Alcohol has been and continues to hold its significance in social bonding and engagement. With the changing lifestyles, more and more people are drawn towards getting together on the weekends. The first thing that a large number of young people do is to go to a bar set up for some drinks and a good time with friends and family. This is one of the major reasons why bars and pubs are popular among today’s generation.
If you’re a restaurateur and looking to open a new bar, you must first aim to provide your customers with the experience that they are looking for. Secondly, you need to think about maximizing your profits in a way that you do not compromise the quality of the products and services that your bar offers. With more and more bars popping up, bad quality service isn’t something that you can afford to have.
To achieve maximum profits, you need to have an in-depth knowledge of your bar, its operations, its liquor, its ability to keep customers coming back, etc.
How To Bolster Profits Of Your Bar Set Up
Maximizing bar profits while keeping your service standards sky-high is quite cumbersome. This article will help and guide you through the different ways to maximize profits in your bar set up.
1. Retain Your Customers
Customers are paramount for any restaurant format. The first thing a bar set up should work on is retaining its old customers as they are your walking brand ambassadors. They market your brand and bring more customers by word of mouth or by posting about your outlet on social media. Therefore, it is indispensable for you to retain your loyal customers. Not doing so might lead you to lose new customers as well.
There are ample ways to retain customers. You can go for personalized marketing and appreciate their loyalty by greeting them and giving them discounts on their birthdays or other special occasions. Offering complimentary items when they visit your bar is another way of delighting and retaining them. Moreover, you can leverage your loyalty programs by offering tier-based or point-based programs to bolster customer loyalty and sales.
2. Offer Happy Hours
As per Statista, youngsters aged 18-24 constitute a major part of the binge drinking trend in the US. So happy hours in any bar target this age group primarily. Being a bar owner, you should know the tastes and preferences of this demographic. For example, they are constantly on the lookout for cheap and affordable places to drink, eat, and have a good time which is why happy hours are an asset to them. Hence, an asset for you too.
Product prices during happy hours are relatively low. You need to price your menu optimally during this time such that it maximizes your sales. Experiment by introducing offers like BOGO, 2+1, or complementary starters on your menu. Giving happy hours for 4 or 5 hours in the primary operating hours, for instance, 4 pm to 9 pm can delight your loyal customers as well as draw more of them in. Use your happy hours judiciously to enhance your sales and maximize profits.
3. Serve Profitable Foods
Even though a bar set up primarily focuses on alcoholic beverages, the experience is incomplete without any accompaniments. Being a good filler, most people tend to enjoy starters or ‘chakna’ while binging on drinks. Not to mention, youngsters who use it to compensate for the strong taste of alcohol.
However, you can’t just serve any food and need to figure out which can be the most profitable and most preferred item on your menu that can inflate your profits. You can roll out a limited menu so that your focus stays primarily on the drinks while offering food to the customers.
Let us look at some of the profitable food and drinks ideas that you can incorporate:
- For a bar set up without a kitchen, pizza is the best thing that can be served as it goes well with wine and beer.
- Burgers with sides like fries are also a good option to be served with drinks as they are popular with customers.
- Offering breakfast with omelettes and pancakes is another way you can boost your profit margin. Most bars are empty in the morning hours. You can use breakfast to fill up your bar with customers during these hours.
- Besides the food, you can choose profitable non-alcoholic beverages for that one non-alcoholic person in the group.
4. Utilize Upselling Techniques
Upselling, as the name suggests, is used to promote the premium drinks on the menu proactively by giving suggestions or introducing customers to the new additions on the menu. However, you must train your staff well to upsell your items. The better the upselling, the more the sales are likely to be. For that, you need to consider your servers as not just order-takers, but also as salespersons capable of playing a key role in enhancing your bar’s sales. They should be educated enough, know your high-end drinks, and know how to create a compelling sales pitch on their feet.
While people wait for their orders, your servers can tell them about the reasons why they should buy a premium drink, or why they should order a particular dish. You can also suggest good drinks which they can pair with a side dish that will go with the drink.
5. Ace Your Bar Set Up Marketing
One method that most bar owners overlook while planning their sales strategy is good marketing. A good marketing strategy opens the door for more customers to come in by creating brand awareness. A separate marketing department can work well for devising weekly and monthly marketing targets. You can adopt both online and offline channels to expand your reach and customer base. Here are some strategies you can adopt:
- Social media marketing: Leverage social media platforms like Facebook, Instagram, Twitter, etc., to market your business. They have immense potential as they have a humongous population associated with them.
- SEO optimization: Most people look up a bar or restaurant online before visiting it. Optimize your website content such that your website appears in the top search results whenever researched by a customer.
- Hosting events: You can even host events to maximize your profits and draw more customers. Why will an event draw more traffic? It is because you will price your most popular items lower than usual and let more people buy them. Free or complimentary drinks are also a good way to attract more customers. It is more of future investment as these customers will be more likely to visit again and spend more. For instance, Starbucks celebrated the opening of its 100th outlet in India by selling its coffee at INR 100 and everyone was able to afford it. This event helped the brand build a better connection with its customers while boosting revenue.
6. Control Operating Costs
The overall operating costs of a bar consist of food costs and liquor costs, both of which must be kept in control. Food costs are generally high due to inventory wastage, spilt food, reprinting of KOTs, leftovers, or inventory pilferage from the kitchen. Alcohol costs can also be high due to spillage, breakage, or thefts. Therefore, you need to have tight control over your inventory and keep a check on thefts.
Use a bar management system that keeps track of all your inventory and alcohol consumption. You must also come up with cost control mechanisms on the basis of the reports generated by the bar POS system.
For example, you can maintain 3 sheets to track your stock and inventory, avoid wastage, control bar costs and boost profits.
- Perpetual Inventory Form that reflects the changes in your stock and inventory.
- Recipe Sheet that consists of the recipe of every dish and drink on the menu for easy preparation and to avoid wastage.
- Waste Sheet that helps you track where and how much your food and liquor stock is getting wasted.
Besides the inventory and liquor costs, you must also look after your glassware. Bars are all about glassware. Every drink is served in utensils made of glass, be it shot glasses, wine glasses, martini glasses, rock glasses or beer glasses. Equip yourself with the best glassware and train your staff to handle it properly in order to avoid breakage.
7. Utilize Tactics Like Mixology
People pay for things that are out of the box. While bartenders make drinks up and serve, mixologists add flair to it. Mixology is an art of exploring new ways to make drinks well or making good cocktails instead of just pouring liquor into the glassware and serving it. Naturally, the bartenders who are passionate about their task are called mixologists. They keep on exploring and bringing new innovations to the drinks.
You can hire mixologists to make better cocktails, drinkable by the people who avoid alcohol due to its taste and make your sales there. Since it is a relatively new concept, it can prove to be your Unique Selling Point (USP), drawing in more customers.
8. Offer Free Tasting
Offering free tasting sessions is a good way of experimentation, marketing and boosting revenue. When people walk into a bar and are greeted with complimentary drinks for tasting, they tend to get generous. To reciprocate, they buy drinks from your bar, thereby increasing sales.
You can ask for reviews of products like home-brewed beer, or any new addition to your food menu. By knowing how it performs with customers, you can determine whether to include it on the menu or not. If it gets approved by your customers, it can be made a regular feature on your menu.
9. Maintain A Healthy Atmosphere In Your Bar Set Up
The bar atmosphere impacts customers’ minds to a great extent. If the atmosphere is comfortable enough, they will sit there in your bar for hours and continue ordering drinks back to back. Analyze your bar’s atmosphere and check if it’s comfortable and appealing to your customers. If not, it’s time to make changes in order to deliver a unique customer experience.
First, you need to pay attention to the lighting of your ambience. With ambient lighting, create a warm feeling for your customers while they visit and hang out in your bar.
Second, ensure comfortable seating. The more comfortable your seating, the longer will your customers stay. Also, have enough space between adjacent tables for easy movement of staff and customers.
Third, music. It should be in resonance with your bar’s ambience and must appeal to your customers. Customers must relate to the music that you play and sing along with it. You can start with soft music in the evening and switch to jazz or pop as time passes. Live music is also a good concept that you can incorporate into your bar to make the customer experience enjoyable.
Lastly, you should always focus on a good customer experience. Polite servers and bartenders who are competent at their job assure happy customers, and happy customers are most likely to come back. A memorable customer experience drives referrals and word of mouth publicity as well. You can further elevate their loyalty by introducing various loyalty programs.
Bar restaurant management is a vital and cumbersome process. If you fail to optimize it, you might incur losses. Moreover, customers today are always looking for novel experiences. Therefore, you need to revamp your strategies time and again to catch up. Use these tricks to keep your customers hooked to your bar set up while bolstering your profits.