Where has all Your Profit Gone?

Your money is flying away; you'd better catch it!

Your money is flying away; you'd better catch it!

2011 is going to be an amazing year. The economy is coming out of a recession, people are opening their wallets again, and sales outlooks are all positive for the next 12 months. 2011 will also be a banner year in terms of opportunities to invest in your business. At times like these, traditional service industry staff turnover rates of 50%-65% plummet; and the employees in your bar are more loyal than ever before.

This column will be a four part directive for making your bar more profitable through systems and training. I’ll give you techniques and numbers that will make your bar more profitable… Guaranteed. In this issue, I’ll be discussing commonly overlooked areas where your bar is bleeding money. In the next issue I’ll tackle the importance of training your staff to stay ahead of industry trends so you’re offering beverage products and service that will make your guests come back for more with cash in hand… read on!

If your operation is like most, your bar likely opened with meticulous operational guidelines for how the bar is to be run, with detailed recipe lists, along with opening and closing procedures, weekly checklists for cleanliness and follow up procedures… When new staff come on board, they are usually trained by existing staff. After a few generations of this style of training, you run the risk of your original standards becoming wildly distorted, much like a game of broken telephone. When you consider that most in house bartender training programs consist of a couple of follow shifts, and a trial by fire on the service bar, it’s not surprising that the beverage quality in this country is so sub-standard.

While many bars come up with a list of personally named cocktails made mostly of brightly coloured liqueurs, most find that house cocktails don’t sell very well. Bartenders should have a few “go to” cocktails up their sleeve, for when a guest asks for something special. In fact 60% of bar patrons admit that they will try something new based on a server or bartender recommendation. When a guest arrives at the bar ordering a gin and tonic, it’s easy to get them into a cocktail just by suggesting one that works for their palate.

While some operators try to save on short term cost savings through by cutting training budgets, it’s actually a great time to train, and the returns on your training budget are exponential. In the hospitality industry, there is a fine line between profit and loss. So fine in fact that after tax, profit margins in F&B often average less than 3% according to recent figures. With margins like that it’s hard to justify spending more money on your business, but it’s been said that you have to spend it to make it, and in this case, it’s with a few key considerations and changes your bar can be more profitable in a short period of time.

First, consider how accurately your staff are pouring your spirit alcohol. While many bartenders free-pour, few can do it properly. You must have the same pour spouts on every bottle in your bar; not a mishmash of colours and styles that all pour at different rates. Perhaps you ask your staff to pour everything into a shot glass to control costs … surprisingly most of the on-site trainings I conduct where the bartenders use shot glasses, the shot glasses aren’t actually 30mL/1oz glasses. During busy periods when bartenders are rushing, the shot glass method results in overpouring 30% of the time. Ball bearing pour spouts are a great idea, but pour with varied consistency depending on the viscosity of the spirit or liqueur that the bartender is dispensing, and unless they are thoroughly cleaned on a regular basis, they become a nightmare after a few weeks.

Consider this: The average bar in Canada serves approximately 100 mixed drinks per day (100oz of spirits). If your bartenders are pouring 1/8oz (3.6mL or 8 drops of liquid) too much in each one, at $5.00 per drink, the loss to your restaurant or bar after 365 days is $22,885.50. Maybe it’s time to take training a little more seriously…

Now while I like to think I’m proficient in most areas of the bar, I often enlist the help of other industry experts when facilitating my trainings. I worked with Steve Riley, from Draught Prophets, last year at an event for the Prime Minister and delegates from 40 other countries. He immediately impressed me with his passion for all things beer. When you consider your draught beer service methods we often turn a blind eye to the amount of beer that goes down the drain due to spillage, and even worse staff pouring draught improperly. Do your staff know about the importance of serving draught with foam head? If bartenders in your bar are filling pint glasses to the top, you’re losing 10%-15% on every beer that goes across your bar. 20 fl oz (pint) glasses are the most popular glasses to pour. Each pint should be an 18oz pour with a dime sized head. Currently a keg of domestic draught beer is over $210, and contains 2064 fl oz. That equates to about 0.10 per fluid ounce of beer. There are 106 pints in a keg, but for ease of math we’ll call it 100 pints. If your staff aren’t pouring pints with a dime sized head, it’s costing you 0.20 per pint or roughly $20 per keg. If your bar serves 10 kegs a week, or 520 kegs per year, that equates to $10,400 per year in lost cash.

With wine service, the simplest habits like setting out a glass of water or juice poured to the exact portion size for for servers to measure against can lead to serious long term savings. Consider that the average portion of wine is 5oz/143mL and for ease of math we’ll call the sale price of that glass of wine $5.00. If your staff pour an extra ounce into each wine glass, which is easy to do, you’re losing a dollar for every extra ounce. At 25 glasses of wine per day, that equates to $9125.

You cant ignore numbers like these! With the amount of loss that is potentially happening in your establishment as we speak, over-pouring will bring you up to a grand total of $42,410.50 in losses. With the appropriate in-depth bartender training, you will be able to bring that number to it’s absolute minimum. One simple change will give your bar a push in a whole new direction of profit. Until next time, keep raising the bar in 2011 and good luck in the New Year!

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