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You are here: Home | Pour Cost Myths
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The Myths and Realities About Your Beverage Pour Cost
Keeping accurate control of your bars profits is affected due to the industries leading loss of revenue.... shrinkage. All bar operations that do not practice proper inventory control procedures, leave themselves vulnarable to losing a large percentage of profits to bartenders over-pouring drinks, free give-aways, cash skimming and product stealing. Bar Cop studies have found that most bars are maintaining an average 20% shrinkage, which adds up to $1000's of lost retail profits each month.
The most common mistake that bars make when calculating profits is basing numbers soley on their "cost of goods" percentage — more commonly referred to as pour costs. Traditionally, the industry has determined these percentages by adding up the cost of the product used and dividing it by the cost of the product sold.
The main problem with pour cost is deciding what to compare it against. How do you know if your percentages are in line? Most bar owners or managers simply look at the average pour cost in the industry or at their previous pour cost percentages. By using these techniques there is no-way to measure the true amount of your profit and loss.
Owners and managers need to compare their ACTUAL cost percentages to their POTENTIAL (or optimal) cost percentages. Potential cost percentages are determined by taking into account an operation's selling prices, purchasing costs, and sales mix.
When calculating a potential liquor cost percentage, the desired liquor shot size needs to be considered. When determining potential draft beer cost percentages, the sales mix of each draft beer container (mugs, glasses, pitchers) needs to be figured into the calculation.
Barcop inventory control software helps you bring your pour costs to a true value by allowing you to implement an inventory control program designed to virtually eliminate over pouring, free give-aways and theft while taking an accurate measurment of alcohol inventory using state of the art digital equipment and software.
Why "traditional control methods" will cost you profit.
Products do not have the same mark-up percentage. Your pour cost percentage on different drinks might vary between 10% and 40%.
The product mix in a bar varies every single day. This means the same products are not used in the same quantities every time, so the targeted pour cost should be adjusted regularly.
Most bars have some type of happy hour pricing and/or special prices on certain days and on certain drinks each week.
An employee taking inventory using the old point count method could result in large profit losses by easily manipulating the numbers to cover up theft.
Using inaccurate inventory techniques like "eye balling" or "point systems" for open liquor bottles will always result in incorrect pour costs and shrinkage percentages. |
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Bar Cop specializes in theft prevention products for all bars, restaurants and hotels. We carry a full line of bar inventory control software, bar & restaurant POS software, liquor and food scale, beer keg scales, point of sale systems and security camera systems. All of our bar and restaurant products are the highest quality & designed for your business.
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