While owning a bar might sound cool and awesome, it’s actually quite a challenge. You, as an owner, have to think about every aspect of your business in order to keep it functional and on a par with the competition. Some aspects of your business, such as employee morale, are relatively easy to tweak and adjust, but some other aspects like cost savings and financial sustainability are a bit of a hassle, especially if you’re just starting out.
In case you’re struggling to come up with some viable business cost saving ideas, don’t worry, we have a couple of money saving tips in store for you. Bear in mind that these aren’t strict rules but rather a set of comprehensive guidelines that may come in handy, especially for new bar owners. Don’t hesitate to apply some of these tips to increase your profits without making any radical changes to your business model.
Here are some of the most popular bar owners tips:
Reduce Waste to a Bare Minimum
You would be surprised by the sheer amount of waste that piles up when people aren’t paying attention to it. The important details are in little things such as overpouring alcohol, cutting too many lemons for tequila shots, or even giving away too many cocktail straws. Now, while these expenses seem pretty harmless and trivial, they can be quite costly on a larger scale.
In order to prevent waste, you have to identify the source first. If you’re noticing a massive consumption of lemons, don’t hesitate to incorporate plastic or metal squeezers to help your staff and alleviate the problem.
Furthermore, if you’re struggling to keep the flow of drinks consistent, buy a couple of jiggers and it should help normalize the issue. As you can tell, not all regulatory measures require a hefty budget; some are pretty affordable and yet incredibly effective.
Take Good Care of Your Employees
While the financial benefits of this particular step aren’t immediately apparent, rest assured there are many. One of the main rules of thumb in this industry is that your staff is one of your biggest expenses, but also one of your most important assets. It doesn’t matter how expensive and fancy your equipment is when there’s no one to use it. The same thing applies to the place itself, if it’s not filled with charismatic and capable staff, the beauty of the place is irrelevant.
Keeping your team of trustworthy people happy and satisfied is of utmost importance. Provide them with the tools they need, listen to their feedback, allow them to have a certain level of creative freedom, and you can rest assured their satisfaction will have a massive impact on your profits.
Enforce Strict Rules
This doesn’t mean you should punish the members of your staff for every little oversight and mistake they make, that’s a bad business practice. Instead, you should come up with a list of rules that are comprehensive, fair, and most importantly – not hard to follow.
Easy-to-follow rules exist so that you can hold someone accountable when something goes south. Needless to say, you have to set an example first by following the aforementioned set of rules yourself. Any abuse or a power-trip rampage will be noticed, and it’ll have a negative effect on your business. In fact, your relationship with your staff and readiness to enforce these rules can make or break a business, so handle it carefully and plan your steps accordingly.
Hire Someone to Handle Cash Flow Management
Many entrepreneurs decide to handle the cash flow of their business by themselves. While that’s not inherently a bad idea, it’s definitely not an ideal one. Depending on how busy you are and how much time you can dedicate to financial logistics, you will either see a massive improvement or a complete disaster. As you can imagine, not many entrepreneurs are willing to take that bet, and that’s why hiring a professional is a solid strategy.
By hiring an accountant, you are creating a bunch of new opportunities riddled with financial strategies that can and will help your business. After all, it’s always better to hire a professional and let them do their thing instead of wasting your own time trying to do the same thing yourself.
Invest In Good Equipment and Train Your Staff Accordingly
Even though investing in new equipment doesn’t seem like a smart step when it comes to saving money, it’s a viable strategy in the long run. Modern coffee machines, blenders, juice makers, and other appliances come with integrated smart technologies and offer a bunch of features that will save you money. For example, a modern juice maker will waste incomparably less fruit than its archaic and obsolete competitor.
Additionally, you have to make sure that your staff is actually capable of operating these machines. In other words, don’t hesitate to invest some money in employee training because it’s far better to train your staff properly than to let them rely on trials and errors. Consistency and proper management don’t come easy, but once you establish a good foundation, things become much easier to handle and execute.
Optimize Every Aspect of Your Business
Make sure you have at least some kind of an inventory that you can refer to when things don’t add up. Optimization is not easy, but once you get some things in order, the whole business becomes much easier to handle.
For example, if you’re serving food in your bar, make sure you keep an eye on the expiration dates of overstocked food. Similarly, don’t be afraid to use the same ingredients across the menu so that nothing goes to waste.
What many people don’t know is that you can optimize other things that aren’t directly related to food or beverages, and still save a buck. For instance, replacing the lighting in your bar with a new generation of energy-efficient units is a pretty safe strategy. Yes, it will cost you a couple of bucks to replace the whole system, but it’s definitely a worthy investment in the long run.
Incentivize Your Employees
Anyone who wants to keep their business practices at a high level must incentivize their employees with occasional rewards. This is a touchy subject for many entrepreneurs because it’s not exactly a money-saving strategy in and of itself. However, boosting up employees morale is proven to be a beneficial strategy for a lot of things, including saving money.
A reward system will force your staff to be more meticulous and careful, which consequently leads to massive improvements on multiple levels. In contrast, you should also enforce disciplinary measures for people who aren’t keen on following the rules. This should discourage your employees from doing any shady business.
Purge Unpopular Items From Your Menu
Contrary to popular belief, a large and diverse menu does not equal immediate success. In fact, it’s quite the opposite. Having a bunch of fancy and yet unnecessary items on the menu may come off as appealing to some people, but it’s a potential financial disaster.
For example, if you have a particularly unpopular meal on your menu, the cost of maintaining the necessary ingredients and ordering new when the current ones expire is far greater than the profit itself. Naturally, you should remove it from the menu and save a lot of money at essentially no risk.
Take Advantage of The Internet
The Internet is incomprehensibly vast, and it’s a perfect field for cheap and affordable advertising. Instead of printing hundreds or even thousands of ads, you should take a moment and check a few advertising campaigns that offer a good conversion rate for an affordable price.
Furthermore, you should create groups that represent your business on popular social media networks such as Facebook or Instagram. The creation of these groups is essentially free, although we would recommend setting up a paid advertising campaign on each of these platforms. It’s relatively cheap, especially if you consider the conversion rates and positive yield.
Set Up a Budget and Keep an Inventory
You can’t save money if you don’t have a reference point. In other words, you have to have a determined budget in order to cut losses where you deem it’s necessary. Bear in mind; the aforementioned budget shouldn’t be an arbitrary number but rather a precisely calculated amount of money that should be sufficient for both sustainability and error margins.
Keeping an inventory is much more challenging than it looks. Most people think that a simple Excel sheet will suffice, but it’s far from being the ideal solution. If you’re not keen on hiring someone to deal with the inventory, you should at least have some basic Excel knowledge and some accounting skills. In case you don’t, we recommend enrolling in a course as most of them are pretty affordable and quite effective.
Host Your Own Events
Many bars and restaurants hire bands and entertainers to boost their popularity. It’s a good strategy, but it’s often expensive and doesn’t always end up being cost-effective. Instead of paying for these events, you should host one yourself. For example, a live trivia event on Fridays would be a perfect start. It can last for a few hours, and while you probably won’t make any profit off of it, it will definitely boost your bar’s reputation and popularity.
It’s important to remember that the amount of saved money doesn’t always have to be tangible. In fact, you often won’t see a tangible pile of saved money, but that doesn’t mean you haven’t saved any. Saving money and making a profit is about controlling the flow of money instead of cashing in the discrepancies.
Keep Up With the Technology
The modern technology is constantly evolving, and it’s just a matter of time when new and more efficient units hit the market. That doesn’t mean you should update the whole infrastructure immediately, but it’s a good indicator that you should start thinking about gradually updating your equipment.
As you can imagine, it will probably cost you a bit of money to switch to newer equipment, but it’ll also save you a lot of money in the long run by improving the overall efficiency of your staff.
Audit Shifts Regularly
Even though the whole process takes 15-20 minutes, many bar owners decide against auditing shifts because it’s a tedious endeavor. If you want to keep your business practice on a high level, you will have to audit every financial report on a daily basis, and thus identify potential discrepancies on time.
This allows you to hold a particular member of your staff accountable for errors and avoid losing money on internal investigations.
If you want to find out more about similar subjects, don’t hesitate to read our other articles!