Last week we asked for your invaluable input on what were the challenges you faced running your bar in 2011 and you answered, resoundingly…loud and clear. We hear you and we feel you. There were many challenges that you faced this past year, but here were the overall themes that were mentioned most often…
….YOUR TOP 10 CHALLENGES OF 2011 WERE:
1. Economic Conditions:
Hype or no hype, we think a recession exists, then it does. When unforeseen, occurrences like a recession hit, then that occurrence has a concussive impact on your business that would make Al Qaeda envious. The primary impact is a psychological one; it paralyzes you at a time when actually you should be taking action. The only question is what action? How can one counteract external forces that are outside of one’s circle of influence, but definitely within one’s circle of concern?2. Generating Business:
The number one way to make money in the hospitality business is to ensure that your establishment is full, and, if can, you have a line of customers standing around the block to frequent your establishment. Beyond volume, you want to ensure you have the right clientele. For this You need to know your audience, know what rings their bell, keep them coming back, price it right. Off target, then the Open sign will be off for good.3. Cash Flow:
Your monthly cash, like your revenue are a variable. What is only partially a variable are your overhead costs. Regardless of how much revenue you make or how high or low your profits are, you’ve got bills to pay, electric, rent, equipment lease, liquor license fees, personnel cost, just to mention a few. In addition, unforeseen events can put a dent into the portion of revenue you think is profit. If the city decides to tear up your sidewalk to lay new sewage pipe for the next 6 months, your cash flow is going to be affected. Larger than expected tax bill, AC unit goes kaput, walk-in cooler dies…Cash Flow, it’s king in the hospitality industry and you better know how to stay in the Kings good graces, otherwise off to the gallows. No matter how busy you are if you don’t manage and track your cash flow well for the good months then the bad months can quickly shut your doors….and we mean quickly (2011 victims).4. Competition:
The best way of beating the competition is staying ahead of competition. That means you need to have better: quality, relevance, ambiance, prices-value, employees, cash flow and cost-control.5. Employing Quality Staff:
Poorly performing employees will drain your resources in time and money; they’ll scare your customers off (or attract the wrong ones) and most likely steal from you. Solving this problem by replacing them, or keeping them on too long can be equally expensive. You need the means of identifying who’s honest and whose not, then keep the good apples while eliminating the rotten ones. Your greatest assets are the people that work for you, if and only if, you’ve got the right ones working for you.6. Theft and Shrinkage:
Two adages ring true eternally in the bar business:
a. Opportunity almost always makes thieves.
b. And inspect what you expect.
When was the last time you did an inventory or spot-checked your staff? The bottom line is that the opportunity to steal from you is far greater than your managerial ability to stop them. And whatever you’re thinking to make it seem not so bad think again: your establishment has at least a 30% shrinkage and any liquor cost over 12% is unacceptable, click here for a more detailed explanation.7. Maximizing ROI (and Mastering Tools of the Trade?):
We’ve just witnessed the greatest technological leap forward for mankind ever in these past 15 years. The I.T. revolution has transformed and is transforming the world faster than it takes to make a Dirty Martini. And the best is yet to come. The earth is flat again and every business and it’s core functionality and structure are being transformed. I.T. is the 800 lb. gorilla in the bar that will squeeze you to death if you don’t give it a banana and play with it. Meaning, are you a peripherally aware witness to the revolution or are you a fully engaged participant? The tools are out there like never before to improve your businesses performance. Manage and track; employees, inventory, dollars and pennies and even customers. I.T. when used right offers the highest ROI and performance enhancement than even Viagra does (for your business of course). The Dow 10 has been turned upside down and inside out simply because I.T. has transformed every industry out there the past 15 years. You can have your food, cocktail menu and ambiance harken back to the 19th century but your management controls better embrace the future, otherwise you will end where the 19th century ended up….in the past and mostly forgotten.8. Time Management:
If Cash flow is King then his gilded Queen is time! You simply don’t have enough time in the day to accomplish all that your business needs you to accomplish. Manage time well; make the best use of it for you and your employees and the Queen will use her charms on the King to give you a pardon from the gallows. Burnout is one of the plagues of the hospitality industry, you need to give time its’ due respect.9. Liabilities:
Customer has too much to drink at your bar and then gets in the car and kills someone, who’s accountable? Guess who? You. Employee slips and falls in the kitchen…whose responsible…you who. You need to save for a very rainy day in the bar and restaurant biz…at some point it will rain. Thus back to cash flow…make sure it’s maximized and you are extracting every cent you can without chasing off customers or employees.10. Inventory Management:
False sense of security sets in all too often…then epiphany! You catch your most “trusted” walking out the back with a bottle of Jack and a T-bone. Unless you track every item from stove to table to register to bank or from bottle to register to bank then you should not feel secure in your investment. Find a way to track it without requiring too much time and manpower. Then you can sigh a breath of relief and bask in the glow of that shimmering profit machine you call your business….or neglect it and quickly wallow in the shattered remains of dreams turned into nightmares as life savings, partnerships, resources and effort is squandered in a poorly run business that is no more.MAKE SURE YOU SIGN UP FOR OUR FREE WEBINAR for Bar/Restaurant Owners and Management!
DATE: Tuesday, Dec. 13th @ 3PM Eastern (2pm CT, 1pm MT, 12pm PT)
LENGTH: @ 45 Minutes
We’ll go into more depth with eye-opening data and facts from our clients regarding your top 10 challenges and how to mitigate and overcome them for 2012.
