Avoiding the ten critical errors beverage operators make
As the adage goes, "When a man with money meets a man with experience, the man with the experience ends up with the money, and the man with the money ends up with the experience."
Experience affords you perspective, an invaluable advantage in business and allows you to see the big picture, to view your business from an expanded perspective. Experience also lets you identify potential problems and pit falls before you actually blunder into them, another indispensable attribute.
In the beverage business, there are a number of critical errors that should be avoided at all costs. Every industry has them, ours is no different. Here then is our list of the ten critical errors beverage operators make.
|1. Loss of Control - Running a bar requires making a significant investment in liquid assets, liquid that can disappear without a corresponding sale at an alarming rate. Failing to implement an effective inventory control system places at risk the capital you've invested in that inventory. |
To be profitable, you should have the capability of knowing exactly what inventory you have, what you paid for it, at what rate you use it, and exactly where it is at any point in time. Tracking inventory throughout your operation doesn't require software. Rather, it's a matter of simple book keeping.
2. Monitoring PC - One of the many truisms in this business is, "If you can't measure it, you can't manage it." Nowhere is that truer than behind the bar. Determining your bar's ongoing cost percentages - pour costs - reveals your level of profitability. As your cost of goods sold increases, gross profits diminish. Success behind the bar greatly depends on maintaining and safeguarding your profit margins. No profit, no success.
4. Fiscal Responsibility - In some respects, the underlying proposition of the beverage business is fundamentally unstable. It involves you taking your hard earned working capital, investing it in liquid and then asking your hourly employees to exchange that liquid back into more working capital than with which you started. One of the crucial disciplines to instill into your operation is strict portioning controls. Over-pouring is an insidious source of losses. It also hastens and exacerbates intoxication.
5. Productivity - Every industry tracks employee productivity except ours. Calculating sales per hour is easily done and is an enormously effective means of assessing employee effectiveness. Productivity measures employee sales per hour, and is computed by dividing the shift's gross sales by the number of hours the bartender worked. An employee with chronically low sales per hour may indicate a serious problem.
6. Suds Watch - Industry wide, we lose roughly 20% of the draft beer we purchase due to waste, spillage, and theft. That translates to one out of every five kegs of beer. With interest in draft beer soaring, clamping down on draft costs is essential.
7. Shoddy Product - A restaurant that doesn't routinely change its menu always has plenty of open tables. The same is true of bars. Add some pizzazz to your beverage line-up. Shake up your specialty drinks. Change, spices things up and helps keep your clientele interested. Likewise, bartending staffs typically operate without a clearly defined set of recipes. The result is a loss of product consistency, fluctuating costs, and shoddy hit-or-miss drinks. Determine what they're to pour, or they'll do it for you.
9. Ill-devised Play Book - Get a new car and you get an owner's manual. Get drafted into the NBA or NFL and they'll give you a play book. Get hired as a bartender or food server and you'll likely get a handshake, three training shifts and photocopies of house policies. Is that all you give to your employees?
10. Lack of Leadership - Things are managed, people are lead. Make every effort to become a dynamic leader, one who leads by example. Your staff are the lifeblood of your operation, without whom all enterprise ceases. Acknowledge and encourage their efforts, and nearly all other management issues will abate.
|ROBERT PLOTKIN is the president of the National Bar & Restaurant Management Association and author of numerous books including Successful Beverage Management - Proven Strategies for the On-Premise Operator. He can be reached at BarMedia, 1-800-421-7179, or e-mail him at email@example.com.|
- Most Valuable Spirits Brands in 2017 - The facts
- Most Valuable Beer Brands in 2017 - The facts
- Has the politics of M&A changed? - Analysis
- IAADFS Duty Free Show of the Americas - Preview
- Interview, Fever-Tree's founders
- Coca-Cola Co announces senior executive shake-up
- Diageo's Captain Morgan LocoNut - NPD
- Heineken releases colour-change bottles
- Diageo rolls out vegan Baileys Almande Almondmilk
- Heineken sees Tesco pull SKUs in UK
- Central and East Europe Report Package
- Battle of the Generations - The fight for iGen, Millennial, Gen X and Baby Boomer consumers
- Global vodka insights - market forecasts, product innovation and consumer trends
- Global rum insights - market forecasts, product innovation and consumer trends
- Global Scotch insights - market forecasts, product innovation and consumer trends