Running a Bar For Dummies Cheat Sheet

If you’re interested in running a bar, you have to get to know your alcohol control board so you know what you can and can’t do when it comes to serving alcoholic beverages. Keep this list of questions on hand so you’ll know the important things to ask your state alcohol control board representative while shopping for your bar or bar location:

• What kind of liquor license do I need? What’s the fee? How often do I renew it?
• Where do I display the liquor license in my bar?
• How many licenses are issued in the town?
• What are the grounds for license revocation?
• What are the restrictions on my hours of operation?
• What are there any laws in this area unique to owning a bar? (Can I offer drinks to-go? Can I serve drinks in the outdoor area? Can I offer unlimited drink specials?)
• Can I open on Sundays? What time?
• Can I serve food? Do I have to serve food?
• Do I need another license for food? What’s the fee?
• Do I need another license for music? What’s the fee?
• What, if any, licenses do my employees need?

Even though it seems like a place to relax and have fun, a bar is a business. And just like any other business, ultimately, it must be profitable to stay open. In order to be profitable, you, the bar owner, need to know how much the drinks you serve cost you to make. The following steps explain how you do it.

Suppose that want to figure out how much a premium margarita costs.

1. Divide the cost of the bottle of premium tequila ($38) by the bottle size (750 mL) to determine the cost per milliliter.

   38 ÷ 750 = 0.0507 cents per milliliter

   Because the United States hasn’t embraced the metric system, you need to do more math. Bars in the US pour liquor by the ounce, darn it. Each fluid ounce is made up of about 30 milliliters.

2. Multiply your cost per milliliter (0.0507) by 30 to find out how much the liquor costs you per ounce.

   0.0507 × 30 = $1.52 per ounce

3. Repeat Steps 1 and 2 until you’ve accounted for all your ingredients. Then add up the cost of all the ingredients.

   For example:

   Premium tequila (1 ounce)	$1.52
   Grand Marnier (0.5 ounce)	0.54
   Lime juice (2 ounces)	0.18
   Agave nectar (1 ounce)	0.17
   Lime wedge	0.04
   Total Cost	$2.45

4. When you know what the drink costs you, set its menu price.

   Do the math, and then round up to the next dollar or half dollar. For this drink, here are a few pricing options.

   To Get a Beverage Cost of (x)%	Multiply the Cost by	Estimated Menu Price	Final Menu Price
   15%	6.67	16.34	16.49
   20%	5	12.25	12.49
   25%	4	9.80	9.99
   30%	3.33	8.16	8.99

   On average, you need to charge about five times what a drink costs you to make, giving you a 20 percent overall beverage cost. Some drinks may be a little higher, some a little lower. And always consider what your market will bear. If no one will buy a $17 margarita in your town, then you can’t sell it.

Though there are thousands of cocktails out in the world, there are a few that we suggest all your bartenders should know! You can have classic versions of these or put your own unique or fun twists to them.

• Bloody Mary
• Cosmopolitan
• Daiquiri
• Manhattan
• Margarita
• Martini
• Mojito
• Negroni
• Old Fashioned
• Paloma

Sure, you need to have condiments on the table for your patrons, but you need them behind the bar, too! You’d be surprised by the things you need to have on hand when preparing food and drinks. Here’s a short list of items most bar owners are often surprised to find that they need. Keep it on hand and tailor it for your own business.

• Agave nectar

• Assortment of bitters

• Fruit garnishes

• Grenadine

• Hot sauce

• Kosher salt

• Lemon juice

• Lime juice

• Real cream of coconut

• Salt and pepper

• Simple syrup

• Superfine sugar

• Tomato juice

• Worcestershire sauce

Even if you already have your menu planned, take all the following categories into consideration after your bar opens and you have a chance to observe what your patrons expect and which items that may benefit your business:

• Appetizers: An appetizer is a dish that’s served before the main meal in a restaurant. In bars, sometimes the only menu is an appetizer menu.

• Full-blown menu: Many bars have larger menus these days. Your menu may start with the pub grub idea and later expand further to include items such as salads, entrees (like ribs, steaks, and pasta), desserts, and even kids’ menus.

• Happy hour: Some bars choose to only serve food during happy hour, a period of time designed to draw in a crowd with special pricing and promotions.

• Pub grub: Pub grub is the affectionate term for typical bar food like chicken wings, onion rings, cheese sticks, burgers, and so on.

• Tapas: Tapas are snacks or small plates in the Spanish tradition. They don’t have to be Spanish food, just small portions of great dishes.

Of course, most people are honest, but you can take measures to ensure that all of your bar employees are honest. Here is a list of things you can do to head off potential problems and handle them when they begin.

• Conduct detailed weekly inventories.

• Do not count out tips from the register at night.

• Establish a “no drinking or drugs” policy for all employees.

• Have spotters and mystery shoppers pull surprise inspections on a fairly regular basis.

• Dismiss any employee who is caught stealing or breaking a law, with no second chances.

• Install security cameras.

• Keep storage rooms locked.

• Insist that non-sales must still have receipts.

• Thoroughly count your register drawers every night.

• Designate one door for entering and leaving.

Sure, people often go to bars to drink, but not all drunks are happy drunks, and they certainly aren’t safe, so it’s usually best to cut off their alcohol supply or send people home before they get too intoxicated. Here’s a list of warning signs so you’ll know when to take action:

• Patron is drinking fast.

• Patron stumbles when they are going to the bathroom.

• Patron is spilling drinks.

• Patron is engaging in loud, boisterous behavior.

• Patron is very quiet. Yes, you have to watch the real quiet ones, too.

• Patron is unable to pick up money or change.

• Patron is annoying your other guests.

• Patron has slurred speech.

• Patron is becoming tearful or emotional.

• Patron starts sleeping or gets drowsy.

And if the patron falls off the bar stool — it’s beyond over! Don’t let a patron get intoxicated to this point. It’s time for the designated driver to take the patron home, or it’s time to call a cab.

For more great tips on running a bar, explore the book.