How to Control Bar Costs

01/10/2016 04:13

2 glasses of mojitos in a black bar mat with background various glasses garnish with lime wheels and mint leaves on the glass rim

 

How to Control Bar Costs

 

Bar owner's are looking for solution on how to control bar costs and they can't find effective information from the internet contents, "because, most of the contents are only stories or hearsay in the bar operations, without specific guide to help them to the problem. Here, I like to share some points to help peoples who want to learn about bar costs. This content will help you step by step on how to control your bar cost in your bar business (Take note: Controlling cost of bar business such as: labor costs, food costs, operating expenses, repair and maintenance costs are not included)

 
 
To control your bar cost you must correctly done menu costing and selling price. Wrong beverage markup and marketing flow percentage, it can be the main reasons to lose your business and become bankrupt if you are not aware on technicality of the business hidden cost. don't be happy when you are selling too much, "because, may be you are losing too much. Controlling bar costs in the bar operations is more easy compared with those hidden cost. Vigilant from inside and outside the bar is effective task and make sure that all S.O.P are implemented correctly and accurately. 
 
 

Bar Cost Control

Bar Cost Control - 1 ... Recommended for big bar business
 
Job to be done  -  To control your bar costs from hidden cost and bar operations, please find below all step by step from Task - 1  to  Task - 11
 
 
 
Bar Cost Control - 2 ... Recommended for small bar business
 
Job to be done - A ... To control your bar costs from hidden cost and bar operations, please find below all step by step from Task - 1  to  Task - 11
 
Job to be done - B ... To control your bar cost from inside the bar
  1. Daily bar physical inventory against inventory record after bar operations.(bartender and cost controller daily job)
  2. Set-up a bar rules and regulations that bartender or all bartenders are responsible to pay all missing bar stocks at the end of the day.
  3. Strictly implemented that no register drink order, no drink.
  4. No packet to all bar staffs uniform.
  5. Provides two set of bar keys for every bar outlet , one for bartender and one for the bar manager.
  6. Bar Manager is not allowed to enter inside the bar without bartender or cost controller.
  7. Provides complete padlock to all bar doors, shelves, fridges and cabinets
  8. Bar outlet is totally locked after operations with complete inspection of bar manager. 
  9. Hired one cost controller only for bar cost control.
 
 
Bar Cost Control - 3 ... Recommended for small bar business
 
Job to be done - A ... To control your bar costs from hidden cost and bar operations, please find below all step by step from Task - 1  to  Task - 11
 
Job to be done - B ... To control your bar cost from inside the bar.
  1. Hired one bar cashier purposely for daily bar operations.
  2. Nobody can touch the cash register including the bar manager or the owner's, only the bar cashier is allowed.
  3. Strictly implemented that no register drink order, no drink.
  4. Bartender is not allowed to make a drink with free pouring style, all drinks prepared must be measured with the set standard
  5. No packet to all bar staffs uniform
 
 
 

Step - 1 ... Office Work

  • Task - 1 - Purchase Order Cost
  • Task - 2 - Inventory Cost
  • Task - 3 - Menu Costing
  • Task - 4 - Selling Price
  • Task - 5 - Beverage Markup
  • Task - 6 - Beverage Marketing Flow
  • Task - 7 - Given Percentage
  • Task - 8 - Target Bar Cost
  • Task - 9 - Target Gross Profit Margin Percentage
  • Task - 10 - Bar Cost Report
 
Step - 2 ... Bar Supervising and Monitoring
  • Task - 11 - Bar Management
 
 
Note: 
  • All discounted sales, compliments and owner's consumptions must be recorded as regular sales and noted to the monthly income statement and trial balance.
  • When making cocktail menu, you must study location and adjust beverage mark up and marketing flow. Marketing flow is a percentage for low and high price of the product in the market.
  • The standard markup of beverage is 19% to 25%, and marketing flow is defending against the feasibility study of your business, Given Percentage is a percentage of 100 percent to be used as calculation/ deviation to get your selling price in the right direction.
  • You can use this formulas for actual bar operations; just adjust the best for your business selling prices.
  • Direct percentage caculation of the selling price likes times 500% or more is not recommended, "because, you can't control the marketing flow of the market daily/weekly and monthly
  • By using this formulas you can make menu planning for every 3 month or up to 6 months without losing business.
 
I Hope you will find this information helpful.

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