Managing the costs of operating a bar can leave you wanting a stiff drink at the end of the day. According to Investopedia, bars gulp down an average of $20,000 in monthly expenses between labor, rent, utilities and other miscellaneous expenses. Ordering inventory can tack on thousands of dollars more.
Whether you’re a new bar operator or you own a well-established watering hole, there are quick and easy steps you can take to save money and maximize sales and profits.
Keep tabs on your stock
No operator wants to gulp down extra costs by ordering too much and letting expensive supplies go to waste. On the other hand, it’s important to have enough supplies to fulfill orders and meet demand. Different bars have different ways of taking stock, whether they use slider apps, scales or just eyeball their inventory. Bar management software Craftable can keep tabs on inventory in real-time, giving operators a better idea of what they have plenty of, and what they might need to order. And when it comes to bringing in more stock, Craftable offers one-stop shopping for all vendors.
Calculate the right pour costs
After an operator has the right stock to create their drinks, it’s important to make sure those beverages are selling for the right price. Most bars aim for profit margins between 75% and 80% on each drink, according to Bartenders Business. Mixing up those margins requires calculating pour cost, which combines expenses for the spirits, mixers and garnishes used for each cocktail. Using that base number, owners can tweak the price of each drink. Click here to learn more about pour costs on Craftable’s blog.
Engineer your menu and highlight your top sellers
A Gallup poll estimated that the average person spends 109 seconds looking at a menu, giving a bar owner less than two minutes to dazzle a thirsty customer with mouth-watering options. Menu engineering uses food and ingredient costs, drink prices, and profit margins to pinpoint a menu’s most popular and profitable sellers. With that information, operators can highlight their best and biggest sellers, and consider re-mixing or 86-ing drinks that cost a fortune and aren’t bringing in cheers-worthy sales. Click here to read more about menu engineering on Craftable’s blog.
Mix slow-moving inventory into large-batch sales
An operator has taken stock, calculated pour costs and engineered their menu for success, but there’s still excess inventory hanging around the back of the walk-in. Batch cocktails could be the way to get rid of that stubborn stock. Offering cocktails on tap or in pitchers with an eye-catching garnish is an easy way to create a drink special that gets rid of extra inventory. Punch by the bowl is another option that offers a fun, retro cocktail choice for families or large parties, reported FSR Magazine. Best of all, large batch beverages cut down on the time it takes bartenders to mix drinks, keeping customers happy and coming back for more.
Empower your staff
Speaking of bartenders, a bar’s staff can be the lifeblood of the business. Keeping staff happy helps reduce turnover, a problem that can cost as much as $5,864 per employee, according to a study done by the Center for Hospitality Research at Cornell University. There are simple ways to tackle turnover. Buzztime Business recommends rewarding high-performing team members with an employee of the month program, gift cards and bonuses, and shout-outs on digital signage. When employees feel appreciated, they’re likely to perform at a higher level and push more sales.
Whether you’re new to the beverage industry or a seasoned drink-slinger, Craftable’s tools can help improve your bottom line. Sign up for a free trial and pour more profit into your business.