WHAT IS THE TOP REASON BAR OWNERS LOSE MONEY?

So what is the trick to increasing bar profits? The first question you have to ask yourself is ‘What is the top reason bar owners lose money?’ Educate your bartenders. If you have a close personal relationship with your money, listen-up! Let me begin by asking you a question: if you sold 12 oz. steaks in your club or bar, why would you feel compelled to give a customer a 16 oz. steak? If you are a club or bar owner who is in the cultural mindset of giving free drinks away and justifies it by saying, ‘I don’t want my customers complaining,’ then I say you are in the WRONG business! The culture you create with this philosophy is that you are entitling your customers AND your bartenders! These are known as ‘silent partners.’ Believe me, when your bartenders are hip to this, they will apply it liberally – and pad the tip jar in the process. In other words, Mr./Ms. club owner, with this culture you become the LOSER. What I’m going to tell you next will blow your mind. Everyone reading this post, I’m certain, understands what a one-ounce shot glass looks like. It has a white line, which is called the ‘pour line,’ as shown in the photo above, right. The thickness of the pour line is equivalent to 1/8 of an ounce. A standard shot is poured to the bottom of the pour line – not the top. If you consistently fill the shot glass to the top of the pour line (or beyond), you could be losing $48,484 or more per year^[1]! In other words, you are giving away at least $13 in profit for every quart of liquor you sell! If you sell a great deal of top-shelf liquor, the losses are at least doubled.

WHAT IS THE TRICK TO INCREASING BAR PROFITS?

Another trick to increasing bar profits is by purchasing a liquor control system – you’ll watch your profits go through the ceiling!

• A liquor control system will consistently dispense liquor to within 1/32 of an ounce. At an investment of $7,000 – $10,000 per station, the return-on-investment (ROI) for a liquor control station is about three months. Where can you get an ROI like that?!
• Liquor control systems are programmed to pour multi-portioned cocktails and will do your bookkeeping for you. You can read my evaluation of the top liquor control systems (refer below).
• If you are only reporting the sale of each drink to the POS system, recording the sale is only as honest as the bartender. However, with a liquor control system, the sale of each drink is reported directly to your office computer AND to your POS system and will not allow the bartender to void the sale once it is entered.

Tap beer control systems work in a similar fashion, where the pour of each faucet is controlled and reported to the office computer and POS system. Tap beer control systems cost around $500 for the first faucet and around $250 for each additional faucet. Any bar owner who isn’t taking advantage of liquor control pouring is a partner to his/her customers and bartenders.

HOW CAN BAR OWNERS SHOW CUSTOMER APPRECIATION AND INCREASE BAR PROFITS?

Simple. If you really want to demonstrate your customer appreciation, and you are the owner, walk up to them at the bar, shake their hands and pay for their drinks with money out of your pocket. If you like to occasionally have your bartenders extend this token of appreciation, have them pay with their own money – but IF AND ONLY IF they furnish you with receipts!

WHAT’S THE TAKEAWAY OF TRICKS TO INCREASING BAR PROFITS?

The above is a sample of the tricks to increasing bar profits. There are certainly more. The bottom line is you are in the business to make money, so get after it!

1 Based on 12 32 oz. bottles of liquor per day, 310 days per year and a price of $3.50 per drink