Beyond the bottom line of profitability, liquor costs also reflect an operation's control systems, management skill level, and value provided to your customers on a daily basis.
Despite its importance, Bar Cop finds many restaurant and bar managers do not calculate alcohol cost correctly, or if they do, they do not fully understand the process.
If calculated correctly, the ratio can be compared to industry averages and previous performance. Alcoholic beverages are included in beverage cost calculations. Soft drinks, juices, coffees and other non-alcoholic beverage sales are included in food cost calculations. With an accurate beverage cost, steps can be taken to improve the operation and ultimately improve the bottom line. The following is a step-by-step method for calculating alcohol or beverage cost. Keeping in mind that eventually you want to compare your alcohol cost with industry averages, how you determine the numbers must be consistent with industry practices.
This system identifies what items are included in each part of the beverage cost formula. The beverage sales and costs should be generated during a set accounting time period of at least two weeks or more typically, every 28 days, or monthly. Calculating alcohol beverage cost : Time frame: Working with your managers, set up a regular time frame to analyze your beverage cost.
It is critical that the elements of the beverage cost calculation sales, inventories and purchases are representative of this time period. Alcohol sales: This is the relatively easy part - total the customer checks or reports from your POS - making sure to only include sales generated from alcohol sources. Remember to use sales only generated within the allotted time frame you have chosen.
Cost of alcohol sales: The costs associated with alcohol sales are comprised of purchases and inventory level adjustments. This lets you formulate a menu price that allows for a good profit margin. Once you know the cost and profitability of each individual thing that comes out of your kitchen you can review your menu at least once a month.
Then replace these items with ones that sell better and are more cost-effective to prepare. One of your best tools for controlling cost is inventory management.
You need to know exactly what products you have in stock and how much of each. Every dollar you have tied up in inventory is a dollar against your profits. Do a weekly inventory to determine if there are any discrepancies and irregularities in the count that can point to product loss, including employee theft.
With Glimpse, you can make this process less painful by utilizing video recognition technology. Learn how it works. For the inventory process, assign the task to one or two reliable employees at most.
When weekly inventory is complete, carefully compare sales invoices for each product against the actual count on hand. You need to avoid both overstocking and understocking to keep your costs manageable, taking into consideration product cost and shelf life. Divide your menu costs into two different sections — drinks and food. For even more insight into the financial gains and losses of items on your menu, break down categories even further than just beverages and food.
Have more categories within each, such as alcoholic drinks and non-alcoholic drinks, wine and beer, and appetizers and main meals. You count on your staff to efficiently help you with the daily operations of running a bar. This means they have access to liquor and food at all times, including before and after work.
Just as important is determining if they have the characteristics and personality your bar needs such as reliability, trust, and being a team player. You can improve your cost management and increase efficiency by using smart technology and bar software tools. However, if you price your drinks too high you might actually end up losing profit. This is where the average beverage cost percentage can help as it will allow you to price your drinks in a more standardized manner.
Just as with food, you also need portion control with drinks. However, when it comes to beverages, portion sizes are referred to as pour sizes. When you calculate your drink prices, this is done in relation to pour size. Using measuring glasses or shot glasses is an easy way to ensure all employees are giving out the same measures of liquor for drinks.
Even if you have experienced bartenders and you trust them to free pour your drinks, having a standardized system of measurement is always a good idea. Bar inventory control is integral to make sure your bar is run efficiently and that you are buying an appropriate amount of stock to supply. Buying too much alcohol for your bar will mean that you have wasted money on surplus stock, whereas not buying enough will leave customers disappointed.
This is why you need to continuously assess your stock levels. One of the best ways to keep on top of inventory control is to invest in a bar inventory app. Rapidbar can help you instantaneously update stock levels so you know what you are running low on and can directly order from your suppliers.
Talk with an inventory expert. Knowing how to accurately calculate beverage costs is extremely important to ensure you are making as much profit as possible whilst remaining competitive in the industry. You can use the formula below to calculate your beverage costs:. When calculating costs, you should establish a specific time frame to do so.
Accurate liquor cost numbers reveal inefficiencies. Your bar may have issues with over-pouring, spillage, undocumented comps, suboptimal menu pricing, and even theft there are actually many ways employees steal.
That lowers your liquor cost and dents your profit. That's why you need to know how to price a menu and factor in any shrinkage. But a lot of that depends on sales mix—the percentage of total restaurant sales that come from liquor, beer, or wine. And what brands, bottle sizes, and wholesale pricing a bar gets. Food managers will also have to work on reigning in their food cost. Average restaurant liquor cost in the hospitality industry in the U.
Most bars and restaurants think of pour cost percentage at a drink level and at a bar-wide level. Of course, there are numerous other secondary factors. If your labor costs are low, you may be understaffed and sell fewer drinks. All of the operating costs of a hospitality business ripple throughout current liquor costs. But the levers you can pull to lower liquor costs are the three primary factors listed above. Liquor cost is
0コメント