4 Ways to Control Your Liquor Costs

Image Source: Best Local Spirits

Cost is a 4-letter word that just about every owner and operator dislikes. Finding effective ways to cut them is, for some, a never ending battle. Here are five easy-to-implement systems that will help you cut costs now and set you up to weather fluctuations in your bar or restaurant in the future.

  1. Raise prices. Whatever you do, don’t start ordering lesser quality substitutions. People who come to your restaurant or bar on a regular basis have come to expect a certain level of quality and they’ll notice the changes. Instead, make small, incremental price increases. It won’t take much.
  2. Recipe costing cards. Create a recipe costing card for every one of your bar drinks (and any food you offer). Include everything down to the single piece of garnish. Making these cards and training everyone to use them eliminates waste and over-pouring. Plus, it provides a great training tool for new bartenders and other staff.
  3. Menu engineering. If you have them at your disposal, run a few reports through your POS system. Look at your item-by-item sales mix report and your key item report. Plot each item on a graph, with the number sold on the y-axis and the profits made in dollars on the x-axis. These will tell you what drinks are ordered most often and how much they cost you to make. Combine your recipe costing cards with your POS reports and you’ll see the dogs on your menu: the items that don’t sell, or the ones that do sell, but cost you money to sell. You want popular, high-profit menu items: the stars. Get rid of the dogs, highlight the stars. Encourage people to purchase the higher priced drinks on your menu.
  4. Waste sheets. All causes for waste are avoidable and are a direct result of a lack of management and training. Waste includes drinks that are made incorrectly, spilled drinks, and spoiled ingredients. The waste sheet includes what the item was, that it was wasted, why it was wasted, and how much that waste cost. Keep track of what gets wasted and you’ll see a drop in waste, along with an automatic drop in your pour cost.

No matter where you are financially, implementing these systems will impact your bottom line.

I’m looking forward to presenting two sessions at the upcoming Nightclub and Bar Show:

  1. PRO Workshop 5: “The Operationsal Systems You Need to Dramatically Reduce Your Labor Cost” March 7, 9:30 AM to 12:30 PM.
  2. Survival Tools: Costing Cards to the Rescue” March 8, 2:00 to 2:45 PM.

If you attend one or both of these sessions, I guarantee you will leave the show with tools you can use to impact and decrease your costs and increase your sales. See you there!

David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. Download a free report to discover the #1 secret to lowering food and labor costs and running the independent restaurant you’ve always dreamed of. Learn more about how David can help you at www.TheRestaurantExpert.com.

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