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What to do when your profits fall short: a checklist for the wise

by Robert Plotkin

Beverage operations have to hit on all cylinders in order to crank out maximum profits. When they fall out of tune, profitability quickly takes a beating. Keeping the operation running at optimum efficiency takes knowing what to look for and making the necessary adjustments at the appropriate time.

Unfortunately when it comes beverage management, most of us are graduates of the school of hard knocks. We graduated only after making every possible mistake over and over until it dawned on us to do things differently. Don't laugh; it IS an effective way to learn.

The downside to this curriculum track is that it takes years to earn your diploma, and the tuition is unbelievably expensive. Another consideration is that good businesses needlessly suffer while you're trudging up the learning curve.

If you've looked at your day planner and decided that you don't have ten years or so to learn from your mistakes and need to know now how to turn your bar into a profitable entity, I've come up with a strategy designed to keep the learning curve short and shallow.

MONITORING PC -- Determining your bar's ongoing cost percentages, known as pour costs, reveals your level of profitability. As your cost of goods increases, gross profits diminish. Success behind the bar greatly depends on safeguarding your profit margins. No profit, no success.

Tracking your cost percentages is a fundamental form of control The more frequently you conduct an audit and determine your pour costs, the more insight you'll have into the operation. If the audit indicates a problem, you'll be able to respond quickly and appropriately.

* REDUCE SHRINKAGE -- One of the plagues of the beverage business is the scourge of shrinkage. Bartenders control both ends of every transaction at the bar. They portion and prepare product, as well as handle all sales proceeds. Compounding the peril, this all occurs before your register or P.O.S. system knows anything about the transaction. For some the temptations of handling a steady stream of cash can be irresistible. Implement solid cash controls and look to reduce your vulnerability to theft. The savings often spell the difference between financial viability and the unpleasant alternative.

* TRACK PRODUCTIVITY -- Every industry tracks employee productivity except ours. In this case, were looking to measure each bartender's productivity, or sales per hour, which is calculated by dividing the shift's gross sales by the number of hours the person worked. Uncovering a bartender with chronically low sales per hour may be a sign of a problem. On the positive side, a bartender with consistently high sales per hour deserves acknowledgement.

If a bartender's sales per hour consistently fall below the staff average, five things are possible. He may work too slowly, unable to keep up with demand. He could make lousy drinks, so people don't stick around for a second or third. His personality or attitude could be so off-putting that customers leave early, or his sales ability could be so unrefined that he consistently undersells. The last explanation is that he is likely stealing from you. There isn't a method of theft that won't hurt productivity.

* SUDS WATCH -- Industry wide, we lose roughly 20% of our draft beer due to waste, spillage and theft. That translates to losing one out of every five kegs of beer we purchase. Clamping down on the associated cost is essential.

Proper maintenance of the delivery system and staff training are fundamentally important. Operations that depend on draft beer sales to remain financially viable should also consider investing in a draft beer control system.

These microprocessor driven systems are capable of tracking every ounce of beer dispensed and detailing exact usage and providing cost percentages per brand. It's an effective way to close what has been a chronic black hole for operators.

* LOSS OF CONTROL -- Running a bar requires making a significant investment in liquid inventory, stock that can disappear at an alarming rate. Failing to implement an effective inventory control system places at risk the capital you've invested in that inventory.

To be profitable, you need to know exactly what inventory you have, what you paid for it, at what rate you use it, and exactly where it is at any point in time. Tracking inventory throughout your operation doesn't require specialized software, it's a question of accurate bookkeeping.

* WEAK LINKS -- Your business is only as strong and vital as your weakest employee. The bartending staff impacts every aspect of your operation, from portioning and marketing your bill of fare to rendering prompt and gracious hospitality to your clientele.

It is therefore critical to assemble the most professional staff you can. One of the most important steps in this process is implementing an on-going training program. What your people don't know can most certainly hurt you and reflect poorly on your business. Educating your staff is an investment, not a hardship.

* SHODDY PRODUCT -- A restaurant that doesn't routinely change its menu will always have plenty of open tables. The same holds true for the bar. Add some pizzazz to your beverage line-up. Shake up your specialty drinks. Change spices things up and helps keep your guests interested.

Likewise, bartending staffs typically operate without a clearly defined set of recipes. The result is a loss of product consistency, fluctuating costs and shoddy, hit-or-miss drinks. Determine what they're to pour, or they'll do it for you.

* SLASH MARKETING -- Some operators think marketing means only slashing prices during happy hour. Instead, promote your business from the inside out.

People are open and receptive to timely suggestions on what to drink. Develop bar menus and table tents that market your house specialties. If you've created delicious signature drinks, make sure you announce your success. You'll likely notice that sales for whatever you actively promote will skyrocket

* ALCOHOL ORIENTATION -- Increasingly, Americans are socializing without alcohol. Fortunately our stock and trade is hospitality, not alcohol. It is critically important to market to this growing segment of the population with a diverse and dynamic selection of alcohol-free beverages. They're loaded with profits and incur no third party liability.

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Click Here to Read "How to Climb the Management Ladder in the Bartending Job?"

Will You Be a Good Manager - Test Yourself

By CD Mohatta

Manager means to manage any work or an organization. To manage is not that easy. Imagine the size of some of the large organizations. Their turnover exceeds GDP of many countries. But the companies have to be managed effectively and efficiently and good managers are needed to do that.

It applies to self-run businesses. If you don't know how to manage your business, it will suffer. How to test yourself and know if you are a good manager or whether you have the qualities to become a good manager? Let us find out.

What are the qualities of a good manager? Let us summarize. To know the goal of the organization and to achieve those goals with minimum resources and maximum effectiveness is the first goal of any manager. If the primary goal of your company right now is to increase sales, irrespective of profits, you have to do that with given resources.

If the goal is to increase profits, you have to do that by cutting costs, improving sales, raising prices, and improving employee effectiveness and raise profits. The quality that is most important for a good manager is skill and knowledge. Unless a manger has skill to perform a job, nothing will work.

The second important quality is focus. A manager should be focused to the goal of the company and his/her every action should go in that direction. All such sub skills as Time management, Human resources management, Marketing, Production and purchases are part of the larger goal. Each of these has to be made more effective and efficient.

One important factor that at times overrides all others is vision. What is the vision of the manager about the organization? How does the manager look at the future and what is larger game plan? These are very important to formulate policies, which will satisfy the goals of the organization.

No organization is static. It is a dynamic mix of many forces that has to be managed to move in a single direction. The test of a manger lies in doing this. Test yourself against all these requirements and find out the strengths and weaknesses. Once you know your weaknesses, you can work upon them and improve your performance.

Try some quizzes from the Internet on Business & Career and try answering them. The tests will help you greatly in finding out more about yourself.

CD Mohatta writes for ecards and online greetings, screensavers and desktop wallpapers. The topics of his writings include love, inspiration, holidays, birthdays, nature, religion and spirituality, success etc. You can have his writings on your desktop with free screensavers.

These are video screensavers with beautiful background music. Read the messages and get inspired all day. Also try out some of the free ecards at ecarduniverse.com. You will find lovely video animated ecards in all topics like expressions, celebrations, family, friends and many more.

He writes content for Quiz and Tests on Personality, Dating, Marriage and Career

Article Source: http://EzineArticles.com/?expert=CD_Mohatta

Seven Skills of Management
By John Mehrmann

1. Planning

"Proper Planning Prevents Poor Performance". A solid plan should have measurable goals to determine progress and success. It should take into account the current situation and environment, and the plan should be both documented and communicated. Plans should be compared and aligned with a comprehensive strategy.

2. Setting Goals

Goals should be specific, time limited and measurable. Measurements include quantity, capacity, percentage, monetary, timeliness, completeness, ratings or similar items that can be quantified.

3. Making Decisions

The following are steps to making logical and informed decisions: Define the problem. Measure the problem or situation, gather as much information as necessary. Analyze the information that you have gathered, not the problem. Analyzing the information often leads to discoveries or perspectives of root cause issues that may have been previously overlooked by concentration on the results of the problem, so be sure to focus on the facts of the information.

Implement solutions that are targeted at the root cause of the problem or opportunities. Measure the outcome, compare to the original situation, and created controls to maintain the improved performance or situation.

4. Delegation

Be willing to delegate authority as well as responsibility, obligations or tasks. Delegating authority empowers individuals who are closer to the activity to respond with more informed and more timely action. You are surrounded by talented individuals, give them the chance to perform. Maintain a constant and consistent balance between Authority, Accountability and Responsibility.

5. Support

Perhaps one of the most important characteristics of leadership is the willingness and ability to provide support for your people. You can demonstrate support by being an advocate for their ideas, be compassionate and patient, contribute with your own time, and reinforce that what they do is important to the overall success of the organization.

6. Communication

Communication is not only speaking, it is listening. Use Active Listening Skills to enhance your communication, assure good comprehension and demonstrate the value of the message. When it is time to speak, be precise and clear in your communications. Explain fully to eliminate ambiguity in instructions. In meetings, keep speeches to fifteen minutes or less.

Try to keep all meetings under thirty minutes by maintaining subject focused communication and require information preparation in advance.

7. Control

If you have a plan, stick to it. Apply daily diligence according to plan, use measurements to assure progress, and keep control when the plan has been implemented.

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Words of Wisdom

"Communication is most effective when it translates a complex idea in a simple way."
- Mark Jarvis, Senior Vice President, Oracle

"If people have better information, they make better decisions - period."
- Suzanne Muchin, CEO, Civitas

"Every Leader needs to clearly explain the top three things the organization is working on. If you can't, you are not leading well."
- Jeffrey Immelt, chairman and CEO, General Electric

About the Author:

John Mehrmann is an authority on emotional intelligence, talent management and organizational development. He is a consultant, coach and trainer with Executive Blueprints Inc., an organization devoted to improving business practices and developing human capital. His materials are available from http://www.InstituteForAdvancedLeadership.com.

http://www.ExecutiveBlueprints.com provides resource materials for trainers, sample Case Studies, educational articles and references to local affiliates for consulting and executive coaching.

Article Source: http://EzineArticles.com/?expert=John_Mehrmann

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