“Bar Control” is defined as a management program to monitor and manage physical inventory, with a goal of optimal profit margins.
A complete process includes the sum of several parts, all interdependent to be successful. This includes a POS system to track and report sales, a beverage dispensing system to track and control product used, and a reconciliation of the two, to state any variances.
A successful process is a well disciplined management practice that is consistent, maintained, and policed. Summary Reporting confirms and alerts you of variances with a database to drill down to the exact details.
The creation of a successful process is based on the global consideration of asset control, scaled to specifics of the operation in a manner consistent to each individual management style.
The expectation of a successful process is 100% of portion controlled wine or liquors, and 98% or greater for free flow products such as draft beer. It is an industry accepted standard even minimal diligence can add 15% to the profit line.
In brief I define “Bar Control” as “Keeping Your Cash”
As with any investment, Return to Investment is a critical factor. While it is an industry fact that even minimal diligence over inventory can add 10% gross profit, it is always best to confirm it for yourself as part of your diligence.
As an example I will use Draft Beer Monitoring as it offers the easiest reward. Use the downloaded worksheet below to use our Draft Beer Analyzer to audit your operation.
This worksheet determines your Slippage Ratio, defined as beer poured that failed to become revenue, then extends that to a $ value of lost profit. As the saying goes “Numbers Don’t Lie” and as this is based on your operation you can trust them to guide you to the best decision.
Do this for an inventory period, lumping all brands together to keep it simple. If you repeat this exercise for successive inventory periods, then restate over a quarter or half year you will be impressed with the findings.
Critical Detail To Confirm: This sheet uses 4 distinct portion sizes, the field involved is red. If you use fewer than 4 sizes set the value in unused sizes to zero. Confirm these values carefully as an error here compounds quickly.
True Draft Usage is how much beer was poured, paid for or not. In the blue field, enter the number of kegs on hand at Period Start. In the green field not how many kegs were received Thru Period. In the yellow field enter the number of kegs on hand for Period End.
Reported Draft Sales is what did become revenue. From your sales records enter how many of each size were sold through the period in the grey fields.
Summary Outcome line details ounces poured, ounces paid for, and ounces lost, and also your slippage rate.
To determine Added Profit enter your most common portion size and selling price. The sheet calculates $ gain when the lost beer becomes cash. Average returns are between 14% and 22%.