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The Craft

The ultimate resource for alcohol beverage news, trends and reports for bars, distributors and suppliers.


Bars and restaurants are revolving doors of management concerns. You have inventory to consider, product to order, employees to hire and train and pay, stock to keep track of, equipment to service—are we triggering panic yet? The point is, running a bar or restaurant takes a lot of hard work and it isn't cheap. 

Let's take a look at some profitability tips and strategies to boost your business.

Ways to manage your profitability

Profitability comes from what's left after all the expenses are paid. Obviously you want more cash coming in than going out, which means more customer sales than operating expenses on average. That's a rather simple equation that's easy enough to understand, but making sure it happens week after week and month after month is another story. Hiccups happen: there are wrong orders, spilled booze, expired product, incorrect checks, and plenty more that can take a month from "cruising high" to "just scraping by." Here are some tips to help improve your bar or restaurant's profitability.

Understand Your KPIs (Key Performance Indicators)

KPIs are really the bread and butter of understanding, monitoring and managing the financial health of your bar or restaurant. They're so important that we previously wrote an article on restaurant metrics and KPIs. Knowing things like your Cost of Goods Sold, Overhead and Food Cost will let you become a better business planner and find areas of your operation that might need mending or improving to increase your profitability.

Do A Beverage Cost Analysis

How much are you charging per drink vs how much you should be charging? Sometimes it can seem fickle to argue over cents but when you're serving up hundreds or thousands of beers, bottles and cocktails every month, every little bit adds up. Do an in-depth beverage cost analysis to see how much money you're making—or leaving on the table—when it comes to drink sales in your establishment.

Become an Inventory Guru

Do you know where all your items are stored, and how much of each item is there, and when they all expire? If the answer is anything but a resounding yes, then you could be missing out on extra profit. It never hurts to brush up on inventory management tips to make sure you tread a fine line between unused tomatoes going moldy and running out of a customer's favorite drink.

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