Making bar work is much more difficult than it seems at first glance. Also, you have to consider that not all people are worth a bar. That is why today I am going to tell you about quiz questions and answer at bar and also about 4 mistakes that I discovered working with different hotel establishments so that you can make a bar profitable without dying in the attempt.
4 mistakes you shouldn’t make if you want to know how to get a bar right
Then you will find things you should never do if you set up a bar and therefore, they serve as the basis for opening a profitable bar.
Set your prices badly.
This error is from the book. And it seems a bit of a truce, but it isn’t. Most establishments set the prices of their products based on competition, and what they consider appropriate, regardless of their own cost structure. Above all its fixed costs,
This can cause that in certain products you sell below its cost price. And you know what this means? That with every product you sell you lose money. You head to ruin. You have to learn to put prices on your products
Pay no attention to your fixed costs.
A very important part of hospitality entrepreneurs only pays attention to variable costs. How much does Coke cost me, how much does a barrel of beer cost me? They do not pay attention to fixed costs when these are the line that establishes the separation between losing and earning money.
Fixed costs are those that do not depend on the volume of sales. Regardless of what you sell, fixed costs remain unchanged. The fewer fixed costs you have, the lower the barrier you have to overcome each month to reach your break-even point. Take it to the limit: If you don’t have fixed costs and you have set your price policy well, you earn money from the first sale.
This is the idea, reduce the number of sales you need to start earning money, and this is achieved by reducing your fixed costs.
Opening a bar has high costs: you have to adapt to the premises, you have to buy machinery, and you have to have stocks in the warehouse. Many entrepreneurs embark on the adventure, financing these investments, which is very risky because you are adding two costs that will subtract euros from your cash:
- The return of capital.
- Interest payment.
These two costs are added to your fixed costs. Making them bigger. And what happens when you have very large fixed costs? You already know: that you need to sell more units to start earning money. And you look for the exact opposite.
There are many hospitality entrepreneurs who think that you have to have everything, all beers, all formats, all sodas. This causes that on many occasions they have immobilized in their warehouse a very important capital.
And yes, I say immobilized, because they are assets that do not move, that do not produce. And an asset that does not produce is an anchor for the growth of a company.
Profitability is equal to the product of the margin for the rotation. The more margin you have: the more profitability. The more you rotate a product: the more profitability.