Your bar has lines at happy hour, packed with patrons six and seven days per week. Revenue is up year-on-year, and your Yelp and Trip Advisor ratings have never been better. So why are you losing money?
When asked to do bar triage for a failing operation, the first thing we look at is the culture of hospitality. What is the service mantra and are there any team member conflicts? This may seem counter-intuitive; however, when there are issues in the team dynamics, there always seems to be performance problems and lack of following standard operating procedures.
In one casino resort bar, the staff started to feel removed from the overall casino operation. They did not practice the service culture, leading them to stop following normal SOPs and this led to higher costs and lower revenue due to lack of upselling and collecting what was due. A proper inspection of culture and review of standard operating procedures by management should have corrected this problem.
Other things that we look at:
- Inventory management
- Discrepancies in “Steps of Service” and standards
- Proper supervision and staffing
- Reporting and accountability
- POS configuration
- Menu costing and analysis
- Marketing, positioning and advertising
- Ordering, contracts and other expense lines
- Cleanliness and health code issues
The following are a sample of questions we ask when our services are requested.
“Have you noticed a change in behavior with any of your bartenders?”
We ask this question because often that is the crucial point of loss, with far reaching impacts to other staff. We have ways to review this area without revealing an investigation. A great bartender will certainly make your bar successful: however, a bad one can steal you blind, and it is very difficult to detect. Fellow Raving Partner, Derk Boss, Security and Surveillance, has written several articles on this topic.
“What is the relationship between your wine, beer and liquor supplier and your bar manager or purchaser?”
We ask this question because product selections need to have a holistic approach to the entire operation for quality, brand standards, and menu mix. Occasionally, the relationship in this area becomes personal, and items tend to change to what the supplier needs to place to earn individual incentives. Core items can be replaced and not priced appropriately and do not match the overall menu.
“Has your liquor cost risen over the last six months, while sales stayed the same or went up?”
Pour sizes, controls and inventory management are all crucial to keeping a bar profitable. Every bartender wants to be a flair entertainer. However, drinks are formulated recipes, and when they are changed, it really does affect the finished product. Other controls prevent large profit loss and limit waste. Moreover, locks keep honest people honest, and these controls prevent a good team from becoming bad.