if I relive that story any longer.

Controlling costs goes beyond ordering the right amount of product, creating cost-effective recipes and evaluating variances on spreadsheets. Don’t get me wrong, these are all important steps that managers need to put into practice, but these actions are mindless business operations that don’t work if there is no accountability or follow-up or discussion.

Cost control is a mindset. It is a culture of accountability that needs to be instilled into every staff member. Cost control should be a mission statement that tells everyone working at your bar/restaurant: “It is not ok to give away our products without the absolute consent of the owner or manager.”  This message needs to be stated and repeated until everyone is retrained and brainwashed into a new way of thinking.

Do you think they allow Nordstrom employees to hand out suits whenever they feel like it so that business people will come back and shop there instead of going to Macy’s? Hell no. Nordstrom’s has this revolutionary concept called Customer Service, and they do it so well that people come back regardless of price.

This is not an article about customer service, but this concept of mindset and culture does not end with cost control. In fact it doesn’t even begin with cost control. It begins with taking care of the people who come in. They are priority #1. The point is, your job is to create an entire new culture in your bar that states EXACTLY what the standards are, and then you need systems and tools in place to MONITOR and ENFORCE those standards, or you are just a bag of hot air preaching bullshit that you never follow through with.

It’s ok to go against the grain. Be a rebel, a thought leader, a visionary. Perhaps your place already has some cost controls and standards in place, but expand your thinking. Take it to a level that nobody is taking it. Call a staff meeting and lead them, inspire them. Have your culture trickle down through every vein of the system you have in place, especially when it comes to the experiences your guests will have.

Don’t sit back and let industry standards and your employees dictate the level of success you have for your business. Take control, and as someone wise I know once said, “Don’t be a little bitch!”

Cheers, until next time.

Dave, The RB