Analyzing Monthly Trends to Boost Profits: Strategies for Bar Owners

We're going to break that all down for you how you do it , why it matters and what you're going to get out of completing our weekly challenges . 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 . Every Monday , we do a short episode to give bar owners a challenge for the week One simple project that shouldn't take normally more than about an hour that can improve your bar and your profitability .

So that's the basic idea of what we're doing here a weekly challenge every Monday , and this is a new thing and the reason why I'm doing this .

There are a lot of folks out there that I talk to that need some ideas , they need some help , they need things they can do to help them work on their bar rather than in their bar and are at a loss of kind of where do I go . So , essentially every Monday , we're going to put out a challenge .

It's going to be a simple task you can do and it's going to be something that impacts your bar . It could be marketing , it could be finances , it could be just doing something nice for your staff , something every week , and the idea behind it is that it'll either improve your mindset , improve your concept or improve your culture .

So we're going to be hitting the basics of what it takes to run a good bar and , again , something simple you can do to add on to what you're already doing each week , and it's not like you have to repeat it week after week after week . The task is for one week and by completing that task , you will help yourself make your bar better .

Now , what's really cool about this is we're going to do a tie-in between the weekly challenge on the podcast and Bar Business Nation , which is the Facebook group . If you're not a member there , you really need to join . Go down , check out the show notes .

There's a link down there toward the bottom that will put you directly into Bar Business Nation when you get there , it is a Facebook group . Yes , you have to answer three annoying questions to get in . You get there ? It is a Facebook group . Yes , you have to answer three annoying questions to get in .

I believe they are what's the name of your bar and what are you looking to get out of the group ? That's basically what we're asking . Oh , and what is your position in the bar ? Are you a manager , are you an owner , are you a bartender ? That sort of stuff .

And the only reason I asked those three questions is because that weeds out well , salespeople that are just trying to sell us shit , and it weeds out bots and spam and all of that . So go to the Facebook group Bar Business Nation Again the links in the show notes If you're not already there . Answer the three questions .

We'll get you right into the group , because every Monday , to correspond with our weekly challenge , we're going to be posting a weekly challenge thread there and the whole purpose of the thread is that gives everyone in the group that's participating in the challenge .

Not everyone's going to do this every week , I know that , but however many people do , that gives everyone a place to talk about issues they're running into problems , they have things they're finding out due to the challenge , and it also gives you an opportunity to ask me questions regarding it .

So , between this episode that will come out every Monday and the Facebook group and the thread there , essentially what this comes down to is a little bit of group coaching that is absolutely free , because I want everyone that listens to this to be able to succeed . Yeah , of course , I want some of you to hire me . That's great .

That's what I do for a living , it's how I make my money , it's how I put food on the table .

But let's be honest , there are a lot of you out there that probably have smaller bars and you don't really have it in the budget to hire me , and I understand that and I wanted to find some way that I could help everyone that listens , regardless of your ability to hire a coach or a consultant . So that's what we're doing .

Like I said , this essentially comes down the weekly challenge to free group coaching for anybody that listens to the podcast , and you don't even have to join the Facebook group to do it .

Right , you can listen to the podcast , get all the information , do it on your own , other people working on the same thing , to ask me questions and really to improve the quality of your experience doing these challenges . So what's the challenge this week ? The challenge this week is P&L analysis , so we want to compare .

It's the 14th today , so everyone's end of the month P&L from September should be complete . If it's not , you're going to have to do that before you can do the challenge . If it's not , you might want to talk to your bookkeeper or whomever's doing your books and if that's , you talk to yourself about why it's not done .

Because two weeks is the longest time frame that I think is generally acceptable to get a P&L from the prior month , because if you're out four weeks , six weeks , before you see that data , you can't do anything about it . It has no meaning to you . You can't react well to it because it's so old .

Maybe what caused something in your numbers to go up or down isn't even true six weeks down the road . So you always want to look at these , your P&L , about two weeks after the end of the last month . And this is this challenge . We're doing it this month , but it's something I would recommend highly that you do every month .

So the main goal here we're not going to look at raw numbers . I don't really care what the dollar values are . What we want to look at is percentages and we want to see what's changing September , so last month compared to August the prior month , and September of this year compared to September of last year .

That's going to give us a nice , well rounded idea of what's going on . And once we've identified what's happened , then we want to get into why . Now that's going to be a little bit more complex than this challenge . This challenge is just figure out what . But I highly highly recommend , once you figure out what , also go figure out why .

So here's what I want you to do , and you can do this digitally . You can do this all from a computer screen because I assume 100% of people nowadays are using cloud-based accounting software , so you can do this online . But personally , when it comes to numbers analysis , I think it's easier to do on paper .

You get to see it , it's tactile , it makes you think a little bit more and you're less likely to miss things on paper . So , like I said , we want the September 24 P&L , the August of 2024 P&L and the September 2023 P&L , the August of 2024 P&L and the September 2023 P&L .

So go on , whatever bookkeeping system you're using A lot of you are probably on QuickBooks , so go to reports , go down . Profit and loss will be in that right under I think it's custom reports or saved reports or whatever it is . That second block there should have the P&L . It's normally second in the list and so click on that .

Now one thing I want you to do before you pull these individual P&Ls and print them out , make sure that you adjust it , your P&L and the way it's presenting to show percentages . And the reason we want those percentages there is because we don't really want to compare the numbers , we want to compare the percentages . Everything is relative .

If you sold 100 grand in August and 50 grand in September and we were just looking at raw numbers , all of them will be about 50% less than the month prior percentages food cost percentage to food cost percentage . It lets us actually establish a baseline where raw dollar values don't .

So make sure you put the percentages on your statement before you print them off . Now , once you have those three statements printed off in front of you , we're going to get rid of some of those percentages . So every COGS line you have so food cost , liquor cost , beer cost , wine costs go over that percentage and mark it out .

Just strike it out , put a cross line through . And the reason we're doing that is QuickBooks and all of your accounting software , except if you use Restaurant 365 , because that's a restaurant-based product but any other accounting software you're using QuickBooks , xero , whatever the percentages are percentage of revenue . And that's not when we're talking about food costs .

We're not talking about food costs as a percentage of overall revenue . We're talking about food cost of goods sold as a percentage of food revenue . So we want to go on that P&L , mark out all the COGS lines that you have and then do just that .

Take your food cost , divide it by your food revenue , write that down next to the food cost percentage that you just marked out . Do the same for liquor , do the same with beer , do the same with wine , do that with however many COGS you have listed on your P&L .

Now what I want you to do and this is going to sound silly , but it works really well and it helps people's brains think Take those P&Ls and start with August 24 and September 24 . Put September next to August and any percentage that has changed more than 3% highlighted on the August statement .

Then you're going to take September of 23 and September of 24 and the same thing Any percentage that's changed more than 3% highlighted on the September 23 statement . Now , why are we highlighting the other month statements rather than the current month ?

Well , because we're using it to compare to two things , and if you highlight it when you do August 24 , it's going to make it really confusing when you do September of 23 . So , highlight on the statements we're comparing to , not last month's statement .

Now , for all those things that have changed greater than 3% , our goal should be to understand why has this changed ? Now some things could be really simple . You could look at utilities from September of 23 and utilities from September of 24 and be like , oh well , utilities used to be 4% of my revenue and now it's 5% of my revenue .

Or maybe your power cost went up September . Most places were still using air conditioning . If you listened to the episode last week with Jordan talking about mention marking numbers , we talked a lot about utilities , comparing it to the prior year and power costs going . So that could be the answer and it might just be that simple .

But if you can't figure out what the answer is simply and quickly , what I would recommend that you do again , this isn't part of the challenge . The challenge is just to get those numbers and look at what changed so that you know what changed .

But the next step would be to do some root cause analysis and problem solving to figure out why those numbers actually changed .

Now if you go to that step , or if you just compare the numbers you've highlighted everything greater or less than 3% and rather than do like a formal root cause analysis and problem solving , you just kind of jot down why you think things are , that's fine .

But if you go the whole way with the root cause analysis and the problem solving , I want you to do two things then , regardless of how you did it . I want you to do two things . Once you know what's greater or what's improved more than 3% , or where your numbers have gotten worse more than 3% .

If they've gotten better more than 3% in any area , you need to figure out why . And once you know why you can capitalize on that , you can perpetuate and reproduce the increase , the positive numbers that are working for you . Now , for those things that didn't go your way , obviously we don't want to reproduce that . We don't want to perpetuate failure .

So once you know why that's particularly where the root cause analysis and problem solving come in , because you need to know how to fix that you need to know how to take your number from going in the wrong direction and turn it into the right direction . Like I said , some of these things may be actionable .

Maybe your food costs went up because of inflation as a percentage and your utilities as a percentage went up because utility prices increased . So maybe you have no control over the issues . Or maybe your labor as a percentage went up significantly because your labor isn't being managed well . Now that doesn't necessarily mean that the answer is just to cut people .

There is a whole host of issues you can get into when you haphazardly cut costs . But if you understand why , you can start to figure out . Okay , these are things I like doing , these are things I don't like doing . I'm going to do more things that work for my favor and less of the things that don't .

So hopefully you guys enjoy this weekly challenge and , like I said , there will be a thread on Bar Business Nation that goes through all this . You can ask me questions . I am here to help and support these challenges . So good luck . I hope the analysis goes well for all of you and I hope that gives you ideas that improve your business profitability .

So that's going to wrap us up for today , to get even more from our weekly challenge . As I mentioned , make sure you join Bar Business Nation Facebook group . There's a link in the show notes . I'm also going to put a link in the show notes to the episode I did on root cause analysis and problem solving .

So if you heard me say that earlier and you're going to go like hey , what the heck is this , there will be a link to the episode where I cover that in detail . We'll have that thread on Bar Business Nation so you can get there , interact , do all those fun things .

I hope to see a lot of you there and until next time , I hope you have a great day and we will talk again later .