Tuesday, November 29, 2016

How To Sabotage Your Bar’s Business

Ever see a great bar or tavern with an ideal location and a perfect floor layout that isn’t making money. How can that be? Are not good locations and great floor layouts two of the prime factors in successful bars and taverns? Could the answer be sabotage?

All businesses should have two goals: 1) generate sales and 2) maximize profits. If bar owners aren‘t working towards those two goals they may be sabotaging their businesses. Below are the four common ways bar owners sabotage their bar’s success.

Drinking on The Job. For some reason many bar and tavern owners think its okay for them and their staffs to drink while tending bar. Think Applebee’s, Hooters, Green Mill etc. allow their managers and bartenders to drink while working? Absolutely not! Do CVS and Walgreens allow its employees to take drugs when they work? Let’s hope not.

It’s refreshing when I offer to buy a bartender a drink and hear them respond “We’re not allowed to drink on our shift … however buy me a chip and I promise I will have a drink on you tonight when I get off work”. I think that’s cool. 

Keeping Lousy Employees. For some reason bar owners retain marginal and incompetent employees far longer than most other business would. I think it’s because many are relatives; neighbors and family members of friends. We all know it’s hard to find good employees; especially people who are licensed and know how to properly mix drinks. However keeping a lack luster employees is costing you money. Find a new one and train them to be a great employee?

Tolerating Obnoxious Customers. Do banks, shoe stores and auto parts stores tolerate loud, obnoxious and foul mouth customers? Not many - if any. Most politely ask an obnoxious person to leave. Yet bar and taverns owners tolerate questionable customers and shrug it off as the cost of doing business. And that’s right it is costing them business. You bar stools should only be for good customers.

Giving Away Free Drinks. Bar and tavern owners perpetuate a myth that says giving away ‘free drinks’ helps prime the pump. Oh really? What pump is that? Dentists don’t give away free cleanings? Auto Mechanics don’t give away fee oil changes” so why do bar and tavern owners think they have to give away free drinks? 

The profit margin on drinks is small and giving away a dollar here and a dollar there adds up. 20 free cocktails and a dozen free beers is the equivalent to two six packs and almost a bottle of booze. Mechanics can afford to give away an oil change after a $600 transmission job and Dentists can afford to give away a free cleaning after a $3,000 set of braces but they don’t!

Since the New Year is about to arrive now is the perfect time to implement some new business practises to increase your sales and maximize your profits.

The first one is easy; don’t tolerate drinking on the job. Employees may not like it but this is America; they have the right to walk out whenever they want.

Second, terminate your worst employee immediately. Don’t say you don’t know who they are of course you do. It’s the one who generally arrives late and calls in sick often. Or the one who rings up the lowest sales each shift or the one with highest customer complaints. You know exactly who your worst employee is – so get rid of them and find a better one.

Third upgrade your customers. Never in public – but certainly in private - talk to your obnoxious customer’s one on one. Tell them you won’t be tolerating foul language - rudeness to other customers, or obnoxious behaviors anymore. The sooner you end or get rid of obnoxious customers the sooner you’ll have bar stools available for better customers.

Finally, begin to think of your inventory {your liquor} as cash. Before you give away any beer or booze think what you are doing? You are giving away money. Money you won’t generate when you give it away. Look at it this way, if the only reason as customer comes into your bar is to get free drinks then you don’t need that customer. Start making money.

Eba G is Profit Analyst for small bars and local tavern. Join Eba G. on face book and learn more ways to improve your sales and profits.

Sunday, November 27, 2016

The Drafted Bartender Went A.W.O.L.

Jimmy, was a bartender from a small rural town who got drafted in the US Army during WW II. 

On his first day in the Army Jimmy was issued a comb. Later that afternoon Jimmy was sent to a barber who sheared off all his hair.

On his second in the Army Jimmy was issued a toothbrush. Right after lunch Jimmy was sent to see an Army dentist who yanked out two of his teeth.

On his third day in the Army Jimmy was issued a jock strap.  The US Army hasn't seen him since 1943. 

Monday, November 7, 2016

Should Small Bars and Local Taverns Have Legends?

We live in a world based on fact - fiction and legends. Facts are things we know for sure - like gravity. Fiction we all know is not true - like Gina can throw a baseball over a mile. But Legends - aah, now these are the things that make us wonder and occasionally smile.

Ever heard the Legend of the Lone Ranger; the self-appointed law man who wore a mask and shot silver bullets? He and his Native American companion fought injustice in the old west? What about the legendary swordsman - Zorro? He single-handedly fought the Spanish government because it oppressed and over taxed the early settlers of California.

Now neither Zorro nor the Lone Ranger can be factually confirmed as there is no official documentation about them, but every school age child and all senior citizens know about their heroic exploits. So should bar and tavern owners consider having ‘Legends’? Well some do … and those are generally the bars with biggest crowds making the most money.

Whenever I walk in a new bar I love learning about the bar's history. Some bars print their histories on the back of their menus others hang a prominent plaque on the wall. I went to a bar once that claimed Al Capone stopped in once while on the run from the G-Men in Chicago. Another bar told me that when John Glenn returned from his historic space orbit he stopped in the bar to eat his first Hamburger back on earth.

Another bar proclaimed Harry Houdini, the great magician, often came in - wearing disguises to practice his new magic routines on the locals; and I even read that whenever John Wayne went back to Iowa to visit his old boyhood hometown he would always stop in this one bar and yell out loud “Boys the drinks are on me”.  Now I am not sure if any of these stories are fact but they all sounded good and each of those legends helped make those bars a ton of money.

So if your bar doesn’t have a Legend – why not create one

Imagine a bar somewhere - anywhere - called Vic’s Pump Room. Now Vic bought the bar back in the late 60’s, and then sold it to his son-in-law Walther in 1992. Walther still owns the bar but now his twin daughters, April and Agnes, operate and manage it. Vic’s sells cold beer and provides a good stiff drink in a clean, friendly atmosphere. Vic’s is in a modest neighborhood in an older section of town.  It has a gorgeous carved mahogany back bar area and 70% of the patrons are locals while 30% are strangers passing through town.

Imagine people entering and seeing this magnificent older bar. They have a few drinks, order a burger then ask ‘what’s the deal’? Well the bartender replies, Vic bought the bar in the 60’s, sold it to Walter his son in law in the 90’s and now Vic’s granddaughters - April and Agnes - run it. Boring!

What if Vic’s Pump Room had a Legend - a great legend.  Suppose it was once the site of Aldo’s Fine Jewelry Shop? Aldo, a Romanian watchmaker, immigrated to America in 1921 and quickly earned a reputation for making elegant and accurate time pieces. What if Eleanor Roosevelt heard of Aldo's and was reported to have bought two of Aldo’s watches which she gave to the Presidents of Argentina and Prime Minister of Iceland when they attended an Official White House diner?

What if Aldo’s Jewelry shop flourished until members of the notorious Simpson gang out of Wichita came to town and robbed him. As Aldo tried to defend his store he was over powered by two gang members who broke three fingers on his right hand thus ending his watch making career. Needing money to return to Romania, Aldo sold the building to the Malone brothers: Jeremiah and Jeddah - two local taxi drivers. 

As the Malone’s drove their taxis through town each day they saw a need for a conveniently located fun bar. So they converted Aldo’s old Jewelry Store into the beautiful bar you see today. They operated it successfully until Jeremiah was stabbed by Lefty Cohen for cheating during a dice game in the back room.

Fearing for their lives the Malone Brother’s fled town and Vic then bought the bar from them. Vic renamed the bar the ‘Pump Room’ because of the huge red cast iron water pump down in the basement.

Now I ask you – which sounds better? A bar with a blah-blah history? Or a bar with a fantastic legend?  When you are ready to create a legend for your bar - contact me and let's do it right.

Eba G is a bar analyst who helps bar and tavern owners increase sales and maximize profits. Isn’t it time you increase your bar or tavern’s sales and profits?  Join Eba G. on Face Book.  It’s easy just search ‘Eba Gee’ and friend me.     

Monday, May 23, 2016

Do Happy Hours Generate Profits For Your Bar and Tavern?

Does your bar offer Happy Hours? 
Are you making money or losing money?

Some bars offer Double Bubbles, some host 2 - 4 - 1 Nights still others schedule Decompression Sessions or Group Therapy Hours.  A few bold but really dumb bar owners offer Triple Cripples. It makes no difference what they are called - the question I am asking is: Do periods of reduced drink prices actually increase your bar’s sales and profitability?

Before I give my answer let me share a story. It was Easter morning and Becky’s Mom was in the kitchen preparing the Easter ham.  As usual, Mom took out a large knife and cut approximately 2 inches of meat off each side of the ham before wrapping it in tin foil and placing it in the oven.

“Momma” Becky asked “Why do you always cut 2 inches off each side of the ham?” “Well it’s an old family tradition I learned from my Momma”. When Grandma arrived around 11am Becky asked Grandma about this old family tradition.  Grandma said “Well Dear all I know is my Momma always did it so I decided to do it as well”.

When Great-grandma arrived around 2pm Becky ran over and asked “Great Grandma why did you always cut off two inches of meat off each side of the Easter Ham?” Great grandma sat down smiled and replied “Well you see Becky when your great grandfather and I first got married we didn’t have a lot of money; we couldn’t afford one of those big fancy stoves. The only way I could fit an Easter ham in our small oven was to cut two inches off on each side. 

So let’s now go back to Happy Hours.  Do Happy Hours really increase profits or are bar and tavern owners’ just ‘cutting ham’? The only person who knows for sure is the bar owner - the person who pays the bills. They know product costs and the revenues they generate.

If you own or manage a bar, an American Legion or VFW post, Eagles or Elks club do you have a Happy Hour?  Why???

I love when a bar owner tells me happy hours help them attract new customers.  Really!!  Well just how many new customers have you picked up each month - the last year because of your Happy Hours I ask?  They don’t have a clue.  It’s just their regulars coming in?

Personally, I am insulted when I have to pay $3 for a mixed drink at one time then $4 at another.  I get the same drink, in the same bar, usually served by the same bartender - generally in the same glass and yet I pay two different prices.  Why??

Money making Alternatives to Happy Hours are:  A “Featured Drink Special” and “Customer Appreciation Night” – often times called Industry Night. The featured drink special is easy. You identify a top shelf drink or beer and reduce the price only on that one item. For example you have a Corona or Sam Adams’ Night on Tuesday’s and Thursday … it would mean only Corona or Sam Adams are reduced in price from 4 to 7.  People who normally may not drink a Corona or Sam Adams may try because of the reduced priced and like it.  They may then make it their preferred drink when they come on other days and now you are making more money.  Simple - right!  

The Customer Appreciation or Industry Night is even simpler. Pick your slowest night of the week – generally a Monday or Wednesday and call it ‘Customer Appreciation night’.  Anyone who walks in you bar between 4 and 7, gets a free drink.  That’s it ‘one free drink! Since it’s a slow night and you’re already paying a bartender why not get people in on your slow night.  After their free drink they may stay and have another or two. Plus people walking past may see your bar is hopping on a slow night and be curious stop in.  They get a free drink and meet your staff – now you may have a new customer.  

All Eba G is saying - Don’t Cut Ham - because everyone is.  If Happy Hours are not making you money try something different.  Don’t lose revenue because of an old stupid tradition.

Eba G. is a small bar and local tavern profit analyst. Google Eba Gee on Face Book or link with Eba on www.linkedin.com/in/ebagee.  Isn’t it time you started increasing your sales and profits.      

Thursday, April 21, 2016

The 3M Test” for Small Bars and Local Taverns

When small bar and local tavern owners are experiencing financial troubles it’s important to cut to the chase quickly. Success with a bar is more than just pouring beers and dispensing booze. Some people are not able to accept all the demands of operating and maintaining a bar; they burn out after a few years or lose their business focus. 

Some bar and tavern owners know they should get out of the business; however for whatever reasons they stick in it and wear down the imagine of their bar or tavern to a point where it’s almost impossible for them to repair it.

Many small bar and local tavern owners spend up all their good will and create negative baggage in the communities they reside. It’s inconceivable some bar owners can ever change the way they do business. When situations like this are obvious the only recommendation I can make is “sell you bar or tavern and leave the community”. By selling your failing bar or tavern to someone new, someone with fresh ideas, someone willing to provide a valuable service to the community and someone who really wants to make money everyone wins.

The litmus test I use to determine if a bar or tavern can really make money is based on Ockham’s razor. If you are not familiar with Ockham’s razor let me briefly explain. Ockham’s razor is a term used in natural science to explain the reason(s) for taking a proposed course of action when confronted with a perplexing problem. 

Though Robert Ockham is given credit for initiating this term in the 20 Century the concept actually goes back to ancient Greece. The razor states that after all explanations for a problem are stated - always look for the simplest solution. Don’t complicate the process if you want to make money with your bar or tavern.

I call my Eba G. litmus test the 3M’s assessment. Using the 3M’s I can quickly assess why a small bar or local tavern is struggling. The 3M’s give me a starting point to decide how to precede with a corrective action plan.

The first M refers to the Management plan. Do bar or tavern owners in trouble have a written management plan or is it just in their head? For example are employee work schedules published in advance or are they written as needed? Is there a written bar clean-up up schedule with duties assigned to various staff or do owners just performed all clean up when they have time? Is there a written inventory control plan that dictates the what types and what quantities of products should be on hand or does the bar owner and staff just “wing it”?

The second M is the Marketing Plan. Other than an obligatory listing in the yellow pages does any real marketing take place? Are ads run and news releases sent to the local media outlets on a scheduled basis regarding upcoming events? Is there a plan for community sponsorships? What is the bar or tavern’s target market? Is there a “personal” Face Book and “business” page? Sometimes the question is - does the bar owner know what Face book is? Has the bar or tavern created a Linked In page, an About Me page or a Twitter account – all of which are free? What message is left on the bar or tavern’s voice mail recorder? Does the bar or tavern have an email account or is the bar owners person email account used for business? When do unique events and special celebrations occur? Are they planned out in advance or just thrown together haphazardly at the last minute? How are promotional pieces and give-a-ways purchased and distributed?

The final M is what the Money plan is. Does a bar or tavern have a written financial plan? Are operating funds budgeted and segregated? Are capital improvement accounts restricted? Are their special accounts for maintenance and petty cash? When expenses occur do they come out of the till? Out of the owner’s personal account? Or business accounts?

When I understand the 3M’s behind a small bar or local tavern I have a basis to use Ockham’s razor and can create a corrective action plan to either make the bar or tavern owner money or suggest he or she get out of the business.

Just remember if you are not making money with your small bar or local tavern – something is wrong. Either get out of the business or call Eba G. to get you on the road to profitability.