Maximizing Bar Revenue for Bar Owners: Boost Cash Flow & Customer Experience

We've done a lot of episodes that were actually two-parted , but this week what we're going to do is we're going to cover a lot of smaller topics quickly and , to be honest with you , I took some time off from the podcast over July and what we're going to do is talk about some of the observations I've made going out to different restaurants and bars and places

in July , and one of the wonderful things is I had an opportunity to travel a little bit , got to see some people and I got a bunch of new restaurants , bars , establishments that I had not been to in the past , and I noticed some things that are important .

Some of these are counterintuitive , but all of them can help give you some ideas , some maybe different perspectives on ways of doing things .

So let's go ahead and jump into it and we'll cover eight topics of things that I've noticed over the course of July , going out to restaurants and bars that I think are useful for all of you and things to consider for your own establishments . Now , the first one is a lot of times I will talk about , every bar should have a cohesive concept .

From your website to your tables , to your dining , to your service , to your drinks and your cocktail selection , everything should be cohesive . People need to understand your bar . It needs to be something they can relate to . It needs to make sense to them and I will say that is true .

That is absolutely true 98% of the time , but I had the chance to go and dine at a restaurant . It's actually kind of local to me . I'm starting to eat there quite a bit . That defies the cohesive concept . It is a place where the atmosphere does not match the food and the service does not match the food or the atmosphere in some ways .

Let me break that down a little bit . It is a steakhouse in a small town that has a very . It's a 1970s decor , it's 1970s chairs . It's a 1970s bar , so it's not like what you would expect from a high-end steakhouse and the food is absolutely high-end steakhouse . The service is somewhere in between the two .

It's not your neighborhood bar , which is more or less what it looks like , and it's not fine dining . It's somewhere in the middle . It's very educated people that know what they're talking about , that know their product but at the same time they're way more casual and relaxed and way more neighborhood bar-like .

So you have high-end food in a neighborhood bar-like setting , if you will , with folks that are much more knowledgeable on the food end and on the high-end beverage end than you would run into in most neighborhood bars , but still have that collegial kind of loose relationship with their customers . And so , thinking on that , those things should not exist .

We're actually spanning from what I would say is the low-end or more casual end of the bar market , if you will , to the high-end or fancier side of the food market . It's all in one establishment and it doesn't fit . I will tell you this . You could go there , you could eat , and it would confuse the crap out of you on why that place works , but it does .

So , while 98% of the time , I absolutely will stand by my thought that you need to have an absolutely cohesive experience , and while I think this place could potentially be more cohesive , it might make more sense to other people if it was the combination of killer food , great drinks and great service , even though the service doesn't quite match the level of food

and the atmosphere doesn't match the level of food or the service . It works because it's a place you want to go . Now , part of the reason that works , part of the reason why we can have an incoherent concept in this location and it actually works .

Where it doesn't quite work in your head , it feels a little off when you're eating there , but you have a great time . Part of that reason is it's a small town . There's not much competition on the high end of the food market . But the reason why I bring this up I know many of you listening to me are in large cities .

I know many of you are in competitive markets , but I also know some of you are in small towns , rural areas and , quite frankly , the cohesive concept that I talk about , where you need everything to make sense and everything needs to be not perfect but it needs to tie together very well , is more important in a larger metropolitan area than a small town

environment , because in a small town environment the whole vibe of everyone is different , the whole feel of everyone is different , and that allows you to come up with a slightly different concept , one that in a large city may not work but then in a small town plays , and plays exceptionally well .

But if you work the right food and the right drinks and the right service together in a cool environment that people may not understand that may not make sense when you're sitting there eating but leaves your customer happy and content , you can still do it and the best part about that is that means you may be able to cut a little bit of money on build out

glassware , things like that . Obviously , again , it'll work a lot better in a small town than a big city , but it is something to consider . You can be your own thing and your thing can be , in a way , cohesive without being cohesive in the way that everyone else sees it .

Second thing I noticed in July going out and eating at different restaurants and I'm sure a lot of you are this way , because most of you that are listening to this podcast you working around bars . I work in around bars . I tend to eat later than most people . A lot of people , especially in middle America .

They're going to dinner at 6 , 7 , 7.30 isa later dinner . I personally like to have dinner at 8.30 and 9 o'clock and so if I'm on vacation , I'm going out for dinner at 9 o'clock and it's after that rush , after that big push through the restaurant . There are always issues .

I can go to the same restaurant at 7.30 when they are in the weeds balls to the wall , everything is going crazy . And I'll get better service than at 9.30 when there are three or four tables ordering food .

And the reason for that , if you really think about it , if you think about the psychology behind slower restaurants , slower bars meaning slower service , worse delivery of your product it all comes down to the fact that when people are in the weeds they're focused , they're firing on all cylinders , they are working as hard as they can to get food out , to get it

right in , to get through the rut , but it's slow . People relax , they get lazy , they go outside , they have a cigarette , they might have a drinker . Talk to their , not an alcoholic drink , but sit in the back and drink a cup . Talk to the friends that they're working with , engage with management , start doing side work , things like that .

And when we get slow we get sloppy . And unfortunately , if you think about that , when we get slow we get sloppy . If you have somebody come into your bar at 9 o'clock to get dinner chances or they might work in the industry . So you're giving bad service , potentially , to people that are really good tippers potentially , and that's just not smart , right ?

That's another good way to make money . So you need to make sure that you're training your staff not to let up . Don't treat slow periods as slow periods . Everything has to fire the same , whether you are balls the wall in the weeds or it is slow inside your bar .

The third thing I noticed in my adventures in July was that a lot of places are not keeping up on their physical plan and I think it's a combination of inflation and other things going on currently . We all know money is tight .

It's difficult to squeeze the same amount of money out of your guests on a percentage basis that you could before , because all your costs are up and a lot of places guests don't want to pay that extra amount that we should be charging , and a lot of folks , frankly in the bar business were reluctant to raise prices because we have all those old regulars that

really really are cost conscious and are going to complain to us when we raise our prices . But the thing is the number of restaurants I saw with shipping paint or with clearly front doors that don't work , just clear issues that anybody can see walking in the door , really surprised me and it's not something that you really should have .

Because when you have that physical plant issues , when you have that AC , that doesn't work , when you have that door that doesn't quite shut , people notice and it gives them a bad impression of your bar as a whole . One bar I was in while I was out the last couple weeks literally had no AC and they didn't really acknowledge that they had AC .

They didn't really say anything about it but it was about 85 degrees in the bar . Hey , 85 degrees in the bar . I'm not staying , I'm having one drink and I'm going to the next place , but B I'm not as likely to go back to that bar because I think I'm just going to sweat and probably have warm beer .

So you have to keep your physical plants up because if you screw up that guest experience one time , if you leave that guest with the impression that you don't care about your physical establishment , they're going to assume you don't care about your drinks .

They're going to assume you don't care about your food , they're going to assume you don't care about your employees and that's absolutely not what we want to do so you have to make sure you maintain your physical plant , and I know money is tight , I know people are feeling a pinch and that there's probably a recession on the horizon .

You've got to keep up your physical plant .

Another thing I know is going around People are seeming more and more like cash is a bad thing , and I noticed this not so much from bartenders , but I noticed this a lot like coffee shops , bakeries , little food establishments and I think in the bar business we're in actually a really nice spot because we have patrons that tend to use more cash .

But as we move away from cash , this movement towards a cashless society is coming . We have to readjust the way we look at it , because cash has the amazing ability to always be worth the same amount of money .

If I come into your bar and I spend $50 and I tip the bartender let's just say , 10 bucks in cash , I'll just give him 20% that bartender now has $10 . She goes down the street to the local coffee shop the next day before he comes into work . He buys a drink for eight bucks or whatever he tips him to . He gives them that $10 .

That coffee shop and those baristas combined have that $10 . They go out the baristas after work , come into the bar and spend money . Well , they had $2 that they got from the bartender that morning . They tip that $2 back to the bartender . The bartender has $2 .

But as we put everything on credit cards , especially when you start talking about Venmoing people and a cash shopping people , all these things generally come with transaction fees and those transaction fees actually diminish the amount of money in your local market . So we need to focus more on cash .

Cash is the way to transfer money from person to person and not incur a fee .

Now , obviously , you can do things like charge a I'm sorry you can't charge an extra credit card , but you can get a discount for cash payers or you can just make sure you always have cash around , take cash from people , because cash , again , is always worth the same amount of money .

There's no transaction fees with cash and it just pains me to think as we move away from cash especially in the bar business , which is largely linked cash forever , we are increasing the amount of fees we pay , we're increasing the cost that we have and that money , rather than staying in our local market , is going to some execs or some credit card processing

company somewhere else . So cash is good and I feel like as bar owners , bartenders , small business owners , it's incumbent upon us to use cash when we transact with other small businesses Along those lines .

Put an ATM machine in your bar . Hey , go buy it . You can charge money for it . It's a whole new revenue center for you that will actually make some good money .

And B if someone pulls cash out of an ATM in a bar whether it's to play some games , get some change for pool to buy , pull tabs or play Kino or something cash in a bar pull that out of an ATM tends to stay in that bar . So if you want more cash floating around your bar , have an ATM machine , make extra money on the ATM machine .

You get more cash , you pay less transaction fees . Another thing I noticed going around I went to a lot of kind of more touristy areas where we had restaurants Again , not necessarily a bar thing here , but it's restaurants with waitlists . And even in some tourist areas bars will have waitlists for tables .

And one thing I always notice when I go to a place with a waitlist is they say hey , it's a 20-minute wait , why don't you just go sit over there outside on the bench . That's really boring when you're on big days and the thing is if you go to a chain restaurant . A lot of chain restaurants will be like hey , we can text you when your table's ready .

Now let's take that a step further . Let's say you have a bar in a busy tourist location , whether that's New Orleans or Florida or what have you . If you have a situation where you have waitlists for tables , use the texting , shoot them a text five , ten minutes before the table should be ready for them to come back . They come back .

They get 15 minutes from when they get that text . Let's say to check back in with you , not you just move that table to the next person . But the thing is , if you send them a text now , they can go to the store next door . Now they can go for a little walk down the street . It allows people to better enjoy their vacation .

If they're not spending their vacation time sitting on a bench in front of your store waiting for a table , they're having a better vacation . In turn , they will choose to eat with you more .

Because if I have two establishments side by side and one of them will text me and they have a 20-minute wait , and one of them won't text me and they have a 20-minute wait , guess what ? I choose the one that's going to text me Because I know I can go look at something while I'm waiting . Sixth thing I notice is .

There are a lot of establishments nowadays , and part of this I should back up a little bit here and tell you a little bit about myself . When I was looking at my parents' own restaurant , it was fine dining , and so I grew up around 1990s fine dining , which it was largely about the show . Right , dinner was a show .

And one of the things that got drilled into me very young was that a good waiter or waitress guides the guest experience . The guests don't order what they want , they order what the hell the server tells them to order .

But the server has to do that in a way that's suggestive , that does not push the guest in a certain direction but that ensures that the guest has a wonderful experience . And especially in bars we've gotten a point where we're too much order takers . We go up to people , we say , hey , what do you want ?

We go and that , but we're not putting on the show , we're not guiding that experience . And when you guide that experience , especially in a tourist location , especially if you have people coming in from out of town , you amplify their experience five , ten times Beyond that .

When I'm saying , remember the show , make sure you're shaking cocktails above your shoulders , smiling at guests , looking at them . All those hokey things that you hear on TV on bar rescue or something about how to bartend and look fancy Actually do those , because that's again going to elevate your guest experience .

It's all about the show , it's all about the experience . And this actually comes backwards somewhat to our cohesive concept . You normally need a cohesive concept . Everything needs to fit in Well that show , that experience , the entertainment that your guests get while they're choosing to have a drink or dine with you . That needs to be cohesive to your concept .

And also a show . It needs to entertain them and draw them in . It needs to make them want to come back .

7th thing I noticed over going to a bunch of bars and restaurants and traveling a bit in July , everyone now has tipped percentages on receipts Almost everybody and what I noticed is there's a large range of these and I know tipping has become quite the controversial topic and I will tell you right now I am not one of these people that believes that tipping should

go away . I don't believe in automatic service charges , even though I know in especially the East Coast and California , this is becoming normal to put service charges on receipts automatically . I don't think that's how bars should operate , especially in the middle of the country . I think that's just piss of debt .

But everyone is putting tipped percentages on receipts , recommended tips , and what you always used to see was you know , sometimes you'd see 15 , 20 , 25 . Frequently you would see 18 , 20 , 25 . I noticed a lot of places now are 20 , 25 , 30 , 18 , 22 , 25 . You know they're kind of edging those numbers up . Now a few things are true .

One thing is true that from a psychological perspective , people generally will not pick whatever that lowest price is . They'll go to the middle price because that's where people tend to be the most comfortable .

It's the same way that if you have a wine list that is organized by price , people will never buy your most expensive bottle , will never buy your cheapest bottle . They'll always go in the middle , generally bottom half of the middle .

And I am sure some of you are about to disagree with what I'm about to say , but that's the great part about having a podcast . This is just my opinion . When we look at tip percentages on receipts , I think when we start going 20 , 25 , 30 , things like that , that's a bit excessive . Yes , it may overall cause you to get higher average tips for your staff .

However good bar staff should be pulling over 20% every shift , no problem already . So if you have it in 18 , 20 , 25 , that's going to seem a lot more approachable to folks and not greedy .

Because what worries me when you start seeing these higher numbers on the receipts , these higher percentages , is that your guests will perceive you as being a bit greedy , as pushing a little too hard for your staff to get too much , and in a lot of cases nowadays that becomes interpreted as I pay my staff shit and therefore I want you to tip more to subsidize

their wages . And fundamentally I mean that's what tips really are right . Tips are employee income that comes from the guests and not the establishment . But tipping culture is ingrained in our society . Tipping culture , as much as some folks may want to go away , is probably not going away anytime soon .

Maybe in some coastal cities , maybe in some specific areas , we'll see the shift to the standard service charges and paying folks more and all of that . But in the middle of the country it's I mean minimum wage in most places for tip employees is still 213 . So if minimum wage is 213 , I sure hope folks are going to tip .

But at any rate , to get back to this percentage thing . You don't want to seem greedy , you don't want to have your customers perceive that you're just trying to have them subsidize your wages . So I think I really do that . The 18 , 20 , 25 is really safe and good , because guess what Folks that are good tippers .

If I go out and have a couple of drinks and I see that 20% , so as I should tip $4 , hey , I'm never going to tip for a box because I can leave a five . But I'm probably going to tip even more than that because I know the effort , I know the work . Your folks that want to tip higher will tip higher .

Your folks that don't want to tip higher will just be offended and that's why this move towards these higher percentages on receipts probably is not a good move . That probably someone should say that you could get a lot of empirical evidence from different people to confirm that .

But gut instinct , talking to other people around , that does not seem like the best move in the world . Eighth thing I noticed . Final thing I noticed over the course of the month , traveling around and visiting more restaurants and bars than I normally do , not enough people are selling merch .

If you have a bar , especially if you're in a tourist location , you need to sell t-shirts , hats , hoodies . You need to sell stuff . People want to remember where they were and everyone on vacation in America pretty much will buy a t-shirt . Most other countries will buy t-shirts too . So why would you not give the folks that opportunity ?

Oh , you really like this bar . You've been hanging out here while you've been on vacation here . Buy our t-shirt . It's an easy upsell . Now the problem with merch most places you go , the merch is not great . There are limited options , there are limited sizes , there are limited colors All that is true . I've talked about it before . I will talk about it again .

Think about going online with some of your merch . Think about going print on demand with some of your merch . Think about integrating some of your merch into your website . If you don't know how to do that or you have questions on it , reach out to me . Chris , at barbusinesscoachcom .

I am more than happy to teach you something from trying to do that because I really think it is a key way for most bar owners to be able to increase their bottom line without actually doing much , without having a bunch of inventory on hand , because if you go online with your merch , you can start having five of an item in store instead of buying a hundred

of them at once and then print on demand . If you don't have the size somebody wants , if you don't have the color they want , they can go online and buy it boom , it's at their house . Now , the only way to make that work because we all know merch is an impulse bot you have to have QR codes so you can talk to them about the merch .

Oh , we don't have this here . Scan this on your phone here . Click here Apple Pay , click , click , boom done . Or , if you want , just add it to their bill , ask them their address and order it for them . Either way works , but consider selling merch , because merch will always be something that people want and it is something that will not go bad .

It's not eggs , it's not milk , it's not chicken . It doesn't rot . If you have a t-shirt on a shelf for a year , it's still good . So it's an easy way to increase your ticket , and it's an easy way , especially if you're located in a tourist location , to be able to really maximize the amount of revenue you are making on each and every guest .

So again this week just wanted to talk through these eight observations I've had over the last month while I've been on a hiatus from the podcast , kind of traveling around and trying a bunch of new places , going off-duty trips . So consider those for you see what of that resonates with you .

It's quite possible out of those eight only one or two are going to work for your bar . But if you can make some small changes , make some small improvements . Remember those small improvements always compound . Continuous improvement is how you make the big revenue at the end of the day .

Little side note if you have not had a chance , go check out my book how to Make Top Shell Profits in the Bar Business . It is on Amazon . It is available in hardcover , paperback , audiobook or Kindle . So check that out , read it . There's a lot of really good information in there . It is quite comprehensive on information in the bars .

It is just a really good overview of pretty much anything in the bar business that it was face .

Also , if you have not a chance , go ahead over to Facebook , join Bar Business Nation . That's also kind of been on his friend month , because travel is not necessarily conducive to Facebook all the time , regardless of what the influencers tell you . But head over to the Bar Business Nation Facebook group . Join there .

We're trying to build an awesome community of bar owners to all help and support each other . And with that guys , I hope you have a wonderful week . I will talk to you again next week . Have a great one .