Inventory Archives | Sparkler City

Nightclub Inventory

Watching Your Business Expenses Closely

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In business, watching your bottom line is the most important part of being successful. Your total expenses generally tie in directly with your profit margins, and the total profits that a company sees at the end of the year can play into bonuses for management and the ability to hire more employees in subsequent years to continue expanding the business. While this sounds pretty cut and dry, most businesses have already done the basics of finding the cheapest suppliers and taken other measures to make sure they are producing product at the lowest possible price. However, there are other things to take into consideration that just may save you more money than you ever thought possible.

Employee Theft

Though you probably don’t want to think of your employees in this light, the fact of the matter is that one in three employees will steal something from their workplace at some point during their career. This can range from something really small such as a box of straws from the back room to something expensive like a case of high end vodka. Rather than suspecting all of your employees and treating them like criminals, it is easier to put in basic security checkpoints to weed out theft. Most theft is bred from opportunity, so by making it difficult to steal using a single monitored entry point and surveillance cameras throughout the business, you can discourage your employees from attempting theft and lower your business expenses.

Energy Costs

Energy expenses can be a business’ biggest enemy; especially if you operate a large venue such as a restaurant or nightclub. Nightclubs are usually filled to the brim with computer POS stations, lighting, and sound systems which all suck energy like it is going out of style. One of the best things you can do is to have all of the computers and other equipment setup to power down at a certain time unless there is human intervention. This will save you a ton of energy costs over time, yet still allow for employees to stay late to finish up any necessary work.

For restaurants, energy efficiency is the name of the game. While it may seem to be a good idea to stick with a piece of equipment that is still working fine, you may be able to offset the cost of a new piece of equipment with the energy saving alone. If you can produce more food in a shorter period time while also saving tons of money on energy, that new piece of equipment can sometimes pay for itself in just a matter of months. Make sure you crunch all the numbers and leave no stone unturned when finding ways to save on energy because it is only going to become more expensive as we move forward.

Inventory Control

Another technique that can save you money is to monitor your inventory very closely. The more accurate you are with your stock levels, the less you need to order and have sitting around on your shelves. There are many great inventory tools that allow you to determine the right amount of a given item to keep in stock so you never run out but never order too much, thus you keep as little cash tied up as possible and eliminate the risk of losing money if certain items are perishable. There are even inventory systems that allow you to monitor how much liquor you have on hand using the camera on a smartphone or tablet, so there’s really no excuse anymore. Good inventory control procedures will also factor into the employee theft problem because you will notice a discrepancy sooner than later.

Beverage Costs

The Ins and Outs of Beverage Costs

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Whether you just opened your first bar or nightclub or you’ve been in the industry for a while, you ought to know by now that beverage costs are one of the biggest expenses that you’ll need to deal with as an owner. On top of the basic expenses associated with serving the alcoholic beverages, there are many factors that come into play which make calculating your numbers extremely difficult. These factors include over-pouring of drinks, free drinks given out to gain extra tips, or even something as simple as a dropped liquor bottle.

According to a popular bar and nightclub inventory solution company, most bars see upwards of 25% of their potential profits vanish due to shrinkage. Depending on how big your market is and how many drinks your bar moves each night, this could easily be in the hundreds of thousands of dollars that are disappearing from your ledger. So how are you supposed to keep good books and make accurate profit margin projections with so many variables to consider?

The first step to controlling your beverage costs is to track your margins over long periods of time. This will help you adjust your inventory projections of your most popular spirits because it will show you a solid average rather than fluctuate from an occasional busy night. Also, you may want to consider investing in the pour tops that keep track of how much liquor passes through them. This can give you valuable insight into how much of your liquor is being given away and which bartenders are the biggest offenders.

Additionally, it is important to adjust the way that you are calculating your profit margins in accordance with how much you actually make off a given bottle of liquor. When a bottle is purchased, you can calculate the potential amount that bottle is worth based on the cost-per-ounce method. Then, you can compare that to the actual amount you collect when selling that bottle and determine how much shrinkage you have for each bottle. So, if a bottle was potentially worth $50 but you only collected $45 for the contents, you would have a shrinkage rate of 10%.

Lastly, once you know what your shrinkage rate is, you can begin to troubleshoot the problem. First make sure your pricing structure is correct so that you are actually getting the proper value for the liquor used when crafting each cocktail. Also, you can have bi-monthly training days with the staff to test their pours and train them to be more accurate. Not only will the training make the drinks better that come from the bar, but it will also make your margins more predictable.

By learning how to properly predict your shrinkage and pinpoint the problem areas, you can easily make your bar or nightclub much more profitable in a short amount of time. The key is to keep close tabs on all of these numbers and to properly train your bartenders so each drink comes out tasting and costing the same. Trust me, your guests will appreciate it and so will your bottom line.

Organized Bar

Why Bar Organization Matters

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Like everywhere else in life, keeping your bar organized is a very important part of running a successful bar or nightclub. No good can come from having a cluttered and unorganized bar that both appears and functions like it’s in a state of disarray, and that will quickly translate into a loss of sales if left untreated for a substantial period of time. Fortunately, keeping your bar organized isn’t really that difficult if you apply yourself; but finding motivation can be another thing all together. Here are four reasons why bar organization matters and how it can actually increase your profits if you do it properly.

General Appearance

Point blank, a messy work environment promotes messy work. There is nothing that drives down sales more than an unappealing environment because your customers will simply go somewhere else. Though disorganized bottles that look strewn about may not drive away customers alone, your bartenders will be more inclined to leave empty bottle and full trash bags lying around if the rest of the bar looks terrible. High expectations breeds high quality work, and that’s exactly what it takes to get ahead in the nightlife industry.

Work Speed

In addition to working cleaner, your employees will work much faster if things are properly organized behind the bar. Ideally, a bartender shouldn’t have to do much more than pivot in order to make a standard cocktail with a few exceptions if the customer requests something out of the ordinary. Not only will organizing your bar area to be efficient make the drink come out faster, the drinks will usually have a noticeable quality improvement and the bar will look fantastic as a side effect.

Inventory Control

Financially speaking, the ability to properly control your inventory is the most obvious reason to keep your bar as organized as possible. If you just put things wherever without a conscious plan of attack, you can easily misplace things or overlook them when it comes time to place an order. For instance, if you don’t put a certain brand of vodka back in the exact same place after every pour, you may order it without needing to or forget to order it because you weren’t even sure that the bottle had been discarded. Keeping all of your bottles organized by assigning them s specific location makes inventory a breeze and ensures that every bartender can find the bottle they are looking for without any hassles.

Product Placement

One of the most neglected marketing strategies in the bar and nightclub industry is product placement, and keeping thing organized is vital to achieving this goal to the fullest. Studies show that customers are more likely to buy the type of liquor that their eyes are drawn to first regardless if it is a discount brand or a premium spirit. The best thing you can do is place your premium spirits in the most visible areas behind your bar and keep the cheaper brands down along the bar rail out of sight. Many bar owners even use special lighting to highlight their premium brands to ramp up the effect even more. That way, people are more inclined to buy the premium liquors while you are still able to serve the cheaper versions upon request.

Bar Inventory

Managing Your Bar Inventory

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Managing the inventory for any type of business is about the farthest thing from fun, but it can be particularly boring if you are doing inventory for your bar. Counting the same bottle as factoring how much is left with the ones on your rail can be both tedious and time-consuming, but alas it is a necessary evil. Fortunately, there are some tips to help you get your bar inventory done a little faster as well as some important points that will help keep in focus the reasons you need to keep accurate counts. I will cover some of these topics below to keep you on track and making the most profit possible.

Lock the Storage Room

One of the easiest ways to make managing your bar’s inventory is to keep as many items locked up as possible. Your employees can only steal or misplace the bottles they can get their hands on, so keeping as many of them away from their reach as possible can make the whole process easier. Each morning (or beginning of each shift depending on how busy you are), replenish the stock at the bar with enough bottles to ensure they will get through the entire night from the locked storage room. This way, you know exactly what has left to storage room and can use its contents when you need to reorder your bottles.

Use Software

Using software to help you track your sales and inventory numbers can be very helpful in a bar setting. Fortunately, there are several companies that offer inventory software that is specially designed for bars to help them control loss and effectively make more profits. Using software can also make the counting process faster because you can see what you’re supposed to have in stock and verify the number versus doing the opposite which takes much more time.

Also, you should do pour tests to make sure your bartenders aren’t over-pouring their drinks. Some bartenders will do this to get a better tip from a customer, while others simple have bad pouring technique. Regardless of the reason they do it, every ounce of liquor that is over-poured is money out of your pockets as the bar owner.

It’s all about the Money

Besides the obvious tracking of sales and inventory to protect your investment and scheduling pour tests to make sure there isn’t waste happening throughout your bar, it is crucial that you put surveillance cameras around your business; especially on the cash drawers. Unfortunately, many bartenders will run scams where they end up pocketing much of the cash paid for drinks without ever ringing up the sale. Though nobody wants to think this about their employees, the fact remains that it happens all too often. Remember that it is your investment and they are your employees and everyone is there to make money; not rip off other members of the team.

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