Bar Profitability – How to Increase Your Bar’s Revenue and Profit?
If you are wondering about ways to boost bar profitability, this article is just for you.
As the competition stiffens among the players in the hospitality industry, bar businesses are looking for ways to sustain and grow.
You must incorporate unique strategies and offer distinct services in your venue to stay competitive.
Read on to delve into some amazing tips to attract customers, drive sales, and boost your profits.
Here are some of the effective ways to boost your bar profitability.
How to increase a bar’s profitability
1. Leverage the upselling strategy
2. Focus on existing customers
3. Cut down on your bar waste
4. Embrace a modern bar and kitchen setup
5. Include free-tasting options
6. Use technology to boost efficiency
7. Promote your venue on social media
8. Optimize your beverage cost percentage
1. Leverage the upselling strategy
Upselling your services is an obvious yet lucrative strategy for increasing your bar profit.
The idea of upselling is to make your customers buy something extra, preferably a higher-priced drink or food item on the menu.
As a first step, equip your waiters to act like salesmen while they attend to your visitors.
Besides exhibiting the best demeanor, your bar staff should talk encouragingly to the customers, for instance, getting them to order your signature dishes.
Yet another scenario is when a customer is deciding on what to order.
In that spur, your server must be swift enough to direct your customer’s attention to top-shelf wines or special food on the menu.
Quick yet smart suggestions on pairing items and recommending your trending drinks to the customers by your servers can significantly boost sales.
Additionally, for your regular visitors, try assigning the same waiter to a specific guest who is aware of their tastes and preferred brands.
That way, your customer and the assigned server will gel well, creating rewarding experiences for each other.
However, ensure that there is always an equally adept backup staff who can manage the customers’ orders in case the originally assigned waiter isn’t available.
In any case, inculcate in your staff a mindset of upselling your services, preparing them to go the extra mile to keep customers engaged.
2. Focus on existing customers
You may often spend more time getting new customers while sparing little for your existing loyalists.
Express your gratitude and always value your regular customers as they offer you stable ground to build upon. It greatly helps your business by:
- Eliciting feedback from customers on your new drinks or specific food items
- Seeking their suggestions on where to improve
- Offering discounts for referrals
- Including them in your loyalty program to forge long-standing relationships
While upselling boosts sales and increases bar profit, there’s another indirect yet equally effective strategy: focusing on reducing bar waste.
Pouring and spilling add to expenses, impacting profits. Besides, it requires greater effort to clean up the mess.
A good idea is to incorporate a policy on these aspects.
Additionally, keep a check on the spills. Most importantly, buy and store only the required inventory.
Avoid over-stocking.
4. Embrace a modern bar and kitchen setup
As tastes and preferences evolve, you need to adapt to better cater to your customers.
Introducing trending wines and high-quality beer is vital to growing your bar’s profit and staying competitive.
That said, modern kitchenware and equipment facilitate crafting these specialty drinks in the best quality, taste, and efficiency.
In addition, these devices make your staff’s jobs easier and allow time to develop new recipes.
Buying such appliances to cut costs, boost your bar’s profitability, and create a remarkable customer experience is much needed.
5. Include free-tasting options
Yet another smart step in your marketing strategy is to offer free-tasting drinks in your bar.
Put yourself in the customer’s shoes. Doesn’t it feel great when you get a privilege? Yes, right?
Offering your bar visitors a complimentary wine or beer sample opens the doors to boosting your sales. This strategy serves two purposes.
First, your customers might “get carried away” by your generosity and, in turn, be ready to buy a drink.
Second, an oft-overlooked aspect is that this gesture will give you a signal on whether your drink is getting a sign-off from your visitors.
You gauge your customers’ taste buds and craft the drink accordingly.
6. Use technology to boost efficiency
Install a Point-of-Sale (POS) system to simplify processing and reduce errors in customer transactions, making your staff efficient.
The system also eases inventory tracking, facilitates table-side ordering, and provides insights from the built-in reporting and analytics.
A dedicated mobile app for your bar is a great way to boost bar sales, as customers can easily place orders.
A lesser-known technology application for bars is inventory management software. With these systems in place, you’ll know when to buy and how much.
This lets you track your inventory, preventing you from running out of stock or overstocking.
Besides, you get all the information on your costs, expenses, and other figures.
QR codes and self-service beer taps are other ways to boost sales and grow your bar profits.
7. Promote your venue on social media
In today’s digital age, social media is where your customers and prospects meet.
Leverage this platform to boost your brand and convert your leads. Keep your customers engaged with interesting posts, pictures, and videos of your venue on Instagram, Facebook, and other channels.
Talk about what’s new on your food and drink menu, upcoming events, themed nights, etc.
Additionally, you may post candid videos of your staff to let your customers have fun while sustaining interest.
Share your views and seek customer suggestions on any changes you plan to bring to your bar.
While these aren’t direct ways to boost bar profitability, they will surely increase it in the long run.
8. Optimize your beverage cost percentage
One of the most critical factors influencing a bar’s profitability is its Beverage Cost Percentage (BCP).
This metric measures the ratio of the cost of goods sold (COGS) to the total sales revenue. A lower BCP indicates higher profitability.
To optimize your BCP, start by meticulously tracking your inventory. Implement a robust inventory management system to monitor stock levels, identify discrepancies, and prevent overstocking or understocking.
Regularly conduct physical inventory counts to ensure accuracy. Additionally, consider using a point-of-sale (POS) system with integrated inventory management features to streamline the process.
Another crucial step is to negotiate favourable deals with suppliers. Building strong relationships with suppliers can lead to better pricing, discounts, and exclusive offers.
Regularly review your supplier contracts and explore opportunities to reduce costs.
Furthermore, optimizing your drink recipes can significantly impact your BCP.
Ensure that your bartenders are accurately measuring ingredients and adhering to standardized recipes.
This not only maintains consistency in taste but also prevents over-pouring, which can erode profits.
Consider conducting regular drink audits to identify areas for improvement and maintain strict portion control.
By carefully managing your inventory, negotiating favorable deals, and optimizing your drink recipes, you can effectively reduce your BCP and boost your bar’s overall profitability.
Wrapping up
In the thriving bar industry, you must be on your toes to stay ahead.
You need some smart strategies to go a step beyond sustenance and fetch plum profits.
Follow the tips outlined in the blog and let your bar profitability soar.
