Blog / December 7, 2021
5 Tips for Owning a Bar & Turning a Profit
Owning a bar is an exciting pursuit: you create a place for people to gather, work with people who become your family, entertain guests who become regulars and have the opportunity to express yourself creatively through food and beverages.
However, running or owning a bar isn’t just a lifestyle pursuit. In order for your bar to stay in business for the long haul, you need to be financially savvy and generate consistent sales. While there’s no instruction manual for how to own a bar, this article will help you run one profitably.
Whether you’re just starting a bar or having been running one for many years, with these tips you’ll be able to streamline operations and increase revenue:
- Maximize capacity with reservations
- Avoid losing customers with an interactive waitlist
- Secure revenue with prepayment for events
- Embrace online ordering
- Use guest data to drive repeat business
- Leverage self-service ordering
1. Maximize capacity with reservations when starting a bar
While most people associate restaurants with reservations, they can also be incredibly beneficial for bars.
Let’s say that guests love watching football games at your bar. If you were to let customers reserve tables to watch games, and implement time limits and spend minimums on game days, you could maximize profits during this lucrative time. If guests fail to make it to a reservation, you could offset lost profits by charging a no-show fee.
Beyond increasing profits, reservations also help you better predict how many guests you’ll serve on any given day, which can help you manage inventory, plan labor needs and maximize capacity. You can always leave several tables or bar seats open for walk-ins.
When choosing reservations software, opt for a solution like SevenRooms that charges a flat monthly fee, rather than one that charges per reservation, as the latter can make your costs unpredictable as a bar owner.
2. Avoid losing customers with an interactive waitlist
Imagine this scenario: it’s a busy Friday night and your wait time is over an hour. Walk-ins who just want to grab a beverage may put their name on the list, but may feel like their turn will never come and thus find a less busy restaurant to enjoy a tipple.
With an interactive waitlist, guests can add their names before they head over to your bar, which will cut down on their wait time. Plus, they’ll receive automated SMS updates to let them know their position in line and can check their wait in real-time in your digital waiting room. Waitlist guests can also check out your menu, follow your social media, add dining upgrades and more in the waiting room.
When guests see their progress, they’ll be less likely to give up their spot on the waitlist, which means more sales for your business.
And, if your bar turns into more of a nightclub in the evening, you can leverage promoters and guest list tools to spread the word and keep guests itching for a spot.
3. Secure revenue with prepayment for events
One of the most entertaining aspects of owning a bar is producing special events to entice guests. Create something for everyone with both free events, like trivia and open mic night, and paid events, like drag shows, Superbowl watch parties and paint-and-sip nights.
Ask guests to RSVP for free events to help you manage capacity and collect guest data. For popular paid events, secure revenue in advance by either selling non-refundable tickets or collecting reservation deposits or pre-payments for food and beverage minimums.
Green Rock Tap & Grill in Hoboken, NJ increased weekly sales by 30% by collecting a booking fee and a table minimum payment up front.
4. Embrace online ordering when owning a bar
If your bar serves food, embrace takeout and online ordering as additional revenue streams. After all, demand for delivery has doubled in the last two years, and it’s only going to become more popular.
As a bar owner, it’s your duty to innovate your business, so think beyond offering just your regular menu for pickup and delivery. Make online ordering more appealing by creating specials and limited-time menus for certain occasions and events. For example, you could sell large-format, family-style meals exclusively on game nights or for holidays.
While third-party delivery tools are a good place to start your pickup and delivery operations, as they can expose your bar to new customers, they also take as much as 40% in fees. Use a commission-free, direct online ordering platform to boost your profit margins.
5. Use guest data to drive repeat business
Twenty percent of your customers (i.e., your regulars) account for 80% of revenue in the restaurant industry. When you know your guests, you can deliver personalized service that keeps them coming back, and targeted offers they won’t be able to resist.
Implement a customer relationship management platform (CRM) to keep track of guest data – like spending habits, dietary restrictions and special dates – to provide guests customized service and recommendations.
As a bar owner, you have limited time in the day, so you need to automate as many tasks as possible. Leverage marketing automation to send guests targeted offers, such as a “we miss you” email a few weeks after a visit, or a coupon to try online ordering.
Also, send customers guest feedback surveys to understand how the experience was for them so that you can improve it.
Data is critical to keeping customers coming back.
6. How to own a bar: Leverage self-service ordering
It’s no secret that the restaurant industry is suffering from an unprecedented labor shortage. It’s been difficult for the industry to retain staff and keep up with customer demand.
To ease the pressure of the labor shortage, let guests help themselves. Designate an area of your bar, such as an outdoor space or lounge, where guests scan a QR code to pull up a menu, and order and pay for beer or liquor from their mobile devices, rather than being waited on by a server.
Not only does this help your bar reduce the burden of the labor shortage, but it can also help speed up table turnover so that you can seat more customers. Instead of guests waiting for a server to approach them, they can order as soon as they sit down – which means they can order more in less time.
And when they’re ready to close the tab, instead of waving a server over, requesting the check and waiting for the server to bring back change or process card payments, guests can close tabs on their phones.
If self-service works well in one section of your bar, you could even try implementing it throughout your entire venue, so that the only staff you hire is dedicated to creating and bringing out drinks and meals, like bartenders, food runners and bussers.
Take inspiration from Philadelphia’s Independence Beer Garden, a massive, 20,000-square foot outdoor bar and restaurant that gives guests two options for placing orders: 1) on their phones via the establishment’s mobile order and pay system, or 2) by approaching the bar. Since seating is self-assigned, the bar can minimize host staff and only needs one person standing at the entrance to check IDs.
Digital self-ordering can also save your bar hundreds to thousands of dollars on menu printing costs, since customers can view menus from their mobile devices.
The bottom line: Secrets to making owning a bar more profitable
While there are no definite rules on how to own a bar or restaurant, one thing is certain: the success of your business will rely on your ability to maximize profits.
By embracing online ordering, guest data and event prepayment, you’ll increase revenue. By implementing an interactive waitlist and reservations, you’ll reduce opportunities to lose sales. And by letting guests help themselves with mobile order and pay, you’ll be able to streamline operations.
SevenRooms’ all-in-one guest experience and retention platform enables you to do all of that and more, which makes owning a bar that much easier and more profitable. Book a demo today.
FAQs about owning a bar
1. Is owning a bar profitable?
1. Owning a bar can create possibilities for profit if done correctly. The things to keep in mind for your bar are location, size, drink and food prices and service, among many other things. However, SevenRooms makes it easy for you to automate sales, leading to increased profits.
2. What makes a bar successful?
2. The best ways to make your bar successful are:
- Make sure your bar is stocked with a variety of alcohol including beer, wine and liquor.
- Hiring the right staff (bartenders, chefs, etc.) and train them properly.
- Obtain a liquor license immediately.
- Keeping liability top-of-mind with any business decision you make.
- Investing in a point-of-sale system to help automate your sales process.
3. What do I need to start a bar?
3. The most important thing you need when starting or owning a bar is to obtain the right permits and a liquor license. Finding the right location is also crucial to making sure your bar is successful. You’ll also need the following items to start a bar:
- Alcohol, including liquor, beer and wine.
- POS and inventory management system.
- Ice buckets, blender, dishwasher and other bar equipment needed.
- Equipment for live entertainment and music.