This excerpt is part of Entrepreneur.com's Second-Quarter Startup Kit which explores the fundamentals of starting up in a wide range of industries.
In the book Start Your Own Bar and Club, the staff at Entrepreneur Press and writer Liane Cassavoy explain how you can launch a profitable bar or club, whether you want to start a nightclub, neighborhood pub, wine bar or more. In this edited excerpt, the authors offers some words of advice on stocking your bar with the liquor your customers will be drinking.
Once you have your equipment in place and you're just about ready to open your new bar, you can start working with suppliers to get your startup inventory. That means it's time to finalize your drink and food menus.
First, start with your beverage selection. If you're opening a beer bar or brewpub, this will be quick and easy -- you probably have a good idea what you're going to offer on your drink menu. If you add wine, then you have a little more work to do. And if you serve liquor, then you'll need to pull out a piece of paper and start creating your inventory.
Most bars that offer beer, wine, and liquor carry three or four different levels of liquor quality. The first and lowest quality is "well" liquor. That's the liquor your bartenders will serve when a guest doesn't specify a brand. They're called well drinks because the bottles sit in the bartender's well in the workstation, away from customers' direct view.
If a guest orders a specific brand by name, this is referred to as a "call" brand liquor. These are generally the next level of quality and the next level of pricing. Finally, you can have "premium" and "superpremium" liquors. These are the high-priced brands that aren't ordered as frequently as the call brands. Premium and superpremium liquors will have an even higher price than call brands and should always be placed prominently on a shelf in the back bar.
Which brands should be call and which should be premium? That's entirely up to you. You can start with a basic structure and change it along the way as you get more of an idea of what your customers are drinking and how much they value certain brands.
You should also keep a close eye on your inventory throughout the life of your business. You don't want to buy too much, or you'll be wasting your money. You also don't want to buy too little, because then your customers may not get what they order. Walking the tightrope is the name of the game when it comes to inventory in the food and beverage industries. If you don't manage your inventory properly, it can mean the end of your business--even if you do everything else right.
The brands of alcohol you carry in your bar will vary depending on what your customers are drinking at any given time. Just like fashion, certain liquors go through popularity trends. What's a hot-selling drink now may not fly out the door in six months. You need to keep a close eye on what's selling and what's not.
The Quantity Question
Generally, you want to buy liquor by the case (12 1-liter bottles per case). Your back bar will most likely be designed to hold liter- or quart-size bottles. These sizes are also the easiest for a bartender to handle. However, if you're using an automatic dispensing system, you might want to get 1.75-liter bottles instead to save on cost and restocking frequency.
If you find you're not using a particular type of liquor enough to justify buying a case, you can talk to your supplier about buying a split case or a mixed case. This option costs a bit more per bottle than a regular case, but it will save you space and probably money in the long run.
You'll want to buy plenty of your well liquors and beer, and restock your house wine at least once a week. Specialty wines can be purchased by the case once a month and some as infrequently as twice a year. Keep in mind that liquor doesn't go bad, but some wine and beer can spoil.
Once you have your startup inventory in place, you'll want to figure out your par for each type of liquor. Par is the number of backup bottles you need behind the bar to keep from running out of well- and call-brand liquors in the course of one business day.
It may take a while before you start to figure out what your par is for every type of liquor. For example, let's say you decide to use the number of bottles used at each bar on the busiest night of the year as your ongoing par. You should then set a par amount for each brand of liquor in your well brands, call brands, and frequently used cordials. You should always have a minimum of at least one backup bottle for each of these sections.
Once you've reached a reliable par behind each bar, your bartenders and barbacks should never have to go to the storeroom while you're open. As part of your bartenders' closing (or opening) duties, they'll need to make sure the bar is at "full par" for the next business day. If you have a large bar or club, you might also want your bartenders to check the par between shifts.
Some bars keep a watchful eye on their inventories (and their staffs) by requiring their bartenders to fill out a liquor stock control form. When it's time to restock the bar, the bartender puts all the empty bottles on top of the bar. They write down the total number of empty bottles on the form and give it to the manager. The manager checks the bottles against the form and gives the replacements to the bartender. This process makes it easier to keep track of inventory and discover missing bottles.