Want to increase your bar profit margins? You need the right strategy – and proper management. Bar sales naturally have higher profit margins compared to food sales and there’s little overhead.
In fact, the average beer and wine bar profit margin is 10-15%.
But there’s always room for improvement.
Follow these 9 steps to start boosting your bar revenue today.
9 Steps to Improve Your Bar Profit Margin
1. Conduct a Full Bar Audit
Before you do anything else, sit down and conduct a full bar audit. Many bar owners make the mistake of not conducting an audit, but this one simple task can increase profits by 5%-15%.
A bar audit should focus on one important thing: efficiency. Highly efficient bars have the potential to generate $600 per hour. However, there’s just one problem: this output doesn’t account for three important things:
- Waiting for a jigger
- Having to walk over to grab a specialty drink
- Waiting for strainers
Each of these actions takes time, and finding ways to eliminate them can further improve efficiency and the revenue your bar generates. Every second counts when the bar is busy.
When conducting your audit, look for physical constraints like the ones listed above and find ways to eliminate them with new equipment or a new layout. Every bar station should have the tools and equipment needed to run efficiently.
Ask your bartenders what equipment they would like to have access to. A few tools you may want to invest in are:
- Shakers
- Highballs
- co*cktail glasses
- Wine glasses
- Strainers
- Scoops
- Pour spouts
- Jiggers
Don’t forget to take ergonomics into account. After you conduct the initial audit, continue surveying your bar staff to see if there are additional changes that can improve efficiency.
2. Start Selling Premium Liquor
Want a quick and easy way to boost your bar’s revenue? Start selling premium liquor. Let’s say that customers typically spend $10 on wine. If you offered a new wine that averages $12 in sales, you just boosted your profit margins by 20%.
Because premium options come with a higher bar tab, your bar staff will be more likely to recommend these options to customers.
To boost your bar ticket averages, focus on premium liquor sales. Pay attention to trends or hot items on the market. If a celebrity launches their own brand of liquor, offer it and take advantage of the free promotion to boost sales.
3. Upsell at Every Chance
A good upselling strategy can increase sales significantly. Patrons come into your bar with the intention of ordering at least one drink. The goal is to get customers to purchase higher-priced drinks or to order more than one beverage.
Make sure that you’re training your staff and servers to upsell by:
- Offering suggestions for new items, premium options or signature drinks
- Recommending drink selections for food items
- Encouraging customers to try something new
Upselling is a simple way to boost revenue and profit margins, but your staff needs to be on board and trained to do it properly.
4. Create Specials of the Day for Slow Days of the Week
One effective way to boost sales during slow days of the week is to create specials of the day. Specials are a great way to introduce premium options and make customers aware of what you have on your shelves.
Consider offering unique:
- co*cktails
- Shooters
- Flat programs
- Premium options
- Non-alcoholic options
5. Master the Art of Social Media Promotion
Social media is an underutilized promotional tool for restaurants and bars. If you have loyal patrons, ask them to follow you on social media. You can then:
- Offer flash sales on certain drinks
- Add your bar to popular apps, such as Untappd
- Alert potential guests to specials or live performances
If you’re having a slow day, you can post about a 25% discount, increasing your profit margin bar for the day and turning a non-profitable day into one that is profitable.
6. Add in Beer or Wine Tasting
Wine tastings are a fantastic tactic that wineries often pair with cheese because it allows non-wine drinkers to try a variety of wines to see what they like. You can offer both beer and wine tastings at your bar.
Offer the opportunity to taste 5 beers or 10 drinks, but the quantity is just small enough for a taste.
7. Beer + Games = $$$
Games and beer – or any alcohol – go exceptionally well together. Why?
- Beer makes your patrons relax and feel good
- Games will keep people in the bar
- Drinks will keep being served the entire time
You can choose to have any games that you like, such as:
- Trivia
- Pool
- Bingo
- Card games
People want to have fun, and beer and games are the perfect combo.
8. Train Staff on How to Recommend Drinks for Each Meal
Does your staff know how to recommend wine or alcohol pairings for meals? If you serve food, offering the perfect pairing is a good way to upsell drinks and one that can instantly bring in more revenue while making your bar patrons happier, too.
For example, your staff may recommend:
- Gin or co*cktails with cheese platters
- Margaritas with tacos
- Red wine with red meat
- Etc.
Create a training program that all of your waitstaff must complete so that they know how to recommend the right pairings. If you don’t know the ideal pairings yourself, consider bringing in an expert to help you with the initial training and creating well-planned, written guidelines that can be followed by all current and future staff.
9. Create an Inviting Bar Space
Dank, cold, and uninviting bar spaces cause average bar revenue to fall. Spend time redecorating your bar space and make it different from the rest of your space – if you run a restaurant/bar.
A few things to consider are:
- Ambient music
- Comfortable lighting with dimmers
- Wall art
- Comfortable seating
- Space for live music, if it’s popular in your area
- Pool tables, if you have the space
- Television screens, if you prefer the sports bar feel
Once you start to focus on how to increase bar sales, you’ll find that you’ll want to focus on your bar profit margin next. Higher margins will allow you to enjoy higher cash flow and revenue over the long term.
