Six Cost-Cutting Tips for Small Bars

Saving money tips for small business bars

Six Cost-Cutting Tips for Small Bars

If you own a small bar or pub, your margin for error is very small. Small losses can add up to become a huge threat to your business.  Large bar and nightclub owners can make up for most losses much quicker than a small bar owner can. That’s why it’s important to identify the loss leaders in your business and shore them up. Signal Connect has identified six typical problems that cost small bar owners money. For each of these problems, we offer a solution. Don’t let a handful of small issues deal big time damage to your profitability. Read these six cost-cutting tips and incorporate them at your bar!

1. Problem – Incorrect Liquor Orders: As a bar owner, do you personally receive your liquor orders? If you don’t, it’s high time that you should. If your liquor distributor forgets a bottle here or there, you lose money in two ways.  First, you’re out the cash you laid out for that particular bottle of liquor, beer, or wine.  You also lose on the back end when your customers are unable to get their favorite drink at your bar.  You could lose a loyal customer if this problem continues.  As a small bar owner, each dollar and each customer is pivotal to your success.

Solution – Check Your Liquor Orders: Get involved in your liquor deliveries.  Get out of your office to personally check to see if you received everything you ordered. If you didn’t, call your supplier and explain the problem. In most cases, your distributor will do everything they can to remedy this situation. (They don’t want to lose your business, after all!) If they’re not willing to fix their mistake, it might be time to find a different supplier.

2. Problem – Lost Draft Beer Profits: Pouring draft beer the proper way is one of the most important aspects of your business. Consider the numbers: draft beer pours about two ounces per second when you pull that tap. For every draft beer you pour, you waste another one from over-pouring and creating foam. That means for each keg you tap, you’re dumping about 20 glasses of beer down the drain. You can calculate the loss of dollars based on what your cost is per glass. (For example, if you charge $4 for a draft beer, improper pouring is costing you more than $80 in profits per keg.) Whatever number you come up with, this level of loss is totally unacceptable!

Solution – Learn Proper Draft Beer Pouring: There is a right way to pour a draft beer and you need to learn it.  The good news is that it’s not that difficult.  It just takes a little knowledge and a little more practice to get it right.  Retrain yourself and your staff in how to properly pour a draft beer.  Believe it or not, there’s an art and science to it.  There are tons of how-to-pour-draft-beer documents and videos online.  Here just one of many tutorials on YouTube:

 

3. Problem – Over-Pouring Liquor: When it comes to your mixed drinks and shots, a bartender with a heavy hand can end up costing you big. These generous types can over-pour drinks for their friends or people that they like. They think they’re doing your customers a favor but what they’re really doing is hurting your bottom line.  You’ve priced each drink to be profitable only when poured in specific amounts.  Any tampering with that ends up throwing your profit margin down the drain.

Solution – Use Jiggers: These devices let anyone pour the exact amount of liquor you want all your drinks to be. If you have a problem with theft, a jigger helps identify the culprit.  You’ll easily see where your drink output exceeds the amount sold. Taking the time to use a jigger can slow things down a bit.  Most successful bar owners agree that the pros outweigh the cons here. If you need help using jiggers, you can find how-to videos all over the internet:

 

4. Problem – Different Drink Recipes: You name the mixed drink and there are multiple ways to make it. Each of these recipes will require different liquors in various amounts. If you and your staff have a different way of making a particular drink, then your customers are getting a different drink each time they order one. You can’t have this at your bar because it will affect the way your customers buy drinks.

Solution – Standardize Your Drink Recipes:  As a bar owner, it’s up to you to choose the best recipes to make every drink in your business. It’s also up to you to train your bartenders and staff in the proper way to make each of these drinks. This way, no matter who is making the drink, your customers get the same drink recipe every time.  Any successful businessperson will tell you that consistency is key.   

5. Problem – Costly Waste: On a regular basis, drinks get spilled, things get broken, and items get ordered by mistake. If you look at each of these instances in and of themselves, it might seem like it’s not really that big of a deal. When you look at all this waste as a whole, you’ll see the total number of dollars you’re losing on a regular basis.  This has to inspire you to want to put an end to all these costly losses.

Solution – Track Waste in Your Bar: As the owner, it’s up to you to log everything that gets spilled, broken, and ordered incorrectly. Also make sure to list the value these items and what you lost in potential profits. Once you identify patterns and problem personnel, show them how these small mistakes create big revenue losses. While you’re at it, offer them training to curb these mistakes going forward.

6. Problem – Leaving Money on the Table: Are there nights when you’re competitor’s bar is packed yet, you only have a few regulars at your bar? This can be frustrating because you know you’re “leaving money on the table,” or not earning as much as you could. On nights like this, you pay more money to your staff that what you earn in profits.  If you know which nights are slow, you can cut back on the number of people you have on the clock.  While this is good, a better solution is to have something that brings the crowds – and their money – into your bar. 

Solution – Get DIRECTV for Your Bar: If you want to pack your bar with customers, you need DIRECTV. This satellite TV service offers a variety of programming that appeals to your customers. Bar owners particularly love DIRECTV’s pro baseball, basketball, football, and hockey channels. These sports viewing packages deliver the most in- and out-of-market games from every team in the league. When the game is on, you’ll attract people who will come in, stay longer, and order more food and drinks. This means they’re spending more time and money at your business. (We call this “beer math” and it works!)

 

Get DIRECTV from Signal Connect

Do you want DIRECTV for your bar? We know that this is a big step for any bar owner. Our customer support reps will help you with every step involved in bringing DIRECTV to your business. Signal Connect is an AT&T Preferred Dealer. We have the knowledge to match you with the best commercial programming package. DIRECTV is a proven moneymaker for any bar owner. You probably have a lot of questions. Our customer support team is happy to answer these. Just give us a call at 866-726-4182.