What exactly is meant when people talk about bar inventory control or bar inventory controls? Put simply it means ensuring that bar owners are able to ensure that their valuable inventory is being used in the way that’s intended. In practical terms this simply means ensuring that drinks are made according to established procedures and also that all drinks served are correctly charged for. If you were to put it in layman terms you might say bar inventory control means a bar owner is able to ensure that employee actions don’t negatively impact their profits. However you care to define bar inventory control, profitable bars have it while lack of bar inventory control is a major contributor to bars which struggle to be really profitable.
As I’ve discussed in numerous previous articles, many bars have poor inventory control since they over-rely on liquor cost and don’t have an effective liquor inventory system implemented at their bar. The issue is that when you take liquor inventory in the typical way (using a clipboard and then calculating your liquor cost in a liquor inventory spreadsheet) you are able to see how much money you are making but you are unable to identify specific problems which are diminishing your bar profits. The problem lies in the fact that when bars calculate liquor cost, they are really calculating their average liquor cost which is the blended average of the liquor cost of all the products they sell. Since your liquor cost on Grey Goose will typically be significantly higher than your liquor cost on well vodka, if you sell more Grey Goose one week, you liquor cost on spirits will rise as a result. The problem is that while you may notice a slight rise in your liquor cost, you will never be able to identify the cause. This limitation of liquor cost applies to many other scenarios in that the lack of detail and granularity in the data limits your ability to really understand your bar’s alcohol sales. Liquor cost is too simple of a performance measure to be really useful from an operational standpoint. It’s fair to say that bars which rely on liquor cost as their primary performance measure have poor bar inventory control.
So if you’re still using liquor cost as the primary performance measure at your bar, how can you improve your bar inventory control and increase your bars profitability in the process. The simple answer is to implement an effective liquor inventory system which begs the question of what I mean by effective. An effective liquor inventory system is one which enables you identify specific problems that are diminishing your profits. As described above, if your inventory process simply results in you calculating your liquor cost, it’s not effective. A simple Google search for ‘liquor inventory systems’ will return a wealth of options on the market. As a starting point to your discovery process our article comparing the variety of liquor inventory systems on the market today is a great starting point.
If you see the sense in a system which combines the lower cost of counting your liquor inventory in house with the ease of use having an assistant each time you perform liquor inventory, check out our hybrid liquor inventory system. At Bar-i we provide liquor inventory services and software licensing opportunities from our offices in Denver, Colorado.