In the hospitality business, focus on portion control, inventory and beverage pricing to manage your numbers.

Whether you run your club beverage program at a loss, break even or make money, there are best practices that allow you to dictate the revenue stream in whatever direction YOU choose. Focus on these 3 control areas: portion, inventory and pricing, and you will be in complete control of your numbers.

Portion control can be achieved in one of two ways. If your club free pours, then your bartenders should be practicing their pours with an ExactoPour system. Practicing several times a week and testing frequently can be fun and will hone your bartender’s pouring accuracy and allows them to put on a good show at the same time. Using jiggers for liquor pouring is an excellent control method but lacks the pizzazz of free pouring. There are always ways to cheat the system, but good managerial oversight can create an accountability culture among your staff.

Proper inventory control requires two people to take the physical inventory for efficiency and integrity. If there is going to be any maleficence it will require collusion and the two-party system mitigates that opportunity. Monthly inventories allow you to put your eyes on revenue, track product sales and the cost of goods sold. If you take the inventory and your actual vs potential liquor percentage is off, one of three things has happened: 1. there is a miscount, 2. there is a formula error or 3. theft has occurred either by over pouring or bottle theft. Controlling your inventory requires making sure LBW storage areas are always locked and that keys are controlled by the management staff at all times.

The final way to control your beverage program is by having an intelligent pricing structure in place. Consider creating 5 liquor pricing tiers based on bottle costs and put every bottle into a tier. For clubs that have “member” pours, that’s fine. You don’t have to double the charge for this pour but at least consider a modest upcharge ($2) so that you get some additional revenue but more importantly you can then track it accurately. Beer and wine pricing is a bit different and not quite as formulaic. For beer pricing, set your target percentage goal and do the math backward based on projected product sales. For Wine, your revenue drivers are of course your wines by the glass, but your bottles should be priced so that the more you spend, the better the value it is for the member. Monthly product sales analysis will lead you to building the best wine list for your club.

So, at the end of the day, by controlling your portions, inventory process and pricing, you and you alone will dictate whether your club runs a beverage program that breaks even, makes money or loses money. It is in YOUR control.

Samuel D. Lindsley
Sam Lindsley specializes in Food and Beverage Consulting and Executive Search. Prior to joining KK&W, Sam was the COO of Michael Symon Restaurants (MSR), a Cleveland restaurant company with 7 distinct concepts, 18 restaurants, and annual sales over $35M. He is currently the Chairman of the Ohio Restaurant Association.