5 pitfalls to avoid when adding a bar to your restaurant

Fancy a drink? Your customers sure do! If you already run a busy restaurant you’re probably looking for new ways to expand revenue and, as such, you might be thinking of adding a bar. And why not? From a distance, a restaurant and a bar could go hand in hand. However, doing so brings on board its own set of challenges that you need to overcome and be prepared for. But if you are, there’s no reason why you can’t succeed. With that in mind, take a look at these 5 common mistakes which you don't want to make when adding a bar to your restaurant.

1. Breakdown in employee relations

As always, a healthy business starts with having a team you can rely on. As well as hiring experienced bartenders, you need to establish a successful training program that will help keep everyone on the same level and boost confidence. Just giving 1 or 2 day training periods before thrusting them in front of your customers isn’t good enough, it needs to be ongoing and teach everyone the vital techniques they need to use each day. As such, when you get time, randomly test members of your bar team to see how they’re performing. Whilst making this a fun and rewarding opportunity, provide encouraging feedback and offer them useful tips that will make their job easier to perform.

Such programmes will reinforce the bonds within your team, maintain a high attention to detail and provide ample opportunity for those that are new to working in a bar environment to hone their skills. This will also help minimise human error as well. Although being generous in your portions or giving away free drinks on occasion can give your customer services a boost, if members of your team are doing this too frequently it can cause you to burn through inventory too quickly, raising your operating costs. So in order to maintain your bottom line and strengthen morale, provide repeated training opportunities.

Thinking about adding a new bar to a restaurant? Worried about how much it’s going to cost? Apply for Business Finance or learn more about how your business could benefit.

2. Ineffective marketing

Ineffective marketing can be a killer for any business, so constantly finding new and exciting ways to entice customers in is crucial. A happy hour may not be enough when every other bar or restaurant in your area is doing exactly the same. Plus, it’s merely a period where you sell drinks at discount, reducing your takings from each customer. Marketing is about being seen and expressing why you’re different from competitors, so if you’re not doing that then you’re not doing it right. If marketing isn’t your strong point, here are 3 ways you can improve:

• Pavement signs are a cheap but effective way of getting the attention of passersby, whilst allowing you to show some flair and quirkiness. Remember, signs that assert some comedy are great ways of getting remembered and starting word-of-mouth chatter.
• Special menus and events are another great way of attracting attention and enticing customers inside. For example, showing sporting events on TV is a great way of bringing the community together and boosting sales, depending on your customer base. Meanwhile, designing special, limited-time menus can help drive the sale of food and drink by appealing to your customers’ curiosity and appetite.
• Updating your online presence is also an absolute must. Before going anywhere near your restaurant or bar, the chances are that your customer will take a look at your website first. Your website is your digital shop front which allows customers to learn more about your restaurant and bar. It’s also vital for maintaining high levels of engagement with customers, enabling you to instantly spread news and upcoming events within your local community across social media. Plus you can also get your customers involved by creating a hashtag to help promote your brand for free.

3. Poor presentation and organisation

When it comes to impressing customers, presentation is key. You want to show off your high quality, so what better way of doing so than by showcasing the wide variety of drinks that you offer? Some of the most popular bars may even have up to 120 or more different types of beverages on display, making your restaurant’s bar enticing for anyone passing by. However, there’s also a practical purpose behind this. Nothing screams amateur than having your bar team frantically searching for a particular type of beverage. By having orderly displays, your bar team will know exactly where to find everything and, therefore, complete transactions faster, earning you more each day as a result. One way in which some bars do this is by displaying beverages in order of alcohol volume:

• Try to keep your highest volume beverages in one area of your display which is both easy to see and reach. These types of beverages usually make up the majority of your sales each day and will need to be replenished regularly.
• Your mid-volume beverages should also be placed in another separate, but easy to locate, area of your display and are often bought by your customers on a weekly basis.
• Finally, you have the lowest volume beverages which you need to display in another location. These are usually your most expensive beverages that are usually purchased on special occasions, so won't need to be replenished too often. So in the meantime, they make good shelf-fillers, helping boost the appeal of your display.

4. Not paying attention to supplier costs

When purchasing fresh supplies of alcohol from suppliers you really do need to keep your eye on the ball. Like running a restaurant, maintaining a fully functioning bar is going to consume a lot of your time and attention. As such, you might be tempted to pass on keeping track of all your costs, but this would be a big mistake as even nominal price increases can start to add up, meaning over time, and without challenge, your business could be paying as much as 15% more than what it was originally. This means reduced profits and more strain upon your cash flow. Time to fight back!

Keeping a constant on your stocks can very laborious and time-consuming. But thanks to technology you don’t have to do it on your own. With a suitable EPOS (Electronic Point Of Sale) and Inventory Management System, organising your alcohol stocks needn’t be a hassle. If you can't tie it into your existing system, some of the systems that you might want to look into are: EPOS NOW, Xepos, OrderWise, Unleashed and Cin7. So if there is a price rise from your suppliers, you can go in armed with the information these systems can provide and regularly renegotiate prices. Naturally, they want to get the best possible deal for their business, but your priority needs to focus solely on your own, so you need to push hard and hold your ground.

5. Not checking your variance

Maintaining your variance is a crucial responsibility for you and your team, and relates directly to the portions that you provide to your customers. It’s about knowing the difference between the supplies that you believe you have and what you have in reality. Keeping an eye on variance can mean squeezing one more glass out of a bottle or not. As such, variance and profitability go hand in hand. Although you want to run your new bar as efficiently as possible, you need to factor in how overly generous pouring, spillages and dropped glasses can affect your bottom line. Unfortunately, in such a busy and hectic environment, accidents are bound to happen. Rather than pointing fingers at team members and giving them a hard time, figure out a way to keep accidents and excessive pours to a minimum.

Rather than stressing yourself out over beverages that tend to only get sold on special occasions, you need to work out where the majority of your attention needs to be focused - primarily, those that make up the majority of your bar’s sales. To help you achieve this, go with the 20/80 rule - identify your top 20% of beverages in your inventory because these drinks will make up around 80% of your overall sales. However, you can’t afford to ignore your other beverages either. Keep your most popular beverages safe and secure in a place where they can be seen but aren’t liable to theft, breakages or spills. Plus, teach your staff techniques on how they can negotiate their way around customers who might not be paying attention to where they’re standing.

Still thinking about adding a bar to your restaurant?

Adding a bar to your restaurant can be a smart and profitable move, providing you’re able to manage it effectively. It’s another selling point that can help lure customers back time and again, or attract another type of customer entirely. However, to go ahead with your plans, you need to ensure that you’ve got the necessary capital to back it up. It’s undoubtedly going to require a lot of potential work such as refurbishments, rewiring and redecorating, which may result in your business being temporarily closed for a time. Rather than dipping into your cash reserves, you could explore how applying for business finance may help. Thanks to the Alternative Finance industry you now more funding opportunities available to you than ever before. All you need to do is decide which product is most suitable for your goals.

At Rangewell, we have Access to Finance specialists working with over 350 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process. We’re with you every step of the way. So if you’re looking add new a bar to your restaurant and need to raise the necessary capital, apply for business finance today or find out more with Rangewell.