The Bar Business Podcast: Smart Hospitality & Marketing Secrets For Bar & Pub Owners
Welcome to the Bar Business Podcast, where we help bar owners increase profits, attract loyal guests, and simplify operations without burnout so you can finally enjoy life outside the bar. Our host, Chris Schneider, draws on his over twenty years of experience in the industry to bring you valuable insights and practical advice every week. From creating a winning menu and designing a stylish bar, to effective marketing strategies and HR best practices, we've got you covered. Join us on the journey to bar business success and take the first step towards a brighter future for your establishment.
The Bar Business Podcast: Smart Hospitality & Marketing Secrets For Bar & Pub Owners
The Top 5 Bookkeeping Mistakes Bar Owners Make
How can you avoid the top bookkeeping mistakes that could be draining your bar's profits? In this week's episode of the Bar Business Podcast, I, Chris Schneider, promise to uncover the five most common pitfalls that bar owners face in their financial management. You'll learn how to sidestep these errors to ensure your bar's financial health and longevity. From the dangers of over-relying on technology to the benefits of manual data entry for smaller establishments, this discussion is packed with insights that will help you better understand your weekly profits and keep your business thriving.
We'll also explore effective financial management strategies that can transform your bar's operations. Discover why a well-structured chart of accounts is crucial for sound decision-making and how shifting from monthly to weekly bookkeeping can make a world of difference. Drawing from my personal experience owning two bars, I'll share how a weekly routine can lead to timely interventions and a more responsive management approach. By staying on top of your financial data, you’ll be equipped to address issues promptly and maintain the agility needed for ongoing success.
We delve into the perilous habit of managing finances directly from a bank account and why this often leads to financial instability. Learn why accurate bookkeeping serves as the ultimate "source of truth" for your financial decisions. Plus, get tips on maximizing menu engineering for profit, from determining food and beverage costs to fine-tuning your menu based on customer preferences and profitability goals. Don't miss out on these invaluable strategies that will help you run a more efficient and profitable bar. Join the Bar Business Nation community for even more insights and support on your journey.
Welcome to the Bar Business Podcast, where we help bar owners increase profits, attract loyal guests, and simplify operations without burnout so you can finally enjoy life outside the bar. Our podcast is packed with valuable insights, expert advice, and inspiring stories from successful bar owners and industry professionals.
Thank you to our show sponsor, SpotOn. SpotOn's modern, cloud-based POS system allows bars to increase team productivity and provides the reporting you need to make smart financial decisions.
**We are a SpotOn affiliate and earn commissions from the link above.
Thank you to our benchmarking data partner Starfish. Starfish works with your bookkeeping software using AI to help you make data-driven decisions and maximize your profits while giving you benchmarking data to understand how you compare to the industry at large.
Learn More:
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Chris' Book 'How to Make Top-Shelf Profits in the Bar Business'
Bar Business Nation Facebook Group
What are the five biggest mistakes bars make in their bookkeeping and as a bar owner? Profits are really how you survive, but most bar owners, if we're being real honest here, have no clue what their profit is week to week. Without understanding your numbers, there's no way you can provide for your team, your family or your community. So today we're going to break down the top five reasons bar owners are not getting the books they need to be successful. Hello and welcome to this week's edition of the Bar Business Podcast, where we help bar owners increase profits, attract loyal guests and simplify operations without burnout, so you can finally enjoy your life outside the bar. I'm your host, chris Schneider. In today's episode, we're going to talk through the five biggest mistakes bar owners make. Before we get started, a quick thank you to our sponsor, spoton, who provide a great modern POS solution for the bar and restaurant industry, and Starfish, who use AI to turn your books into actionable steps to increase your profits.
Speaker 1:So, with that said, let's jump into the topic for today. So, as all of you know, I have a extreme love of the financial side of our industry. I am, at heart, a number and data nerd, but frequently when I go to work with people. When I'm talking with folks and doing coaching and diving into what's going on in their business, it's hard for me to get too far because I don't have the data, the information. Books are not organized in a way that allow me to do any real analysis and to help them move forward. So today I'm going to count down the top five biggest mistakes I see bar owners make when it comes to their books and their bookkeeping and their recording of data all that good stuff, and we're going to talk about how to avoid them. So let's start with number five, and that is relying too much on technology. Now, I know that in a lot of ways in our modern world, everyone is selling us from the tech company perspective oh, we have this one package solution, we have integrations and you can use Zapier or we can directly connect through APIs between this program and that program and all the information will go back and forth. I will say, from a bookkeeping perspective, it's wonderful and great that we can do a lot of these things when it works, and the problem is most of the time it doesn't work. Now, it doesn't necessarily work because the tech is bad. In some cases.
Speaker 1:Some of the connections between programs are absolutely horrendous. For example, I've seen POS systems that you connect them to, say, quickbooks and rather than pulling over summary data at the end of the day and what you actually need to show in your books, it's pulling over every transaction so that can just give you. Frankly, it makes a mess of things because it's too much stuff to sort through. But the bigger problem is not that connection, usually it's how things are connected. And anytime you're mapping between a database or something that's generating information, like a POS system, and your bookkeeping software, you have to worry about mapping. And so mapping is telling QuickBooks if we're using QuickBooks as the example, when Toast or when SpotOn or when any program OpenTable, whatever you've connected, when any program OpenTable, whatever you've connected, is sending over data, Right, where does that data go in your books?
Speaker 1:And that's a problem for a lot of folks. So it's not like you can just allow programs, when you're connecting technology together, to map themselves. A, it's probably going to put stuff in the wrong spot. And B not all technology was made by, frankly, people that know restaurants or accounting. A lot of the tech out there for the restaurant space was made by software design teams and those software design teams normally have made a very, very valiant effort to talk to owners, to talk to accountants, to talk to people in the industry and to get an idea of what they should be doing, what will make sense. But let's be honest, frequently they miss a little thing here or there and it can lead to having some real issues in your books If you're not very careful when you go in that mapping and you just let it go to default and again, sometimes the information they're pulling over you don't need.
Speaker 1:So sometimes you just want to exclude or prevent a connection from pulling over all the data. Now there's a very simple, very simple answer to this, which is don't integrate things and do manual entry. I know for a lot of people that's not what they want to hear, that's not what they want to do. Personally, if I'm talking to a client and I'm saying, okay, let's set up your bookkeeping, I like to rely somewhat on manual data and there are a few reasons for that. Primarily, it's because whomever is entering that I think for a lot of really smaller bars and restaurants. So if we're talking sub, say, a million and a half a year in sales, you really don't have margin to pay somebody to do bookkeeping for you. And as an owner, you need to be really close to your numbers because while probably the majority of bars are under that like million and a half mark, you're risking a lot. There's a lot of potential, when you have a lower sales volume, for one thing to go wrong and for it to really really put you in a bad spot and cause a downward spiral.
Speaker 1:So manual entry gets around, relying on technology, and it does take some time. But as an owner, it can get you way more intimately familiar with your numbers, give you a better understanding of what's going on day to day and really help you understand your business. That's again not to say that you can't connect things. There are great pieces of technology out there. They were getting better and better every day. But do not rely too much on technology.
Speaker 1:And when you do rely on technology, dig in a little bit. Make sure that what you're setting up, the mapping of it, how things are being pulled between different pieces of technology in relation to your books is all set up. And if you're unsure of how to do that, hire someone. Because the biggest trap here and I see this way too often is that an owner does all these things and they set it all up and they go oh my God, is that an owner does all these things? And they set it all up and they go oh my God, this is wonderful, it's going to work. And then you hire a financial consultant like me, or you hire a bookkeeper, or you just take it to your CPA to do your accounting every year and what you've set up doesn't work. Hire somebody, bring somebody in early in the process If you can, because that's going to give you the best data and it's going to make sure that everything's talking to each other properly.
Speaker 1:Because, frankly, in books, if you have a small problem that happens every day, it becomes a very large problem to solve, trying to get everything straightened out and trying to make sure that books are in order. Now the fourth biggest problem I see when it comes to bookkeeping and bars actually relates kind of the first, because in the first or the fifth problem, because we're doing a countdown where we talked about relying on too much technology, it was a lot about mapping. Well, mapping is going to depend upon your chart of accounts and a lot of bars out there do not have a great chart of accounts. Now, whether you've seen things I've put on the podcast or things that have been posted on social media shorts. You know I like to talk a lot about things like tips are not your revenue. Sales taxes are not revenue. Those are liability accounts and you have to get your book set up properly and that needs to happen honestly, like before you open, to make sure everything stays straight.
Speaker 1:Now, at this point in the year, if you're looking at your books and you're going, oh my God, this is terribly organized. I can't pull any reasonable data out of here Probably should make a plan and if you need help, let me know, but make a plan. Say, january 1st, I'm going to change the way I do my bookkeeping. I'm going to put in place new systems so that next year we have solid debt. There probably isn't a lot of bookkeepers and finance people will try to sell you bookkeeping cleanup at this point in the year and trade and start of accounts at the end of the year and all that I will tell you. From a standpoint of data, that's great. From a standpoint of that person billing hours for them, it's great. But you're probably spending a lot of money and you're going to have a giant mess to clean up one way or the other. So in a lot of ways, you might as well let your tax person do it, because they're going to file taxes.
Speaker 1:You have what you have, but now is the time, if your chart of accounts is not great and if you don't see usable data when you look at your books, to start saying, okay, next year, what are we going to start on January 1st that we can use to really make sure next year we have a full grasp of our financial information. So what does a chart of accounts that's great look like? Because obviously I'm saying you need this, but what does that actually mean? Well, one of the mistakes that I don't see a huge amount but sometimes I see, especially with people that are not hospitality folks and have a bookkeeper that is not hospitality trained and does not understand the way that data works in bars, and also something I see with just kind of newer owners or even older owners that have been in business for a long time. A lot of this is more small town type stuff, where they make their money. They don't really pay attention to their numbers. They know they make a fair amount of money and that's good with them is that they're not breaking things out in their chart of accounts in a way that's going to present us with valuable data.
Speaker 1:So I think if you've listened to me for any length of time, you should know that you know your food needs to be separate from your beverages. Within your beverages, it's probably a smart idea to at least at a bare minimum, segregate out beer, wine and liquor, so you would have you know beverage cost of goods sold, beverage revenue and then sub accounts under those for beer revenue, wine revenue, liquor revenue. Beer cost of goods, wine cost of goods. Liquor cost of goods. Now, depending on the complexity of your operation, what you're doing you might even want to break that down more. That is something that's very true.
Speaker 1:When we get into the detail that you can put on a chart of accounts, you can go to a huge amount of detail. You can do very little detail. What matters is that the data you're getting you can use to make decisions, that you can use it to analyze your business, and that will never happen. You will never have the information you need to properly take care of your business without a good chart of accounts. Now I think you guys have heard me say before I use a chart of accounts that I start with about 310 accounts and I whittle it down depending upon the business. If anyone would like that, shoot me an email. Go to the website, say hey, I'm interested. I'm more than happy to send you over that chart of accounts and talk with you a little bit about how I use it. But if you don't have good organization for your data, your data is not useful. Your bookkeeping will not give you actionable information that you can work Now.
Speaker 1:The third worst mistake I see when it comes to bookkeeping is doing books on a monthly basis. Now, a lot of times this happens because we are using a bookkeeper for our books and they're going to at the end of the month. They're going to get all that information from you. They're going to do your books and somewhere. You know, if you're lucky the 15th of the next month, a lot of times it's the 21st or the 28th, right, we're talking two to four weeks from the end of the month. You're actually getting the books completed or at least back to you to review to make sure there aren't any mistakes to send back to them to fix.
Speaker 1:And that is a long processing time. If you're only looking at data that is three weeks old that you get on a monthly basis. It's not really actionable. Anything that you could have changed or helped to save the numbers last month. You're way past that opportunity. As a matter of fact, if I'm doing it every month, with a three-week lag time between the end of the month and when the books are prepared for the month you're looking at, not even being able to correct the issue this month that you discovered existed last month. So it's two to three months from the time an issue happens till the time you're able to deal with it. That obviously does not work. It's just not going to be valuable for you to constantly be looking at these lagging indicators that give you no real information.
Speaker 1:Now, I said when we were talking about relying on technology. I encourage owners, especially owners of smaller bars, to do their own books. Or, if you're going to use a bookkeeper, to use a bookkeeper that's going to do it on a weekly basis, so that you have more data and more information. And that's the answer here. Right Is to do the books every week. And here's the amazing thing about doing books every week. A lot of people say well, that takes a lot of time, it will. When you start Like I'm not going to lie it will take some time to get used to the data entry, to get used to the workflow and the process of that.
Speaker 1:But if you do your books every week, I used to do them every week for two bars. I had two bars. I did both bars books every week. I did one on Wednesday night. I did both bars books every week. I did one on Wednesday night, I did one on Thursday night. Between the two bars. My total time doing bookkeeping each week was less than five hours. There are ways to streamline this and make it not too hard. It took me an hour and a half to two and a half hours per bar, depending on if I got interrupted or not.
Speaker 1:To be real honest with everybody, I started by doing the books in the bars and then it would take me three, four, five hours. I ended up always doing my books from my house. I would just take the files I needed home and bring them back and I could get through at my house where it was quiet and I wasn't being interrupted. I could get through doing the bookkeeping in an hour, hour and a half. My books were always accurate. So I had management meetings on Thursday Well, thursday and Friday for the different bars, because I did the bookkeeping Wednesday or Thursday or, I'm sorry, tuesday or Wednesday, and then Thursday and Friday were the meetings. It's been years I don't actually remember.
Speaker 1:But the point is that before the next weekend we were reviewing data in a manager meeting for the prior weekend. We were never that far behind. If there was an issue the prior weekend, we had the issue at least identified, had attempted to figure out the cause of the issue and had implemented something that we the cause of the issue and had implemented something that we thought would help the issue, help eliminate that root cause, by the next weekend. So that always made sure that there was no delay in our data. We were always addressing issues as they happened and it allowed us to be more nimble and to understand what was going in the business week to week. We didn't wait two months to solve a increase in prices, let's say for food from our supplier. We noted it, we were aware of it, we saw the food costs go up a little bit week to week and then we said, okay, we need to raise this price. We didn't allow labor issues to linger for a month and then wait three weeks to find out that we had our labor cost off. We knew it within four or five days of the close of the prior week days of the close of the prior week.
Speaker 1:So if you do your books on a weekly basis, you have the ability to be a lot more on top of what's going on and really to ensure the success of your bar, because you understand where you are and what's going on and where you're going before it's too late and where you're going Before it's too late, before you actually hit into a real issue. That brings us to number two. So the second biggest mistake I see bar owners make when it comes to their bookkeeping and their finances in general, which is managing your finances from your bank account. And in a lot of ways, managing your finances from your bank account goes back to the last point I made, because the reason people do this is that their books aren't up to date. They don't have a record somewhere of what is in their bank account. So they look at their bank account online and they say, oh, I have 10 grand. Okay, great, you have $10,000, but did you do payroll, say today, and the payroll checks all come out tomorrow and that's going to be $7,000?. So you say, well, I have $10,000 in my bank, I can go spend this, but payroll is $7,000, and that comes out tomorrow.
Speaker 1:So managing your finances from your bank account really does not work as well as people think it does. It leads you to a situation where you have ACH issues, where things can get overdrawn, where you're going to have suppliers that don't get paid when and how they should, and that's especially true when you have auto-drafted ACHs and have auto-payments set up. Frankly, if you're doing your books every week yourself, you shouldn't need auto-payments. You should be able to go make that payment recorded in your books all simultaneously, and then you don't have to worry about it. Managing a business from a bank account is purely a way to put yourself at huge risk of making mistakes about how much money you have, and it's a way to eat through your profit.
Speaker 1:So what do I mean by that? Well, if you look at your bank account and say I have 10 grand, I can spend 10 grand, and let's say you've accounted for payroll on things, let's say you're not in a position where you're. And let's say you've accounted for payroll on things, let's say you're not in a position where you're overdrawing your account or have any issue like that. But every time you look at your bank account you say, oh, I have this much money for the bar, I can spend this on the bar, okay, great. So what are you getting paid? If the balance in your bank account does not grow, you, as an owner, don't get paid. So look at your bank account balance and say I have this much money to spend. I mean, if you don't want to put money in your own pocket and your books are up to date, all right, like I guess that's an option you can make 90% of the time when people are managing out of their bank account. Option. You can make 90% of the time when people are managing out of their bank account.
Speaker 1:I see three things that go along with it Bank service charges because they're overdrawing and they're bouncing checks and all sorts of weird things are happening in that regard. Owners that are struggling because they're spending the money they need to take home to take care of their family, because they can't differentiate that, because they're spending the money they need to take home to take care of their family. Because they can't differentiate that, because they're using their bank account and they're spending everything all the time. And the other thing I see a lot of times when owners are managing from their bank account is they end up with a bunch of stuff they don't need and they go. Well, I have 10 grand to spend and you know someone in the kitchen wants a new whatever. They want new cutting boards. You really don't need new cutting boards, but because the money is there, you spend it.
Speaker 1:There are a lot of people let's be honest in our own lives, personal lives a lot of us spend too much money on things we don't need. So everything about just looking at your bank account and going, oh, I have this much money, I can spend it, or oh, this is how I'm doing financially for my business is wrong. A because psychologically it's going to open you up to all those issues and B because you really don't know how much money you actually have to spend, because your bank account balance doesn't reflect things that could have already happened, because maybe that ACH transfer hasn't come out yet, maybe a transaction is still pending and isn't showing in your balance. So it's not accurate and it's full of issues, even though a lot of business owners do it and for the record it may seem like I'm bashing a little bit on some of the newer ways of doing things, and I am, I will admit, a bit old school in the way I think, and I am not big on technological integrations and things like that, because I think they often cause more problems than they solve.
Speaker 1:If you're someone that writes checks like if you are handwriting checks still or printing out checks still and sending them around which I know not a lot of people do, but I mean, if I'm real honest, I always have for my businesses because I just it's the way my brain works, because I'm like 80 in my head Managing your finances from your bank account is even worse. Right, because you're floating those checks, you've already spent that money, it just has not transacted yet, and so I have definitely had times where I have multiple checks out to multiple suppliers and a rent check that I've sat in. You know, my bank account might say 40 grand and I might be floating 30 grand in checks, and so if I manage from that 40, I'm in a lot of trouble. Regardless if you're doing ACH transfers or checks or however you're running your business, managing from your bank account is never a smart play.
Speaker 1:Now here's the number one problem I see among bar and restaurant owners I talk to that just absolutely prevents them from being able to move their business forward, which is that the bookkeeping is just not getting done. And I know that sounds simple, right, like well, your bookkeeping sucks because you haven't done it. But there are multiple reasons for this. And I know that sounds simple, right, like well, your bookkeeping sucks because you haven't done it. But there are multiple reasons for this. It could be you've made things too complex. It could be that you haven't trained anybody. It could be that you're supposed to do it and you're not. It could be that your bookkeeper is doing it but not doing it properly or not doing it well, or that your bookkeeper is miscategorizing things. So it's done, but it's not right.
Speaker 1:The only way that your financial information can help you move your business forward is when it is a source of truth. Everything in your bookkeeping needs to be accurate, it needs to be true, it needs to be easy to understand and it needs to work for your business, for your situation. If your books are not a source of truth, well then they're never going to tell you anything. There are zero help for you in your business. They are frankly, irrelevant and whether or not you make money is probably a crapshoot because you don't even know your accurate income and expense.
Speaker 1:When you hear a lot of other coaches, consultants, people in this industry talk, they will tell you there's an 80% failure rate. And if you've listened to my podcast long enough, you know I don't believe that Because, frankly, the articles written on the Ohio State study that they all quote to say there's an 80 five-year failure rate. I've read the ohio state study. I can't find 80 failure rate in that study. I think it's like 62 or something. But the thing is, even if it is 62, you buy a bar in five years, more likely than not, you will fail. You are more likely to fail than you are to succeed. Period, end of story.
Speaker 1:There is no question about this and not doing your books is one of the reasons why a lot of people fail. They fail because they don't understand their information. You can I mean, I guess in some cases you can have all the numbers right and just be a jackass and have no customers for that reason, but more often than not, you're a nice person, you're trying to do good things, you're trying to help your community, you're trying to build a place for people to gather and have fun and experience life. Because you're not doing your bookkeeping, because you're not paying the attention you need to to your numbers, those books are not a source of truth. Your numbers, those books are not a source of truth and therefore you lack the information you need to be able to solve problems when they occur. If your food cost is too high, well, a, you have to know your food cost is too high. B you have to have the information to do something about it. So if you're not doing the bookkeeping, or if you're doing it poorly, or if you're doing it in a way that's not based upon a chart of accounts that's giving you the information you need to know that's accurate, or if you're doing it with long lead times, any of the other four things we talked about essentially are encompassed in this one point. You're not doing a bookkeeping in a way that makes it a source of truth and, again, unless your books are a source of truth, you're not going to know your numbers.
Speaker 1:The majority of people in this business fail. Chances are you are going to fail. They're going to fall flat on your face. So make sure that your bookkeeping is a source of truth. With that, guys, that's the five things to avoid when it comes to your bookkeeping. So number five relying too much on technology. Number four not having the right organization and chart of accounts. Number three doing books on a monthly, not weekly, basis. Number two managing your finances from your bank account. And number one not having your financial data set up in a way to make it a reliable source of truth that you can use to understand and solve problems in your business.
Speaker 1:Now, before we go today, we do have one listener question and if you would like to send a question in the podcast, go into the show notes. Right at the top. There it says text the show or something like that. I always forget what it says, but you can click that link, you can shoot us a text, just so you know I can't reply to that, but if you ask a question there, it comes through and then I will answer it on the podcast. If you want an answer specifically for me to your specific situation, best way to do that is to use the contact form, shoot an email, set up a Saturday session some other way. But I love listener questions and I think it's great because it gives you guys an opportunity to ask something and it gives everyone else the chance to learn, because if you have a question, someone else probably does too. So this was the question I got this week.
Speaker 1:I've spent the last few years making sure my food is tip-top quality-wise. It's clear cost control is something I'm not good at, but it's time to change. How do you go about making cost control measures within your business and ensuring your team is following expectations? Cost control measures within your business and ensuring your team is following expectations. Now, coincidentally, I had this podcast planned. I had this question. I didn't actually try to make these fit together as well as I do, but if you think about that last point, of our five biggest mistakes, you can make number one. Our five biggest mistakes. You can make Number one your book's not being a source of truth. That's our first problem, right? If we have a cost control issue and we want to get good on cost control, we have to make sure our books are accurate. Now, assuming that's the case, we need to make sure our costs are accurate down to the penny as our next step, because there's no way to do analysis unless you know everything. All the numbers you're dealing with are accurate. So make sure you have costs down the penny for every single item on your menu when this is just as true.
Speaker 1:Obviously the question was regarding food, but the same. All of this is, process-wise, the same as a cocktail menu or even just a Jack and Coke. All the math behind food cost and beverage cost is the same. So accurately determine your cost down the penny. Then what you want to do is determine the gap between your theoretical and actual costs. So what do I mean by that gap between your theoretical and actual costs? So what do I mean by that?
Speaker 1:Well, if I should, let's say this is going to be a really low-priced example. But deal with me. I'm selling Jack and Cokes. That's the only thing I sell is Jack and Coke. I sell them for $5. It costs me $1. I know it would cost more than that, but again, purposes of example, my liquor cost should be 20%, right? I'm selling it for five. It costs me one. Now again, first thing I do is I confirm that it is actually $1, not $1.10, because that's going to change the math quite a bit. But I double check it is $1.
Speaker 1:Now, when I look at my, that's my theoretical cost. Right Because it's the cost, what I'm paying for it. Now the actual cost comes in from inventory, from how much product I've actually gone through. So when I look at actual costs I say, okay, this is the amount of revenue I had, this is the amount of Jack Daniels I poured through my actual cost because there was some waste, there was some spillage, was 23%, so I should be at 20%. I am at 23%. I need to know that variance Because the next thing I would do is say, okay, is that variance more than 2%? Which in this case it's absolutely more than 2%. So now I need to take the time to root cause that issue and problem solve. And if you want really good advice on finding the root cause and on problem solving, if you look at previous episodes, I've gone into those in quite some depth Once you have determined why that variance is over 2% between your actual and theoretical cost and you've solved that problem, because that's external from the actual way that your menu is organized or what your cost should be. So let's solve the problem that exists, that is outside of the control you get with numbers and just pricing and costing, and then, once that's solved, move on to menu engineering.
Speaker 1:Talked about menu engineering quite a bit in different episodes but just as a reminder, menu engineering is using popularity and menu menu mix percentage is popularity, but using menu mix percentage or popularity and contribution margin to graph all your items. Whether you're just looking at appetizers, it would be all your appetizers. If you were looking at food, it would be your entire food menu. Cocktails right, all your cocktails. You're going to graph those items based upon popularity and contribution margin into four categories.
Speaker 1:So you'll have stars that you make a lot of money on and are really popular. You'll have plow horses that are really popular but you don't make as much money on. You'll have puzzles that you don't make as I'm sorry that you make a lot of money on but aren't that popular. And then you'll have dogs that aren't popular and you don't make money on. Now, obviously, all of this is relative because we're comparing percentages to graph them. All of this is relative because we're comparing percentages to graph them. So you may have something that technically falls into that dog category of I don't make as much money and it's not terribly popular but isn't a terrible item because everything else is just out of this world.
Speaker 1:Great, but it at least gives you a framework to think through okay, where am I making money, where am I not? What are my guests like, what are they not like? And it's a good kind of intellectual exercise to determine how you want to move forward with your menu. So once you do that, you've got the menu engineering done, you're thinking through this stuff, you can adjust your prices, your items, your portions, remove items from your menu, add items to your menu, cause you say, well, a lot of people like it when I do X, so what's like X? And then you can work with that from there, create a new menu, roll it out. Obviously, if you're doing your bookkeeping properly, you should be looking at that actual versus theoretical on a monthly basis At a minimum. A weekly basis would be better. And once you have that new menu out, watch your costs, watch all that. But definitely take one month from when you launch the menu and three months from when you launch the menu and do a more detailed dive and really make sure that everything is great. I recommend redoing your menu engineering every three months, and so every quarter you just kind of start this process over again. That should mean that within about a year your menu is laser focused on what your guests like is laser focused on what is profitable for you and creates a great win-win for you and your guests.
Speaker 1:Well, guys, we're going to wrap it up for today. If you enjoyed today's insights, make sure to like, subscribe, leave a review all that stuff that everyone says at the end of the podcast. If you want to gain more insights, if you want to connect with bar owners, go onto Facebook. Join Bar Business Nation. There's a link for that down in the show notes. We go onto Facebook, join Bar Business Nation. There's a link for that down in the show notes. We're having great conversations. It's a place to ask questions, learn and really we're trying to build a community that helps everyone be more successful. Until next time, I hope you all have a great day and we will talk again later.
Speaker 2:Thanks for listening to the Bar Business Podcast. Make sure to subscribe so you don't miss any future episodes. Check out our website at barbusinesspodcastcom and join our Bar Business Nation Facebook group for more strategies and tips.
