When done properly, bar inventory is a valuable tool that can help you improve the performance of your bar and maximize profitability. Unfortunately, many bars struggle to take advantage of the numerous benefits that are possible as a result of their liquor inventory efforts. The main reason for these struggles stems from the fundamental challenge associated with reconciling two completely different units of measurement.
Drinks at your bar are typically sold to customers in the following serving portions:
- Pints and bottles of beer
- 1.5 ounce servings of liquor
- 4-6 ounce glasses of wine
However, you receive deliveries of alcohol in much larger quantities than these single serving portions. As a result, when counting inventory, the following units of measurement are commonly used:
- Kegs of beer
- Cases of beer
- Bottles of liquor
- Bottles of wine
These fundamental differences in units of measurement create challenges when trying to devise an efficient bar inventory system.
Why Do Outdated or Ineffective Bar Inventory Systems Exacerbate this Problem?
Just about every bar owner understands the importance of establishing cost controls and processes that will guide their daily business operations. When sophisticated liquor inventory systems are used, bars achieve the actionable information necessary to more effectively run their bar.
But when an outdated inventory system is used, this turns into a task that is performed out of duty rather than because it is actually adding value to the business. In this situation, a lot of effort goes into the bar inventory process, but very little, if anything, is done with the numbers generated:
- In the worst-case scenario, nothing is done with the data generated from the inventory process, or it takes so long to calculate the data that it is no longer useful once you receive it.
- In the best-case scenario, you get an accurate liquor cost. Unfortunately, this figure doesn’t provide you with the actionable information necessary to help you improve your bar’s systems and profitability.
Either way, the results achieved by using an ineffective liquor inventory system create a negative feedback loop that breeds frustration over the pointlessness of the task. This ultimately impacts how inventory is performed. It becomes a task to be checked off a list rather than a useful management tool, causing employees to rush through the process. At this point, it is simply busy work.
How to Fix this Fundamental Problem with Your Liquor Inventory System
Using different units of measurement to quantify drink sizes and inventory supply makes it difficult to relate your back-of-house liquor inventory calculations to what is actually being sold. When you use an outdated bar inventory system, this incompatibility creates a scenario where you are only able to calculate your liquor cost. Unfortunately, this figure doesn’t help you understand how to improve the performance of your bar.
If the goal of performing bar inventory is to help you make more money, this system is clearly broken. If you want to gain valuable insight from this process, you need to use a more sophisticated bar inventory system that provides you data that compares servings sold to servings poured.
This kind of actionable data allows you to evaluate the performance of individual products sold at your bar. Ultimately, this leads to specific conversations, specific actions, and an ability to be reactive to your bar’s current performance issues.
For example, if you knew that Coors Light performed at a 95% yield last month, but only at 90% this month, you would naturally want to understand what caused this drop in performance. Perhaps your bartenders weren’t being careful when pouring this product. But this drop in performance could also potentially be caused by a problem with the temperature of your beer cooler.
Once you identify the cause of the problem, you can restore Coors Light performance to the 95% yield you are accustomed to. By measuring the performance of specific products, you are able to be reactive in this way.
What Are You Learning from Your Liquor Inventory?
Are you achieving the actionable data necessary to understand how each individual product sold at your bar is performing? If not, your liquor inventory system isn’t providing the type of valuable information that drives intelligent decision-making. Instead, your employees are simply going through the motions and performing this task for the sake of doing it.
By upgrading to a more sophisticated bar inventory system, you can use this task in a way that actually helps you run your bar more effectively.
To find out how our bar inventory system can help you streamline your processes and maximize profits, please contact Bar-i today to schedule a free consultation. We serve bars nationwide from our offices in Denver, Colorado.