3 Common Mistakes Bar Owner's Make That Hurt Success

Two of them are things that all of us struggle with , especially business owners , and one of them is just a blind spot we need to be aware of and this comes from my own experience when I had bars issues that I faced , but also things that I see with clients and bar owners that I talked to and if we can get past these three things , we have a lot better

chance of making money . Hello and welcome to the Bar Business Podcast , where we help bar owners increase profits , attract loyal guests and simplify operations so you can avoid burnout and finally enjoy your life outside of your bar . I'm your host , chris Schneider , the Bar Business Coach .

Before we get started , a quick thank you to our sponsors Spot On , who provide a great , modern POS solution for the bar and restaurant industry , and Starfish , who use AI to turn your books into actionable steps to increase profits .

So , before I tell you what these three things are that we're going to talk about today , the three things that are standing in your way of success in the industry that I see over and over and over again with my clients , with other folks that I know that own restaurants and bars and even see some in myself back when I used to own bars .

Now these three things essentially come down to the framework that I use . So if you've been listening to the podcast for a long time , you have definitely heard me discuss the framework that I like to apply to bars but really works for any business , which is mindset , concept and culture .

So you have to maximize your mindset so that you have an ability to lead people and you're in the best spot possible to be an advocate for yourself . You have to craft your concept , so creating a structured path to profits . And then you have to cultivate your culture , and cultivating your culture is building a community around your team and guests .

So mindset , concept , culture and cultivating your culture is building a community around your team and guests .

So mindset , concept , culture and , almost universally , I see three things standing in the way of mastering your mindset crafting a culture that , or crafting a concept that's going to make you money , and cultivating a culture that is going to bring in guests and make sure you have the cream of the crop , team members . So here's what those three things are .

In mindset . The biggest problem I see , and one that we all struggle with , myself included , is ego . When it comes to your concept , where I see people struggle is education , and when I say education I don't mean formal education We'll get into that but more not having the right tools to execute on your concept .

And when it comes to culture , the big issue that I repeatedly see , and something I have definitely been guilty of when I was a bar owner is not having trust in your team . Go into them and talk about how you can work on your ego , work on trust issues and what kind of education you and your team really need to ensure that you have a successful bar .

Now , before we dive in real quick , I just want to mention this is not an easy thing to consider for most people , especially when we're talking about ego and trust .

A lot of us have preconceived notions of how the world is and how we are and unfortunately , because of that , often we don't realize or acknowledge , maybe , that we have these issues , and part of the problem with ego is your ego prevents you from realizing you have an ego With trust . Trust is difficult .

It's difficult to trust people when we work in an industry where a lot of folks will tell you all employees steal . It's just a matter of how much and how you control it and what you're willing to accept . Whether or not that's true , that's a topic for a different conversation .

But these are not easy concepts to wrestle with , and that's why I think they're the three things that are killing I shouldn't say killing but are making it difficult for a lot of people to be successful , because it's not easy and it's a struggle , and it's a struggle that you have to work through each and every day , both in your business and outside your

business , each and every day , both in your business and outside your business , in order to allow yourself to be more successful . So let's go ahead and break these down . We'll start with ego . Ego is tied to our mindset .

So ego , you know , if you think about it , it's just the feeling that I'm the best and my ideas are the best , that I have something special that other people don't . And the reason why this holds a lot of bars back is because it closes you off to other ideas and it closes you off to improving on things .

It closes you off to being able to be more successful , and there are two phrases that I hear a lot that relate directly to ego , that you can see in most people's mindsets , and this is particularly true with people that have been in the business for a long time .

The first one is I've been doing it this way for 25 years , or I've always done it this way . Okay , you've always done it that way and it worked . Maybe that'll stay true , maybe it won't . I always done it this way , okay , you've always done it that way and it worked . Maybe that'll stay true , maybe it won't .

I mean , if you think about the typewriter companies in 1980 , they said , well , we've always made typewriters this way , we'll be fine . And then laptops came along and computers and they were kind of in a lot of trouble . So doing things the way you've always done them is by no means a guarantee of success .

If the culture changes , if products changes , if technology changes around you , doing things the way you've always done them isn't going to get you a successful bar . The other thing I hear a lot of people say is if an aim broke , don't fix it , which , on one hand , I really do agree with .

Especially when we're talking about improving a bar and strengthening our business , it's really important to focus on the problems before we focus on things that are not problems . But the idea that if it ain't broke , don't fix it also is directly contradictory to the concept of continuous improvement . Continuous improvement is that we're trying to be more perfect .

In some ways we could relate it to the Constitution of the United States . Right , the United States was already existing and when we wrote the Constitution we started talking about a more perfect union , a better agreement . It was broke , we did fix it . But that whole concept of more perfect I really like , because you're never going to be perfect .

All of us and how we react in our businesses , how we do things , are far from perfect . It's not a human thing to be perfect . But if it ain't broke , don't fix it . It has nothing to do with the idea of we're trying to chase being more perfect . It's saying well , it works , well enough , let's not worry about it .

Now , for some folks and I know some bar and restaurant owners that are in their 60s , 70s , early 80s , that have owned an establishment for 20 , 30 years and , quite frankly , they're not worried about growing their business , they're not worried about making more money .

They make enough , they enjoy their life , they don't have to work that hard and that's great for them . But I'll tell you right now , those also aren't the people that are listening to this podcast .

If you're listening to this podcast , more likely than not , you want to improve your bar , you want to make it better , you want to grow , you want to develop , and so if that is what you're trying to do , if your mindset is that I want to make my bar better , that I want to make more money , that I want to increase my profits , then it ain't broke , don't

fix . It is one of the worst things you can think in your head , and that is your ego , saying I did it once and I'm always right and so therefore , the way I did it must be perfect .

And not only is that just straight egotistical and not coming from a place where you're open to making yourself better , to making your bar better , but it's exactly contradictory to the concept of continuous improvement and making your establishment better every day .

Now , one other way I want to try to explain this real quick is with consultants and coaches in the bar and restaurant space . I've had a lot of folks in this industry on the podcast , because it's always interesting to me to get other people's views .

But something between me and you that sometimes annoys me and bothers me about the industry I am in currently serving bar owners is that a lot of folks will come to you from the consultant and say I have a solution , I have a program , just do this .

Well , maybe you know , I know folks that do that and , let's be honest , their programs work for 80% of the bars , 80% of the time , and that works .

But personally , I've never had the ego to be able to say to somebody in a strategy session hey , I have this program , buy my program and we're going to do with you the same thing I've done with a bunch of other people and it's going to work . Because I don't know your individual story , I don't know your individual bar .

I don't know your individual story , I don't know your individual bar . I don't know your financial situation , I don't know your employees , I don't potentially know much about your location , the culture around you or anything like that . So what do I come with ?

I come with a toolbox and some frameworks and I say , well , here are some frameworks , here's a box of tools . We're going to take what you do and we're going to use the tools to put what you do into the framework and then we're going to work to improve it and make it better .

Because anyone that tells you you just do this program and everything will be great the majority of the time any consultant that's selling that the majority of the time it's going to work . But that also means they have an ego that's telling them , hey , you can help anybody just with this one simple program .

And frankly , I don't believe that we have to be willing in business to set our egos aside and focus on improving a little bit every day improving things that we do and improving the lives of our team and guests and our product and all of that a little bit every day and be willing to shove our ego to the side and say everything in my bar is not as good

as it could be , everything in my bar is not as good as it could be and I'm going to work to make everything a little bit better every chance I get . And I'm going to work to make everything a little bit better every chance I get and I'm going to ignore my ego in that process .

I imagine a number of you are probably a little bit angry with me right now . A because that whole bit there sounded a little preachy , but B because I called you out and that's okay . I used to have that ego , but understand , you don't have to give up all your ego .

Right , you own a business , you own a bar , you're successful , you help people , have a great experience on a regular basis , you are influential in your community .

That all comes with some ego , but what I'm saying is never let your ego get out of hand and always know how to put a check on it so that you can work to make your bar better , Make your bar more perfect . So that covers our mindset . Now the next part of the framework I use mindset , concept .

Culture is concept , and the biggest problem people make in concept is a lack of education , and I mean that for you and I mean that for your team as well .

Both you , as the owner , don't necessarily have all the information that you need to be successful , but also your team may not have all the information they need to be successful , and it's incumbent upon you , as the owner , to provide that to them . Now , one of the problems when it comes to education is most of us don't know what we don't know .

Let me say that again Most of us don't know what we don't know . Let me say that again , most of us don't know what we don't know , and many of us , myself included , have a very narrow and deep experience in certain areas .

And so within that narrow , deep experience , yes , we might know everything , because we've lived lives that have pushed us in one industry or we're doing one thing for a long time . We don't know , outside of that narrow path that we've gone on , we don't really know what's out there .

I like to learn astrophysics and things I generally watch , you know , neil deGrasse Tyson . It's terribly entertaining and it allows me to expand my knowledge on something I know I know nothing about , and the thing that I think is kind of beautiful about astrophysics is that it is so complex I know .

No matter how much I listen to people that know what they're talking about talk , I still don't know enough to actually understand it .

So when it comes to astrophysics , I absolutely know what I don't know , and the thing is , because I know what I don't know , I also know I can't just make it up , I need to learn it , and so when it comes to your barn , you know , when we're talking about education , that owners don't have in blind spots , they have where they don't know what they don't know

. The common areas where I see this is like accounting and data analysis .

So , like what I do , a lot of people talk about metrics and KPIs and numbers and improvement , but they have a very surface level understanding and oftentimes , when we're talking data analysis , the real revelations , the information that's really going to spin your business and drive it forward , is not something that's on the surface numbers , it's something deep or

oftentimes it can be a correlation of numbers , like your kitchen labor went up a little bit and your food sales went down a little bit . Neither one of those numbers the labor going up and the sales going down not drastic at all , but in combination . Now we greatly hurt our ability to make profit on food .

If we look at food as a department separate from beverage , well , maybe these little changes that on their own wouldn't make a difference , combined have made it so that we're now losing money on our food service , which means we either have to change our food service or make it

up in the beverage . When you identify your blind spots , if you say you know , I think I know this or I'm curious about this . I understand the basics here , but I want to know more . How do you go about that ?

Well , don't I mean I really shouldn't say this , because I did go to a school and study hospitality but if you're already in the industry , don't go to school Unless you have the time and the money and you just want to . Great . But in general , because I also teach some , an academic education and a practical education are not the same .

If I teach hospitality accounting at a university or a college , I'm using books that are talking about gap accounting and you know a whole bunch of stuff . That is not anything I would talk about on the podcast , even though in a lot of ways I'm frequently covering the same topics .

I may lecture to a college class and do a podcast episode that are the exact same topic , but the academic approach versus the practical approach are very different . So , education when I say education , I'm not talking necessarily formal or academic , but go , look for you know this podcast , other podcasts we've had people on that are podcasters .

Listen to their podcasts , read blogs , look at YouTube , go through online content . There are workshops . I know a lot of consultants out there that are doing paid workshop , free online workshops .

You know , if you're not , I probably should not advertise for other consultants on here just randomly , but Sean Finter , who was on the podcast April or May this spring , has some fantastic , amazing workshops that are free . You know .

Join his group on Facebook , follow him on LinkedIn and you will see those , and that's a great way to learn and get new ideas and to develop understanding your blind spots and knowing what you don't know and where you need to get more information and learn more .

Another great resource is books , and what's interesting is if you look at books written for bar restaurant owners prior to the pandemic , there were some . If you look at post-pandemic , a huge volume of information has come out and I imagine that that's because you know I mean my book came out in 2021 .

I imagine that's because a lot of us had time during the pandemic and we're bored , and so we finished the books that we had been working on and so buy the books , read the books . There are great books out there about our industry . Now , on the employee side , education is also important .

Employees , you need to make sure they have service skills and product knowledge , but you also should help them learn about life skills . We talked in a prior episode a couple months ago about unique employee benefits and one of the ones that I threw out there and this is not my idea , to be honest with you .

This is an idea I got from Sean Finter in one of his workshops is to have speakers that can teach your employees about things they don't know but should know . Come in and talk to them . That may have nothing to do with hospitality . A great example there is having a mortgage officer come in and say look , we know you're in hospitality .

This is how the mortgage process works . This is how you're going to need to prove your income . Maybe you want to start declaring more tips . All of that because that's going to help your employees be able to buy a house .

Or a financial planner come in and say , hey , you guys are getting all cash you need to save for your retirement or some options , and here's why you may want to consider having a Roth or traditional IRA and how that works and how you can make sure that you have a retirement path as an employee .

So education is really important for us as owners , to understand where those blind spots are and into filling gaps in our knowledge , and so we're not just making stuff up , but we actually know what we're doing .

But it's also incumbent upon us to provide good education for our employees , both about service and product and all the training they need , but also giving them tools and life skills that will help them be successful while they work with us and in the future . So that takes us to the last common thing .

I see that is a huge problem in our industry , which is trust . Now , trust is one of the hardest things in the bar business and there are some reasons for that . One reason is that there's a lot of theft Like let's be honest here , and something I have been known to say , and you can quote me on it , is that every employee will steal from you some .

It's just a matter of how much you allow it . Now that sounds potentially quite negative . Let me explain that a little bit real quick . When I say everybody , every employee will steal from me some . Eventually somebody's going to have a beer after work and not pay for it or not mark it down properly .

Somebody's probably going to give one of their friends a free drink here and there . Somebody's probably going to overpour for a regular here and there . Some of that is normal course of business and there's not anything wrong with it . Some of that is normal course of business and there's not anything wrong with it . Some of that is fireable .

A lot of that depends upon what your individual bar's policies are . But so often in this industry , what we talk about is stop employee theft . Stop employee theft . Stop employee theft . Why do we need to do inventory ? Stop employee theft . Why do we need to potentially have clear trash bags instead of black trash bags ? Stop employee theft .

Why do we not want anyone going to the dumpster after a certain time of night ? Stop employee theft . So we do all these things to stop employee theft , but what we often don't do is trust our employee . And when I say trust , I don't mean just trusting them with our product and our money .

I mean trusting them with their knowledge , because your employees know more about how your bar works than you do . They know more about your customers than you do . They know more about the issues in your processes than you do . They know more about problems with how your POS system is programmed than you do .

They know more about little fluctuations in the temperature of your equipment than you do . Why ? Because they work with this stuff all day and you're sitting in an office or on the floor and you're managing all of this You're not actually dealing with all of these issues .

There are tons of small issues and little problems that your employees just handle and you're not aware of . So not only do we need to trust our employees to the extent that we trust them not to steal from us obviously trust , but verify in that case but we also have to trust our employees in the fact that they're the ones actually doing the work .

They know what's working and what's not . They know where you can be better . And so , rather than always assuming and this is going back to ego , because a lot of folks let their ego get in the way of trust Rather than assuming I know everything , I am the owner , I know better than you , you're just an employee .

Listen to them , trust them , take their ideas to heart . That is how you improve continuously . That is how you find the small ideas that make things better . That is how you find a quarter of a percent here and a tenth of a percent there , and one percent here and one percent there on your cost .

It suddenly builds up to a lot of extra profit in your pocket , and it comes from trusting your employees . But with that said , I do want to reiterate this one point People will screw you . To some extent , you should assume everyone will screw you , but at the same time , if you assume everyone will screw you , you may make success harder .

So you have to be smart and protect yourself , but be open to others' ideas and thoughts . Don't just assume that what's in your head are the best ideas and the only thing that matters . So , to wrap this up , watch your ego and maintain a great mindset .

Ensure your team has the education they need to execute your concept to be successful , and that you have the education you need to be able to manage and then maintain a culture of trust . Trust your employees , rely on your employees and care about what they say .

Now , before I let you go , today we do have one listener question , and the question is this New bar owner here we've got someone interested in hosting a small private event . What is the best way to handle private events , particularly with regards to contract ? So let's back up here a little bit .

We have a small private event and in general when we talk about private events , there are two potential ways that an event happens . One is that someone's going to come in and they're going to buy out the whole bar . The other is that they're either going to have a reserve table or they're going to rent , say , a back game room .

They're going to rent the game room and have a private event in the game room where other people aren't allowed into that space . So could be a buyout , could be partial . Now , if you're doing a buyout , my rule of thumb was always I would need at least 1.5 times what I should normally get on that night in order to close . Now , why not one right ?

So if on a normal Tuesday night I'm ringing $1,500 and somebody wants to have a private event , I say , well , your minimum is $1,500 . So I'm guaranteed to at least sell what I normally sell . But I wouldn't do that . I'd say you want to buy out the bar ? On a Tuesday night I normally do $1,500 . Your minimum would be $2,250 . So why 150% ?

One simple reason , which is , if you do not have your doors open to the public , any of your regulars that try to come in now have to go somewhere else . And any time you say to people I know you normally come here on Tuesday but go somewhere else you stand the chance of losing business . Why do you stand the chance of losing business ?

Because maybe they go to the bar down the street and they have fun at the bar down the street and the next Tuesday comes around they said you know , we had really fun at this other place last week . Let's go there and check it out again . So you're potentially creating regulars for another bar .

So just getting the amount of money you would get normally on a night in my mind doesn't cut it . And so frankly , especially when we're talking about neighborhood bars , dive bars , places where people go religiously every day during happy hour to have drinks , I'm not a fan of buyouts . I'm not a fan of closing the bar .

Now , in certain markets that's easier than others . But for those of you listening that are , you know , more rural areas outs are probably bad Big cities . It's a little bit easier to get away with . Bad Big cities . It's a little bit easier to get away with . Then the question becomes whether it's a buyout or partially renting some of the space .

How do I charge for that ? And there are two schools of thoughts here . I can charge a room rental rate plus whatever you eat and drink , or I can have a minimum . And when I say minimum what I mean is yeah , you guys have the space , you just have to spend $1,000 in food and drinks and there's no room fee . I like a minimum rather than a room room .

It seems nicer to the person scheduling the event . They're not paying for a room and then paying for food and drink . They just have to spend X amount of food and drink . B if the minimum is $1,000 and they spend $600 , I just bill them another $400 . And that becomes essentially the room rental fee and it encourages them to consume more of your product .

So I am always a fan of charging a minimum and not charging a room rental fee . Now again , this is going to differ some market by market , and so it's important to understand what people in your area are doing . Personally , I always go the route of minimum , and that's true .

Even I managed a country club for a while and they had room rental fee and I literally crossed it off every contract and just had a minimum there instead , because it made folks happier and it allowed me to book more business than if I had a room rental fee . One final note on those make sure you get a contract .

What that contract looks like is up to you , but get a contract so that they're locked in , because if I'm reserving a space , if I have to buy things for an event and plan for it . I want them contractually on the hook .

But even more simply , especially when you have a minimum , get a credit card and then you can just charge the minimum to the credit card based on the contract . Anytime you're doing a contract , though , I should say this for sure Make sure you have your

attorney review it . I mean , you can go online and find examples , write something up that's yours and that will work as a contract , but always have your attorney review your contract to make sure there's nothing that you put in there that's illegal or something you missed .

That's important , and because every jurisdiction is different , when you copy a form off the internet , it may not be perfect for where you live . So always make sure you have someone with a legal background review those contracts and make sure they're enforced . That about wraps it up for today .

If you enjoyed today's insights , make sure you like , subscribe and leave a review . If you are ready to take your bar to the next level , schedule a strategy session with me by clicking the link in the show notes below . Until next time , have a great day and we will talk again later .