10 Ways to Improve Your Bar's Profitability

With tight profit margins seemingly getting tighter and tighter every year, restaurant and bar owners and managers are increasingly faced with the dilemma of improving their profitability. Profitability has many aspects, including hiring the best staff, filling shifts, using the proper restaurant technology, and more. To maximize their business’s profitability, operators need to look at issues effecting all aspects of their business and find ways of improving.

This article will outline 10 ways restaurant and bar operators and boost their profits.

1. Know Your Market

How well do you know your local bar and restaurant market?

First off, it’s imperative that you know the market – locally, regionally, and nationally. Comprehension of good practices, good suppliers, industry standards and trends should be second nature to a any operator.

Ask yourself: Do you know who your main competitors are? Does the bar you manage fill a market gap or is it just another place to go? Who are your regular guests and do they match your target audience? Bar managers need to understand the competitive landscape they inhabit.

2. Attitude is Important -- Yours & Your Staffs’

Is negative attitudes in your restaurant hurting your business?

Your employees are the face of your business. If a server or bartender takes a negative approach to a guest, there’s a strong chance you’ll lose that guest forever and possibly their friends and family. That can get even worse if the guest writes up a poor review of your bar.

If you feel your staff is not doing well, ask yourself to what extent they can be trusted. Staff is bound to make mistakes, but it’s their recovery that matters. If their attitude is affecting coworkers and guests, do something about it -- now.

It’s also important to reflect on how your own attitude is affecting your business. Are you stressing your team and putting them in a negative attitude while they’re trying to work with guests? Are you not pulling your own weight because of outside-work stress is causing you to be less-than-effective? These are things you should also consider when looking at the overall attitude of your business.

3. Don’t Neglect Your Staff’s Training

Always keep your restaurant’s team training up to speed.

If you hire a great server or bartender, but they’re not trained well, your team dynamic and the personality of your venue will be comprised. Good training of all your front of house staff goes well beyond how to pour a drink. It’s getting staff certified in safe alcohol best practices, how to manage unconscious bias with guests, learning how to become better salesfolks. Cross-training your staff across disciplines is also great for your team’s progression as well as when you’re short on staff.

Part of the process is finding job candidates and training them. Competition for great staff is on the rise, so bars need to make more of an effort today. There is a lack of balance between demand from bars and supply of quality staff. The people you hire have the greatest influence on the bar’s overall culture, so make sure you get it right the first time. And, once you’ve built an amazing staff, make sure they don’t want to jump ship for a competitor later on by creating a great work environment.

4. Promote a Comfortable Atmosphere 

How is your restaurant’s work environment?

Another important aspect of improving bar profitability is making sure that you're promoting a comfortable atmosphere where your employees and guests feel welcome to voice their concerns or share their ideas.

To help your employees, make sure guests see the food menu well. Patrons might approach your bar doors with the idea of having a drink, but the food menu right in front of them might start to look appealing after a few drinks. Employees can also boost sales by offering food and drink combos based on contrasting or similar flavors.

Talk to your employees about good food and drink combos, like which beers pair well with your appetizers. Also ask them what their pain-points are in their job and find ways of alleviating them (if you can). It’s always nice to offer knowledgeable suggestions. Your servers should learn to detect undecided customers. 

5. Use the Right Restaurant Technology

Use the right bar POS system.

A bar POS system is aimed at helping bar staff and managers oversee services, so a standard retail POS system wouldn’t be enough for your bar. Tab management, substitutions, price scheduling, and split inventory for liquor pours are just some of the features to look for in a POS software for your restaurant. In terms of sales management, all bar POS systems have the same exact functions as any POS system.

A bar owner or manager can manage inventory and purchasing, take orders, process payments, review business analytics, and track sales. However, a decent bar POS system goes above and beyond all this. It offers beverage service and bar-specific features, such as being able to run tabs, transfer tabs and split checks, make drink recipe lists with ingredients, order entry that allows drink customization, split liquor inventory products and track pours, schedule prices for happy hour and other specials, track tips and end-of-day payouts, and provide a multi-user environment with staff tracking.

Having these features at your disposal makes every aspect of your facility and services run smoother. You can improve serve drinks faster, inventory tracking, allow patrons to pay however they wish, and track every aspect of your business in one streamlined system.

6. Develop Positive Relationships with Staff

Restaurant managers need to bond with their employees.

Experienced bar managers know that without good HR management, success just isn’t possible. To establish an open and positive rapport, try to develop a positive relationship with them. A frustrated employee affects morale, performance, and (worst of all) guest experience. The notion of “business isn’t personal” is changing. Bar managers who build relationships with their staff create a personalized connection with a person who will become a reliable, long-term employee and bring people to your bar as well as keep loyal clients coming back. 

7. Shop Around

Restaurants should shop around with different vendors for the best deals.

We already mentioned getting a bar POS system. There are many options out there. Systems like Toast and TouchBistro are designed specifically for food and beverage service businesses. Others, like Square, Lightspeed, and ShopKeep, are customized versions of popular general POS systems.

It is crucial to take the time to list the features you need for your bar now and in the future. Push vendors to get them to show you (not just tell) that their product fits every single one of your needs.

This also goes the same for your food vendors. Shop around and see what each has to offer. Muscle them a little to get the best possible deals so you can maximize your profits.

8. Read the Fine Print

Know what you’re buying in restaurant POS systems.

A POS system and software can make or break your operation. For every software vendor pushing a program, there are many hidden fees and misleading statements. It might seem like all programs have the same characteristics. Then, the price could be your only consideration. However, it shouldn’t be. There is a big difference from one bar POS system to the next.

A solid POS system must include all the apps, software and hardware needed to record and process sales and print receipts, such as cash drawers, computers, and printers. This combination of software and hardware can be hard to operate with, especially if you have a small bar, because owners tend to assume the system will work with any old computer or printer. Always make sure you’ve read the contract in full and ask questions.

9. Offer Menu Specials & LTOs

Create restaurant specials and seasonal favorites.

Do you have a unique special that brings everyone round come happy hour? No? It’s time to get one. This is a product your bar will become known for and start attracting clientele. Being known for a signature dish is a great way to get local guests and visitors to come to your location and experience what you’re known for.

Also don’t be afraid of creating rotating menus for varying seasons, or creating limited-time offer menu items. This will create a sense of urgency and increased value of your restaurant as items that you offer aren’t available whenever guests want it. This is, of course, a balance with having reliable menu items, so make sure you have your staples available year-round – especially your signature dish.

10. Turnover vs. Quality

How should you price your restaurant’s menu?

You have to choose one over the other. Low prices and lots of guests or high prices and high quality for that lucky select few. Your profits can increase either way as long as you do your math right.  

This comes down to knowing who your real guests are and what they can afford mixed with what your restaurant’s theme is and what you want to be. Being a dive bar but selling drinks and food at a fine-dining establishment is a recipe for disaster. Meanwhile, you don’t want to undervalue and undersell your food. While keeping your prices low will be enticing to guests, how much is it affecting your bottom line?

Research your market, do a little math, and see what makes the most sense for your restaurant.