Chapter 18: Successful Bar Layout, Set Up, and Location
Opening a bar is a daunting prospect, and should not be taken lightly. You have to plan and pay for the initial outlay of supplies and drinks, arrange the legal aspects of opening, and hire new employees, all time-consuming and potentially expensive tasks.
OPENING A BAR — AN OVERVIEW
When opening a new bar, there are a few advantages to look forward to:
• The opening of a new bar will generate new interest and publicity on its own, especially in a place where no bar has been before. Newspapers may report on the opening on their own volition, and customers are likely to drift in even with little advertising, merely to “try the new place.”
• You will also be dealing with employees who will still be excited with their jobs and work hard to make a good impression on you.
Before opening a bar, you want to consider whether you will make a good bar manager. While the movies may make managing a bar seem simple, in real life successful bar owners and managers require a few specific traits:
• Are you personable? Bar management is largely about the people, not the drinks. If you want to operate a successful bar, you will do much better if you genuinely enjoy spending time with people (employees and patrons alike) or are willing to hire someone who will perform this function for you.
• Can you get the startup money? In addition to renting or buying a space for your establishment, you will need to budget for purchasing supplies and hiring your employees. You will also need to pay for a liquor license, advertising, and legal costs of starting a bar business.
• Do you know what it will take to set up a bar in your area? Spend some time looking at bars in your area with a critical eye. Talk to friends and family about their favorite establishments. Get a sense of why people go to bars and what sorts of bars are successful. What needs have yet to be filled by a bar or establishment in the area?
• Can you take care of the legal and business aspects of running a bar? Most governments closely control the running of a bar, but exact legalities differ from area to area. Contact your local municipality to find out which forms and licenses are needed to open an establishment.
MARKET RESEARCH
In market research, you will learn about your customers (or potential customers, if you have not yet opened for business) and your competition. Basically, you are trying to find out the answer to one question: What do my customers want?
Successful bar owners know who their customers are and focus their marketing and advertising on these customers to ensure a steady profit. Successful bars provide services and products more effectively than the competition.
WAYS TO CONDUCT MARKET RESEARCH
Hire a Market Research Company
In your local phone book, find companies that are willing to help you. The big advantage of hiring a market research and analysis group is that you will get professional market research results in a short amount of time. These companies use strategies such as customer polls, focus groups, online and in-person surveys, telephone surveys, and product testing to help you decide who your customers are (or who they could be) and what they want. The companies will interpret the results so that they are perfectly clear and understandable.
The major disadvantage is cost. These companies charge money for their services and this outlay of funds can seem very large. If you are unable to afford a market research company, consider saving up to hire one after you have been open for a while — the insight you can gain from a professional market analysis can be a big help in maximizing profits.
Do Your Own Customer Market Research
If you cannot afford to hire professionals, you will have to invest your own time and effort into learning about your customers. You cannot skip this stage of planning a business. Without knowing your customer base, you simply will not have the information needed to make the right decisions about pricing, marketing, bar décor, and almost every other aspect of opening a bar. What you learn in your market research will literally affect every aspect of your business and will make all parts of your business more profitable.
You can do your own customer market research by asking customers or potential customers questions. The easiest way is to have volunteers ask acquaintances or co-workers a few questions. Have questionnaires printed so the volunteers can record the answers. Keep questionnaires short and to the point. If you have not yet opened, ask questions such as the following:
• When traveling, what was the best bar you visited like? (This question will help you establish what people like and what they might like to see in their own hometown.)
• When do you go to bars and pubs?
• How often do you go to bars and pubs?
• What do you like about bars and pubs? (The answers here will give you a sense of what customers are looking for.)
• What types of bars or pubs do you visit?
• What do you wish were different about bars and pubs? (Listen closely to the answers to this question — the answers will give you some ideas about what the competition is missing.)
• What sort of bar would you like to see open in the city? (The answer to this question will give you ideas about niches that your bar could fill — and what the customer response might be.)
• What is the best drink you ever had at a bar?
• Describe your best customer service experience at a bar. (The answer will give you a sense of what your staff should be like to create enthusiastic customers.)
• How much do you usually spend per drink and what sorts of drinks do you order on a night out? (This question will give you an idea of what you need to offer and what prices you need to set to draw in customers.)
• Name your three favorite bars. How did you find out about each? (You get an idea of how to advertise to attract customers to the bar.)
• Tell me a few things about you (Note the sex and general age of each respondent. You want the basic demographics of each person to better analyze your market research.)
If you already have a bar, you still need to do market research. Offer your customers the chance to take a survey. You will get the best results if you offer a chance to win a prize in exchange for their participation. Have customers leave their first name and phone number on the survey and place each completed survey into a drawing for a nice prize. As an added bonus, you can also suggest customers provide their e-mail addresses for notification of upcoming events at your bar. For those customers who want this service, e-mail ads are a great and inexpensive way to promote your bar.
You want to do this type of market research occasionally once you are in business. Although going through the surveys is time consuming, it can tell you exactly what customers want and need. Better yet, regular surveys will let you know whether your customers (or their needs) are changing and whether you need to make changes in order to keep up.
On questionnaires for your existing customers, you want to ask similar questions asked of potential customers, but with a few differences:
• Demographic information. (Ask customers where they live, their age range, and their occupations. This information tells you who comes to your bar the most and who you need to target in ads and in the bar’s appeal.)
• What was your server like? Were you satisfied with the service? What did you like/dislike about the way your server handled your order? (You find out how your employees are doing in making customers happy.)
• Where did you first hear about us? (You find out which of your marketing strategies is actually working.)
• Would you come to this bar again? (Lets you gauge customer satisfaction.)
• How often do you come to this bar? (Lets you see who your regulars are.)
• How often do you visit establishments like this one? (Lets you see how often the competition is getting business that could be yours.)
• What would you like to see changed at this bar? What would you like to see offered? (Here you get useful suggestions for changes or expansions.)
• Are the hours of business convenient? (If they are not, you may well be losing business.)
You cannot be shy about talking to others about bars. You do not need to announce that you are the owner of a new bar. Simply ask others about their bar experiences. Many people enjoy talking about themselves and will be glad to offer feedback. Talk to others, even to your competition’s customers. You never know what you will find. There are other ways besides asking questions to find out who your potential customers may be, including the following:
• What is around your bar? If you are close to a college, you can expect college students to pop in and you can build a respectable business by creating a student-friendly atmosphere that will draw in students eager to unwind after a long day. If your bar will be located near a factory, find out about the drinking and eating habits of the workers there — many may be interested in dropping in after work for a pint. If there are businesses near your bar or pub, consider who might come into your establishment for a business lunch. Your bar’s location can be an important clue as to who your potential clients may be.
• What other establishments are in your area? Chances are if there are other establishments in your area, they cater to a specific set of people. These same clients may be willing to come to your establishment. If your bar is located near boutiques that cater to women, setting up a cozy place where “the girls” can meet for a chat after shopping may be a savvy business strategy. If your bar is located near strip malls that sell auto parts to car enthusiasts and car mechanics, consider that these same clients may be willing to drop by your place for a quick drink and snack before heading home. If your bar will be located by several tourist traps, then a bar with plenty of local flavor may appeal to visitors eager to relax after sightseeing. The idea is that the stores and businesses near your bar’s location are already marketing and drawing regular customers — you can attract these same clients simply by making your bar appealing to them. It is a very simple idea with a big profit potential.
• How many bars are in the city and what are they like? Researching your competitors is covered in detail in the next section of this book, but as you are researching your customers (or potential customers), be aware that they do not live in a vacuum. If they already have a sports bar that they frequent you may need to offer something different or better to draw loyalties away from the competition. Your customers are looking at other bars — and visiting them. Have an idea of where your customers are going and why they are going there. Get a sense of why they might come to your bar instead.
• What was previously in your location and who frequented it? If your establishment was a bar before (or a restaurant or other shop), find out who frequented it. You may find that the same groups of people are still willing to eat and drink at the “new” place.
• What is not in your area? Consider what types of bars are missing in your city or town. Is there no quiet bar that appeals to the artsy crowd? Is there no jazz bar? Is there no loud bar that is also a great place to dance? Research your customers well to make sure that there is a need. If you do see a need that is not met, jump at the chance. Being able to fill a need is a great way to ensure your bar’s success.
• Do not be afraid to ask people you know. Acquaintances, friends, and family all have their own ideas about bars. Ask them where they go and tag along on a trip to the bar. Ask them what they like and dislike about their favorite bars.
Once your market research is complete, analyze your findings. Do not ignore the market research because your idea of the customers you want to attract is different. If your market shows that most of your paying customers are going to be blue-collar workers, it is best for you and your business to follow the market research rather than your own ideas of what will work.
At the same time, you should not make every change that customers want. Not only will it be a very expensive venture, it may make the bar too hectic. Instead, when you are looking at your market research, look for patterns:
• Who are your customers? What are their ages, sex, and occupation? Do you have a different crowd at lunch, a different one in the early afternoon, and a different one in the evening? If so, divide the surveys into these crowds to find what is needed at each “peak” hour.
• What do your customers want? Again, look for patterns. You may hear about everything from jukeboxes to bands. What your customers may be saying is more entertainment. Provide some of the customers’ wants and always try to provide those things that do not cost extra (Friendlier atmosphere or wait staff, for example, often is demanded by customers and only costs the bar manager effort.).
• Ask yourself what small changes could meet the most customers’ demands — and then implement your changes. A few small changes can have as much influence as a larger, more expensive change but at a smaller cost.
THE COMPETITION
Your competition is the other bars and restaurants with bars. Ignore your competition at your own peril, because as savvy bar managers know, what the competition is doing may have a big impact on your business. There are several things you will want to know about your competition:
• Who are they? Look in your phone directory at the bars and pubs in your area. Review ads to determine which bars are your most direct competitors (either because they are close to your establishment or because they seem to be appealing to the same customers who will be visiting your bar).
• What are they like? Try to get a sense of the selection, quality, service, and atmosphere of each competitor. Getting a sense of the competition gives you insight into what will lure customers your way.
• Who visits them? Which customers does your competition attract? College students? Businesspeople? Blue-collar workers?
• How do they advertise? Look at the ads your competition runs and analyze them. To whom are they appealing? How effective are they? Where does the competition advertise the most? Often bars that are successful have already done the market research that tells them which ads bring in the largest profits. You can learn a lot about a successful ad campaign by looking at a successful competitor.
• What do they offer? Which drinks does your competition overlook? Which drinks are hot sellers? What sort of menu or extras (gambling, live acts, jukeboxes) does the competition offer? Knowing what your competition offers lets you know what you need to offer. If every competitor offers local draft beer because it is a hot seller, then you need to offer it as well. From what the competition offers, you can also get a sense of what is missing. Do no bars in your area offer specialty coffees even though your market suggests some customers want it? Offering what your competition does not—and advertising exclusive availability at your bar—is often a good way to draw customers. You will know what to offer if you research both your customers and your competition.
• What are they doing right? Bars that draw plenty of customers are doing something right. If you can pinpoint what that something is, you will have learned a key lesson about what your bar needs to offer to draw customers. Is the competition able to offer many specialty drinks? A great atmosphere? Super service? A wonderful location? A view? Special events? You can learn a lot from a successful bar — and then tailor what you have learned to your own bar.
• What are they doing wrong? Try to figure out what the competition is not doing correctly — and then do it right at your bar. Is the hot bar in the city a beautiful place to drink but offers slow service? Offer speedy and friendly service as well as an attractive atmosphere and you will get plenty of customers to your bar. If you notice something wrong at a competing bar, chances are that customers notice too. They will be glad to visit a bar that offers a better experience. Look into bars that seem to be doing plenty wrong — the bars that seem to be empty every night. You can learn as much from these bars as from the successful ones. If you can pinpoint what the failing bars are doing wrong, you may be able to avoid their fate.
• What are their busy nights? What are the slow nights? Figure out what the “hot” nights are for the major competitors. You may want to hold your own big nights on other evenings to avoid the well-established competition. You may want to hold smaller specials on the big nights to draw those customers who cannot get into the crowded bars.
• What are the prices? Look at your competitors’ prices; they are what they are for a specific reason. Can you under-price them (and if you can, will that draw customers)? Can you offer something more? Your prices should not be much higher or lower, but slight differences can make your bar successful.
There are several ways you can learn more about your competition:
• Visit them. The best way to see what your competitors are like is to visit them as a customer. Sit down at a competing bar, order a drink, and look around. What is the bar like? How are customers treated? Who is in the bar and how content do they look? What is the quality of the food and drink? What is the quality of the service like? Often the best research you can do on a competing bar is the research you do with your own senses. Visit as many bars as you can before you start to set up your own. There is nothing like being a customer to see what works and does not in nearby bars.
• Talk to their customers. Strike up conversations with your competition’s customers. Talk to them about the bar and ask them what they like about it, where they heard about it, and what they think of it in general. Do not sound like an interrogator; simply strike up a conversation to find out how other customers see a particular bar.
• Read their ads and press. The competition spends plenty of time marketing and advertising. Read what they have to say about themselves; you can gauge what they offer and who they are trying to entice. Some bars use very good marketing strategies that you can incorporate into your own marketing and advertising. You will also see some costly advertising mistakes to avoid.
• Read guidebooks and reviews. Reviews online and in newspapers and guidebooks can give you a good sense of what others have to say about the competition. You can easily get another perspective on what a competitor is doing right or wrong. Use this information to do the same things right while avoiding the same mistakes. Reviews are a great way to see what is missing. If your top three competitors get poor reviews for service and great reviews for atmosphere, then you can provide excellent service. Even if you cannot hire the same expensive decorators, offering something that the competition does not can help ensure your bar’s success.
BAR LAYOUT (NUTS AND BOLTS)
The nuts and bolts of your bar are the basic structures that are in place. If you are leasing or have bought a facility that was a bar before, you may not think about this aspect of your bar. Even if you had to build up your own bar and eating areas, you may not give much thought to the way your bar is set up. After all, a bar is just a bar, right? Wrong. The mechanics of your bar setup can affect your success because it can affect customer experience.
LAYOUT OF A TYPICAL BAR
BAR HARDWARE
The way your bar operates depends on many factors, one being the machinery of the bar. Sometimes, the bar just is not set up to allow maximum productivity. Think about productivity and your staff before you think of décor. The look of your bar is important, but service is more important. If you set up your bar to allow for the best possible service, you will end up ahead of the competition.
A good bar allows staff to move around easily. A busy bar that allows only one bartender behind the bar at a time is sure to be a disaster, no matter how tastefully designed. A good bar also has plenty of room for supplies. If your staff has to keep running to the storage area for more drinks, they will get worn out and will serve fewer customers. Each drink will also take longer to make. Have enough space behind the bar for an extra refrigerator to store drinks. Here are some additional tips:
• Make sure that the bar design is simple and easy to clean. Too many details look garish and make cleaning difficult. Smooth surfaces not only look less cluttered, which is more attractive to customers, but they are easy to clean. A good bar should be impressive upon first glance. An expansive selection of spirits and liqueurs can be just as impressive. So, too, can a personable, neat, and tidy bartender in a well-pressed uniform, greeting the customers like an old friend. When a customer finds anything less than clean about a bar, the impression he or she takes home will be a bad one. A smart bar design can go a long way toward helping staff keep your establishment spotlessly clean.
• Avoid tight corners. Some surfaces are easier to keep clean than others. Tight corners collect “bar gunk.” Your customers expect a comfortable level of cleanliness. Anything less is likely to draw their wrath, if not the attention of local health inspectors. Make sure your employees keep any tight corners as clean as they keep the flat surfaces. Do regular inspections to make sure.
• Make it a habit to line all ice sinks with a plastic trash bag. Whenever your staff needs to clean out the sink (either because of a broken glass or as part of regular bar cleaning) you can simply remove the bag — ice, water, and all. It is easy to replace, without inhibiting service.
• Glass areas should be scrubbed several times a day. These areas should always be out of the customers’ field of vision. Your customers should never glimpse your bar’s engine. Ensure that all boxes, empty glass racks, and dirty glasses are kept out of eyesight, either in “under-bar” sinks or out-of-view back-bar areas.
SEATING
A good bar is attractive and comfortable. The seats at the bar should be padded and comfortable. Tables should be heavy duty and beverage-friendly. If your bar décor or lack of bar comfort is sending away customers, then your bar design is costing you money.
For various high-quality products, check out Royal Industries, Inc. www.royalindustriesinc.com. They manufacture a full line of food service products and furniture including:
• Restaurant seating. Commercial restaurant and hospitality quality seating, durably constructed, and offered in hardwood, bistro style, metal stackable, and youth chairs.
• Bar stools. They offer metal bar stools in both standard (pictured at right) and bucket seat models.
• Table tops and bases. With heavy-duty reversible table tops, cast-iron table bases, and spiders, these tables are very durable products.
THE FRONT BAR
The front bar is essential to pleasing customers and ensuring a loyal clientele. Make sure that your front bar is not too wide. Many bar managers assume that a wider bar is better as it allows for more room, but a wide bar can crowd out a bar staff and make it quite hard for your staff and customers to chat and interact. If a customer has to yell over a wide bar to make his drink order heard, he is unlikely to return to your bar.
When designing your front bar, be sure that the space above the bar is not ignored. Traditionally, mirrors are placed behind and above the bar; it is a poor idea. They take a lot of time and money to clean and look foggy and dingy very quickly. Menu boards or artwork are better and less expensive options. Make sure that the area behind the bar is attractive and you will draw more customers. Keep a selection of inventory attractively displayed behind the front bar — it not only adds interest but can inspire customers to buy. Keeping menus or products before customers’ eyes can tempt patrons and allow them to order easily, reducing the time your staff needs to explain the bar’s offerings.
When well designed, your front bar should give patrons a clear idea of what is offered without interfering with their line of vision or distracting the bar staff. To get a sense of whether your bar is well designed, order a drink yourself and see how easy the staff moves to get your order prepared. Consider your own actions: Do you need to crane your neck to see a menu or to order? In a well-designed bar, both the customer and staff should be comfortable.
STREAMLINING SERVICE
When designing your service area, consider the necessary steps to prepare a drink and make these steps as few as possible. The fewer steps your bartender needs to get a clean glass, to scoop ice from the ice bins, to get drinks from the spirit dispenser, and to get the drinks from the soda guns, the easier each night’s business will go. If your bartender has to walk to get each of these items, and then walk to yet another location to use the cash register, productivity will fall during the course of a night, even if each station is only a few steps away. If there is more than one bartender on duty, a bad setup can encourage spills and short tempers.
The service area should be large enough to handle more than one bartender comfortably. Everything needed to prepare drinks should be within easy reach. Since most people are right-handed, your bar should allow staff to pick up glasses with their left hand and bottles with their right. The floor of your bar should be uncluttered and contain no portable steps so that movement is not encumbered.
Consider keeping the most popular bottled beers in buckets of ice under the bar. That way, staff can easily produce these bottles when it is busy. During slower times, these buckets can easily be refilled with ice and beer, dramatically cutting down on unnecessary trips to the refrigerator.
THE UNDER-BAR
Your goal in designing your under-bar is to make it as productive as possible. The under-bar should have everything your staff needs to prepare most of their orders without walking away from the bar, ensuring fast service and allowing the bartender to strike up a quick conversation with the customer as the drink is being prepared.
FLOORING
When designing your bar area, do not overlook flooring. The customer area of the bar should be attractive and safe. Add anti-slip and anti-fatigue floor mats behind the bar area. These mats will help keep your staff comfortable during shifts and will prevent slips and glass breakage.
Grip Rock and Super G floor mats by Matrix Engineering are durable, long lasting, and lightweight. The Grip Rock safety mat was designed to be slip-resistant in wet, hazardous areas. This makes it especially useful behind the bar and in areas conducive to slips/falls. For more information, visit www.griprock.com or call 800-926-0528.
CLIMATE CONTROL
Body heat, cigarette smoke, sweat, outside temperature, and dance floor fog systems all affect the comfort-level of the bar. A too cold or muggy bar makes patrons feel like leaving. You can resolve this problem with a few handy devices and appliances:
• A fresh-air exchange system. An addition to your heating, ventilation, and air-conditioning system. It works by constantly bringing in fresh air from outside. Casinos use these systems to keep patrons from feeling sleepy. These systems can make any bar seem well-ventilated.
• Fresh-air ducts. These are especially useful over dance floors. It works by allowing you to bring in large bursts of fresh air from outside whenever you decide that conditions are too clammy.
• A smoke extraction system. This type of system can help remove smoke and purify the air.
• Heating. Whether you choose electric, gas, or a fireplace, make sure that your heating system is doing its job on cold nights by keeping your customers comfortable.
• Air-conditioning. Air-conditioning can help keep your bar nice and cool on hot days. It can also drive up your electricity bill. Many bars find that offering a patio and fans helps keep things cool as well.
CUSTOMER COMFORT
The longer customers stay, the more they order. Make chairs comfortable, ensure tables are not wobbly, lighting is comfortable, and music is at a good level. Install booths—they tend to make customers linger longer. Allow your customers to lean comfortably on the bar without getting cold elbows.
Do not overlook the bathrooms. Keep nice-smelling soap in the bathrooms and easy-to-access paper towels or dryers. Extra touches in the bathrooms, such as sofas or small mint candies by the sinks, can make customers feel pampered and more likely to come again.
COLOR SCHEMES
Research has shown that certain colors promote specific feelings in consumers; in restaurants decorated with reds and yellows, customers are more likely to experience hunger and may have a harder time settling down and relaxing — which may explain why so many fast-food places tend to use this color scheme. Researchers think that red and yellow may prompt a person who is already hungry to order more than they would if those colors were not present. Red and yellow are also likely to make a customer move on quickly once their money is spent, which is also ideal for the fast-food business.
Blues and greens, on the other hand, are likely to make customers settle down, according to researchers; thus, these are a better option for a bar that wants to encourage patrons to stay awhile.
BAR RECIPE AND PROCEDURE MANUAL
The purpose of the Bar Recipe and Procedure Manual is to ensure that the methods of preparing all cocktails are consistent among your bartenders. Drinks can be prepared in many different ways. It is imperative that all recipes and procedures are standardized to ensure that both the final product and cost is consistent. All recipes and procedures for preparing drinks should be written down and given to all staff members. Your bartenders should be tested to ensure that they know how each drink should be prepared. The Bar Recipe and Procedure Manual should be kept under the bar so that it can easily be referred to. It is an essential part of your bar’s layout.
LIQUOR AND BEER ORDERING
Liquor ordering is not as involved as purchasing food items. There are fewer problem areas to contend with. Liquor has a long shelf life and will rarely turn bad, which enables it to be ordered in large quantities on a less frequent basis. Moreover, the quality is always consistent among distributors: They all carry the same products. It is far simpler to compare prices and terms knowing that each supplier has the same item. Once you establish which well and call brands you wish to serve, ordering should only involve projecting your needs and purchasing from the distributor with the best overall terms.
Each state has its own laws and regulations regarding the sale and distribution of alcoholic beverages. States may be divided into one of two classifications: those that permit private businesses to sell and distribute liquor and those that have a monopoly on the sale of liquor (usually excluding beer and wine) and sell through state-run stores. There are advantages and disadvantages to both situations.
SETTING BAR PRICES
Setting proper bar prices is an easier process than that of establishing menu prices. The procedures are basically the same; however, there are fewer cost factors to contend with in projecting liquor costs. The bar should operate at 18 to 25 percent cost of sales. Cost of sales is determined by dividing the total liquor cost by total liquor sales. This figure excludes wine, as it is considered a separate category and projected as such. As stated in Chapter 5, “Profitable Menu Planning,” the cost of sales is the total cost over a given period of time, usually one month, divided by total sales. If the monthly total liquor cost was $10,000 and the total sales were $50,000, the cost percentage would be 20 percent.
To set the proper bar prices, it is necessary to calculate the cost of the cocktail. The cost refers to the liquor, mixers, and garnishes used to make the cocktail. Labor, ice, and glassware are not actual liquor costs and are computed in other categories. There are two cost factors to consider when computing the cost of a cocktail: 1) the cost of the shot of alcohol poured and 2) the cost of all the miscellaneous nonalcoholic ingredients.
To project the cost of each shot poured:
• Using the conversion chart convert the metric measurement of each bottle into ounces.
• Calculate the number of shots yielded from each bottle by dividing the bottle volume (in ounces) by the size (in ounces) of the average shot poured.
• Divide the cost of the bottle by the number of shots it should yield to compute the cost per shot.
To project the exact cost for each cocktail, it is necessary to calculate the cost of the nonalcoholic ingredients that are added. Since this computation would entail many hours, it is far simpler and nearly as precise to assess an average miscellaneous expense for all drinks. The average miscellaneous cost would account for the additional cost of juices, mixers, garnishes, and soda. This miscellaneous-expense figure would not be applied to beer or wine since there is no additional cost to the final product.
CONVERSION CHART FOR LIQUID MEASURES
Research shows that the average miscellaneous expense fluctuates between 5 and 20 percent of the cost of each shot poured. Of course, this figure will depend upon the type and number of drinks you serve. Blended drinks will have a high percentage of cost since they contain several different ingredients. To compensate for this additional cost, most restaurants pour a smaller shot (1¹⁄8 to 1¼ ounces). Straight drinks and beer will help balance out this cost since they have no additional ingredients. Based upon this information it would be accurate enough to assess the miscellaneous expense at 10 percent of the shot cost. Thus, the cost of each shot plus the average miscellaneous expense will equal the estimated total cost of the drink.
To compute the charge for each drink, simply plug different prices into the formula listed below until you reach the desired liquor cost-of-sales percentage:
Total Drink Cost ÷ Price = 18–25% Liquor Cost of Sales
Certain expensive liquors, when priced out to get the desired cost-of-sales percentage, will be too expensive. Customers may not pay the price you would need to charge to reach the desired 18 to 25 percent.
Analyze what other restaurants in the area are charging for cocktails. When you first open, customers tend to be cautious. A reputation for overpriced drinks can be detrimental to your restaurant business. Should you have entertainment in the lounge, you may raise drink prices to offset the entertainment expense, a common and generally accepted practice.
Set as few different bar prices as possible. Bartenders and cocktail waitresses will have a difficult time remembering all the different prices and may inadvertently charge the wrong price. The ideal pricing structure is to have one price for each category of liquor: well items, call items, and cordials and liqueurs. Beer may also be grouped into three basic price categories: domestic, imported, and draft. Categorical prices may be set by averaging the high- and low-priced drinks and considering the number sold of each. The high-cost sale items will be offset by the sale of the lower-cost ones, resulting in the average cost-of-sales percentage desired.
Juice and soda prices should assimilate those set by area restaurants. These items are often compared by customers, as they are sold in all restaurants. Soda can be used as a promotional tool to attract teenagers and adults with children. Free soda with dinner and free refills are common inducements. The small cost factor involved in initiating these promotions makes them a good promotional vehicle.
The “Happy Hour,” a period of time when drink prices are generally reduced, can be an effective means of increasing bar sales. To be substantiated, it must draw a large volume of customers. “Happy Hours” are often run prior to opening the dining room, usually between 4 and 6 p.m. Drinks are sold at half-price or at a substantial discount. Hors d’oeuvres and salty snacks, which will induce the customers’ thirst, are often served.
To offset the increase in the cost of sales due to the lower drink prices, total liquor sales must be increased substantially. A restaurant that lowers all drink prices by 50 percent during “Happy Hour” will be doubling its cost of sales.
LEGAL ADVICE
Legal issues will affect your business right from the start; bars are simply more closely regulated than other types of businesses. As a bar manager/owner, there are several types of laws that need your attention:
• Bylaws regarding signs and advertising
• Zoning bylaws
• Employee regulations and laws
• Fire regulations
• Safety regulations
Most bar owners worry about lawsuits — and with good reason. There have been many cases in recent years of bar owners/managers being sued as a result of a drunk patron’s actions. Bar managers/owners can also be sued by employees if work conditions are unsafe. To legally protect your business, there are a few things you can do:
• Hire a good lawyer.
• Do all you can to make your bar a safe place.
• Get the very best insurance that you can.
A good lawyer is helpful. He can represent you in case of court action and in some cases can help avoid court action in the first place. Your lawyer can ensure that everything in your bar is legal. Do your research for a good business lawyer well before you ever need one. Choose a lawyer or law firm that you are confident in. You may require a lawyer to witness some of the forms you need to open your bar.
intoxication
Make sure your bar staff know the signs of intoxication. It is the greatest concern for a bar. Intoxicated customers can create legal problems through their actions. Long before you open your bar’s doors, you and your staff need to be prepared to deal with intoxication.
• Develop an alcohol sales policy. This type of policy generally includes a description of federal, state, and local laws that govern the sale of alcohol in your area. This information should be clearly and briefly written to make sure that your servers can understand and remember it. Your state department of alcohol and local chamber of commerce will have easy-to-understand legal information about alcohol sales. Your alcohol sales policy should also include the bar’s own rules for servers. Basics such as not selling to minors and not selling to intoxicated customers should be part of these rules. You may want to put a policy into place that requires a server to notify the manager about any customer who has had more than four drinks. The manager can look at the situation and determine what to do. You may also want to set up a relationship with a local cab company in case you need to suggest a cab for a customer.
• Make sure servers are aware of alcohol laws. Test each server on her knowledge. Your state’s department of alcohol regulation will generally have informational guides and even testing materials you can use.
• Train your servers to serve alcohol responsibly. MYou should have a documented alcohol service training program in place that covers the effects of alcohol, blood alcohol concentration levels, and alcohol’s effects on the body. The Responsible Serving of Alcoholic Beverages: A Complete Staff Training Course for Bars, Restaurants, and Caterers is an excellent manual that covers all aspects of alcohol service in depth and has a comprehensive in-house training program that is easy to set up, customize, and implement. It comes with a CD-ROM that contains all forms and training materials discussed in the book. To order, contact Atlantic Publishing at 800-814-1132 or order online at www.atlantic-pub.com (Item # RSA-01, $49.95).
• Make sure your rules are clear and are followed. Make your employees fill out forms to keep track of customers’ alcohol intake if there appears to be a potential problem. Have servers offer a menu to any customer who is only drinking or offer a free appetizer to a customer who has had a few drinks. Ensure that servers are checking IDs and that the amount of alcohol poured into each drink is measured.
• Make sure your server gets management involved in any incident involving an intoxicated customer. Document everything that occurs. The best way to ensure that you and your staff can handle an intoxicated customer is to make sure that everyone working at the bar knows what to do with an intoxicated customer.
Many people think that alcohol stimulates. Certainly ads suggest that alcohol creates a fun time. Alcohol alters moods and affects the body functions — it acts as a depressant. As the bloodstream absorbs the alcohol that has been consumed, the body is affected. It is only when the liver removes the alcohol from the bloodstream by oxidizing it that the body returns to normal. It takes time for this process to take place. Folk remedies such as strong coffee or cool water will not help. A person needs to stop drinking alcohol entirely and allow the body to cope with the substance already in the system.
It is not always easy to tell when a person has over-indulged. In many cases, a person will sit quietly and keep drinking so that servers will not see visible signs. Each person can drink different amounts before being negatively affected. Larger men and frequent drinkers often have a higher tolerance and their bodies will be able to handle larger amounts of alcohol. Patrons who drink slowly and drink on a full stomach may also take longer to experience the ill effects of alcohol than patrons who drink quickly and on an empty stomach.
You do not want to “cut off” someone who is simply having a nice time. It is your legal responsibility to cut off any patron who is drunk. There are several ways that you and your staff can tell when a patron has had too much alcohol:
• Patron will get louder and may become friendlier, possibly accosting staff or other patrons with familiarity (this usually is thought of as the first stage of intoxication).
• Patron may have motor skills affected by alcohol, meaning speech will become slurred, walking will become unsteady, and may have a difficult time picking up change or a coaster. At this stage, usually called the second stage of intoxication, the patron may become more difficult, even aggressive. Patrons at this stage may also start swearing, complaining, or may become withdrawn. They will usually drink more at a faster pace and become careless with their money and their surroundings, dropping change or bumping into others.
If you see the above signs, you need to stop serving the patron. An intoxicated patron who makes a scene when not served can be a nuisance and a distraction to other customers. There are several ways to ensure that dealing with an intoxicated customer is less of a hassle:
• Try to prevent a customer from becoming out of control in the first place by having the establishment’s alcohol serving policies firmly in place. Staff should refuse to serve any patron more than one drink at a time. Patrons should be offered a menu if they are drinking, as food in the stomach can slow down the speed in which alcohol is absorbed. Prevention is your best bet in avoiding problems associated with an intoxicated patron. Impairment begins with the first drink and the savvy bar staff will work hard to ensure that impairment does not turn into intoxication.
• If a patron does get intoxicated, it is important that staff react while the patron is still at the first stage or early in the second stage of intoxication. At this stage, the patron’s drinks should be slowed down and the patron should be offered a menu.
• Try to avoid direct confrontation with an intoxicated patron. Staff who notice someone who has consumed too much should alert the manager and slow down service to that patron.
• Staff and the manager should start paperwork as soon as they notice that a patron has had too much. This paperwork should include a quick inventory of the date, a description of the patron, a listing of when the patron was served, a list of the drinks served, and a description of any events or conflicts that occurred. In case of legal trouble or a patron complaint, staff will have the information needed to show that the bar acted properly.
• If avoiding serving the intoxicated patron does not help, the manager should be called. The manager should treat the complaint as a regular service complaint, apologizing for the inconvenience but quietly and firmly noting that the bar cannot legally serve the patron. Many bar staff members shy away from this sort of direct confrontation, as they fear how such a conversation will look to other patrons. When handled firmly but politely, this sort of chat can help make other patrons more comfortable with the bar, as it shows other guests that the bar is serious about keeping customers safe.
• Where appropriate, intoxicated patrons who have been refused service should be offered something else, such as a free nonalcoholic beverage or a free snack, to keep the customer happy and to allow the customer time to “sober up.”
• The patron may continue to argue loudly. If the patron becomes a problem or starts to distract other customers, she should be asked to leave. The manager will want to offer the patron a taxi cab, as it is important that the patron arrive home safely.
• Do not worry if the patron threatens to never come back or to patronize another bar. Be secure in the knowledge that you are protecting the patron, other customers at the bar, and your own business by refusing to serve someone who has had too much to drink. It is better to err on the side of caution and risk offending someone rather than continue serving someone who will be in an accident as a result of her intoxication. Most patrons will respect a bar for being firm with an intoxicated customer. These customers will continue to come to your bar.
MINORS CAN MEAN MAJOR LEGAL PROBLEMS
Serving alcohol or selling cigarettes to a minor is illegal. Unfortunately, many minors routinely try to get served. Minors can be quite a nuisance to bar managers. What is even more frustrating for the bar manager is that minors caught drinking will rarely find themselves in much legal trouble, but the bar that served the minors will generally face an entire array of legal problems and may be shut down. The problems will be worse if the minor is involved in another illegal activity or is hurt or injured after drinking. Every bar manager needs to make sure that no minors are served at the bar.
There are a number of ways that minors attempt to get served. The most popular method is by using fake IDs. Unfortunately, with scanners and high-quality printers available to almost every high school student, fake IDs are easier to make — and harder to spot.
Make sure that all employees check the ID of anyone who seems underage. Train your staff to spot fake IDs. Staff should first look at the type of ID being given to them. Acceptable forms of ID include driver’s licenses or state identification for non-drivers, passports, and United States Uniformed Service Identification. The ID must contain a picture, the person’s name and date of birth, a physical description, and a signature. The ID must be valid to be accepted at the bar.
Fake IDs can be spotted a number of ways. Marks or cuts around the date of birth or different fonts within an ID are often giveaways that it is fake. Valid IDs have protective holograms. Look for these features. You can help your staff by getting an ID checker, which uses the magnetized strips on IDs to check whether they are fake.
If you are unsure whether an ID is valid or fake, it is acceptable to ask for another piece of ID. Many adults will have more than one piece of identification and will be happy to show it to you. Even other picture ID can show you whether the names and signatures on the various IDs match or not.
Some minors simply borrow valid ID from someone who looks like them but is older. Since the ID is valid, it is harder to detect. If you suspect that a minor is trying to get into the bar this way, you can ask the minor for a signature sample to compare to the ID. Many minors will get nervous and leave before signing.
Some minors will simply drop by a bar with drinking-age friends and drink the beer served to the friends. Many bars counter this problem by not allowing minors into the bar without parental supervision.
Some minors simply rely on looking older than they appear. With some makeup, older clothing, and the dim lighting of many bars, it is not difficult for a seventeen-year-old to appear several years older. One way to counter this problem is to simply ask all patrons under the age of thirty to show their IDs. Older patrons will actually be flattered to be mistaken for someone younger and few patrons will mind that you are taking such care to prevent underage drinking.
Some minors will even attempt to bribe your bartender or rely on friends that they have on staff to get served. The best way to prevent this problem is to make sure that your staff is reliable and trustworthy. Savvy bar managers always run background checks and will often send in an older teenager as a test to see how staff is able to detect and deal with the minor.
It is important to stress that you will never be angry about staff turning away someone who they think is underage. Tell your staff to trust their gut feelings and give them specific actions to take if they suspect that someone underage is trying to enter the bar or order a drink. Staff should fill out a denial-of-service form for turning away a minor, just as they would for turning away someone who is intoxicated. They should write down the time, date, a description of the person, and why they felt the person was a minor. In case of any problems, this paperwork will help your bar with any legal hassles.
OTHER FACTORS THAT MAY LEAD TO LEGAL PROBLEMS
Sexual crimes and harassment
Where drinks and groups of people are involved, it is always possible that some person will try to grab or sexually assault another. Many cases of date rape or sexual assault involve alcohol. The best way to defend female customers and staff is to refuse alcohol to anyone who is intoxicated.
In some cases, a man may begin with leering or saying obscene things. He should be promptly evicted from the bar at this point and security staff should not let him in again. A zero-tolerance policy is best in these cases. A few men who seem to be following or crowding around a woman should also be approached. The woman in question should be asked if she needs a taxi cab called on her behalf.
One common problem today is date-rape drugs. These substances are often introduced into drinks at bars and parties. The victim loses consciousness or becomes unable to fight off her attackers. Ensure that only the bartender or qualified staff has access to drinks and mixing equipment. Servers should be alert for signs of intoxication or illness in someone who has not had much to drink. If it is suspected that a drug has been given to the customer, police should be called and the victim should be given medical attention.
Some additional problems may be:
• Illegal workers. It is important to ensure that all staff members you hire are legally allowed to work in your area. Immigration officers do check bars and restaurants, which tend to harbor disproportionate numbers of illegal workers.
• Pickpockets and scam artists. Bars are a heavy concentration of people and many of those people are focused on their drinks or the company they are with. Pickpockets and other scam artists view these bars as a haven. They may distract the wait staff or bartender with questions while stealing. By the time a customer realizes that a crime has taken place, the thief is usually long gone. The best defense here is often a sharp-eyed staff and a security camera that can catch the perpetrator on film. In many cases, women’s purses, casually left on the back of a chair or empty seat make an ideal target. Offering a coat check or at least reminding customers to keep bags stowed can reduce the chances of robbery or theft.
• Robbery. Because of the expensive inventory of bars and the money that passes through such establishments, bars are very popular targets for burglars. Customers’ purses, tip jars, cash, alcoholic beverages, and even cigarettes are all popular targets of burglars. In some cases, ex-employees who know the bar schedule or policy surrounding money take advantage of their knowledge. You should keep as little cash as possible on your premises. After closing, remove all cash from the premises and leave the till open so that would-be thieves can see that it is empty. You may want to change your money storage system every few months so that robbers cannot find an easy target. If you are robbed during business hours, your only priority is to ensure that no staff or customers are hurt. In case of an armed robbery, hand over all money and cooperate. Try to remember as many details about the robber and contact authorities as soon as it is safe to do so.
• Assault. If your bar gets a “reputation” as a place where this sort of activity occurs, you are likely to attract a clientele you may not want. Customers and bystanders can also get hurt in a fight. Refusing to serve intoxicated customers is one way to ensure that things do not get out of hand. Having at least some staff members large enough to intervene in case of an argument is another. If a fight breaks out, it should be stopped as quickly as possible. If weapons are involved, staff should be trained to take care that they are not hurt. Police should be called in such an incident, and other patrons of the bar should be moved to a safer place until help arrives.
• Accidents. Whether it is someone falling on an icy step, cutting themselves on glass, or an employee hurting herself on the industrial blender, accidents cause distress to everyone. You can help avoid accidents — and the legal and physical pain they cause — by keeping on top of spills and potential danger areas. All steps should be clearly indicated to prevent tripping. Staff should be properly trained to deal with bar equipment and with customers who may need help.
• Zoning laws and licensing. Some of the laws surrounding alcohol are straightforward, but there are many laws concerning who can sell alcohol where and at what time and how many miles alcohol has to be from the nearest school. Not knowing about a law is no excuse, so before you open your bar, review your local food and liquor laws. There are legal consultants who can help you sort out the laws. While such an expense may seem large when there are so many other things to pay for, paying a lawyer ahead of time to understand your local laws can help prevent legal hassles down the road.
• Illness in the bar. If someone becomes ill in your bar, you need to take swift action. An ill patron is your responsibility and you should train your staff to get help immediately.
• Drugs. Alcohol does not necessarily breed drugs, but drug peddlers do often try to sell their wares in bars, cafés, and dance clubs. Being on the front page as the location of a drug crack-down is certainly not the type of press you want for your establishment. Your staff should keep an eye out for suspicious activity and report it at once. Any person who has been selling drugs in or near your bar should be reported and refused future admission to your bar.
REDUCING THE CHANCES OF LEGAL TROUBLE
The longer you own a bar, the greater the chance that you will run into legal trouble of some sort. We live in a litigious society. There are a few ways to make your bar a safer place:
• A great staff is your best defense against trouble. An observant and experienced staff can often notice crooks and other trouble before it happens. Hire well and you will save yourself plenty of problems.
• Good training. Be sure to train your staff to observe customers and to help them when necessary. Your entire staff should know what to do in an emergency. Your bar has a fire-escape plan. Determine exactly what staff should do in case of a problem and review the procedures with them regularly.
• Do not be afraid to refuse service — and do not be bullied into serving someone you should not. It is illegal to refuse service without good reason. A drunken customer may try to talk their way into another drink and then threaten to sue if refused service.
• Reduce temptation. You can reduce temptation for robbers and other would-be thieves by eliminating large amounts of money in tip jars and by keeping as little money as possible on the premises. Some bars reduce temptation even more by proudly advertising that they offer free meals to police officers with police ID. Few criminals will be tempted to rob a bar where a police officer may be dining.
• Hire security staff. Security staff can add a touch of class to your bar and can also ensure that there is always a pair of eyes devoted to keeping your bar safe. Plus, if trouble does break out, security personnel are specially trained to handle the situation.
• Keep things visible. Bright lights outside the bar and easy access to full lights in the bar can help ensure full visibility the minute something happens. Being able to see can help stop a crime.
• Keep things clear. Reduce clutter and obstacles that can help criminals get away. The fewer shadowy places there are to hide, the less activity will be going on that you are not aware of.
• Consider security systems — but do not rely on them. Items such as buzzers, security cameras, and other devices may help after a crime, but these expensive systems are rarely as effective as a sharp-eyed security staff that can stop an incident before it occurs. Criminals aware of your security system will generally find ways to thwart it.
• Lock up well and know who can get in. Each night, be sure that the bar is locked up. Change locks after employees are fired or quit and control who has keys.
• Know your customers. Knowing who patronizes your bar, what their habits are, and what type of people they are may help you spot things out of the ordinary. If your clientele changes suddenly, you will be alert that something suspicious is going on.
No matter how careful you are, legal problems can occur. Get the very best insurance you can. Legal problems and crime can cost a fortune. If you have borrowed money to establish or expand a bar, you simply may not have the money for legal or rebuilding costs, so one problem could put you out of business for good. Bars should have excellent liability insurance, which protects in case someone sues the bar for injury or harm that befell them as a result of the bar. You will also want to invest in the best injury, fire, theft, employee, and property insurance you can so that any theft or accident will not cost you your establishment. Talk to a qualified insurance agent in your area, who can let you know what insurance types are available for bars in your area. Also, talk to other bar owners to get a sense of the types of insurance they have drawn on over the years. Whatever you do, though, do not scrimp on liability insurance, which is often what will protect your business financially in case of a lawsuit.
For more information about bar service, I would recommend the following books from Atlantic Publishing (www.atlantic-pub.com):
• The Professional Bar & Beverage Manager’s Handbook: How to Open and Operate a Financially Successful Bar, Tavern, and Nightclub—With Companion CD-ROM (Item # PBB-01)
• The Professional Bartender’s Handbook: A Recipe for Every Drink Known — Including Tricks and Games to Impress Your Guests (Item # PBH-01)
• The Responsible Serving of Alcoholic Beverages: A Complete Staff Training Course for Bars, Restaurants, and Caterers—With Companion CD-ROM (Item # RSA-01)
• The Food Service Professional Guide To Controlling Liquor, Wine & Beverage Costs (Item # FS8-01)
• The Food Service Professional Guide To Bar & Beverage Operation: Ensuring Success & Maximum Profit (Item # FS11-01)
ALCOHOL AWARENESS Poster SERIES
Pictured below are all of the alcohol awareness posters from Atlantic Publishing (www.atlantic-pub.com). This striking poster series covers ten fundamental topics and should be posted in any establishment that serves alcohol. Posters are laminated to reduce wear and tear and measure 11” x 17”. Series of 10 Posters Item # AAP-PS for $89.95. You can also order each poster individually for $9.95 each: Right to Refuse Service Item # RTR-PS, One Drink Equals Item # ODE-PS, Spotting a Fake ID Item # FID-PS, Symptoms of Intoxication Item # SIO-PS, We Check IDs Item # CID-PS, Drinking & Pregnancy Item # D&P-PS, Blood Alcohol Content Chart — Female, Item # BACF-PS, Blood Alcohol Content Chart — Male Item # BACM-PS, Don’t Drink & Drive Item # DDD-PS, Alcohol Slows Reaction Times Item # ASR-PS.
