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 of Entrepreneur Media, Inc. 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 offer some tips on what to keep in mind before purchasing a computerized accounting system for your bar.
The groundwork you lay to operate your bar includes the systems you use to track liquor and food. How much does the customer owe the server/bartender? Also, what liquor and food do you sell the most? The systems you choose depend on the type and size of bar you have.
You'll have to employ some sort of system for ordering and paying. You have many to choose from, and whichever one you choose will most likely bring lots of baggage with it. You should decide which system you'll be using before you research and purchase any computer systems so you'll know they'll be able to handle the system you've set in place.
Here's a list of some of the systems used in this industry to pay the check, along with the pros and cons of each:
- Pro. Since there's no ticket involved, all the server has to do is call the drink to the bartender, deliver it and get the money for it. It's a very fast-operating system.
- Con. Who rings the drink in? If there's only one register, then the bartender will most likely ring it up. If so, when does he get the money for the drink if the customer pays with a credit card?
- Con. There's a high chance of theft in this system. Using cameras focused on the register could cut down on theft, but you may want to invest that money in a computer system that stops theft without surveillance.
- Pro. It's easier to account for drinks made if they're all written down; there's organization and control of all the checks.
- Pro. It's much cheaper than a computer system.
- Con. With this system, there's the inability to order food and liquor from the same check.
- Con. It can be time consuming, especially if your bartenders or servers have to write down each order or each round of drinks.
- Pro. This is the most efficient and effective way of communicating in a clear and concise way to the bar and the kitchen.
- Con. This is the most expensive ordering system.
- Con. There are many different kinds of computerized ordering systems. Generally, the expert you rely on in this area is a salesperson. If you buy a system with a lot functions you won't use, then you could be wasting money.
A computer system can keep track of all your sales--right down to the point of how much you've sold of each type of product. If you decide your operation warrants the investment needed to set up a high-tech system, thoroughly inspect any cash register system you consider for your business and make sure you understand the ins and outs of the computer. Be realistic about its ease of use and justify its cost--even a "small investment" can hurt you if you have to scrap the whole thing and buy a different system. Will you need to have a separate machine to process credit cards, or will the computer handle it? Try to visualize how well the system will work when the people using it are rushed. Make sure at least one person on your staff has a thorough knowledge of your computer and/or cash register system in case anything goes wrong. Be sure this person has a cell phone so you can reach them in case of an emergency breakdown.
Factors to consider when choosing an accounting system include the level of sales you expect, both from alcohol and food, and the efficiency needed for your staff to operate at its full potential. Also, look for holes that your accounting system might leave open for theft at all levels, not just servers and bartenders. No one thinks they're hiring a thief. Many people who might steal if the opportunity arose don't consider themselves thieves, either, so they don't come off as such.
If you use the cash-and-carry system, where the drink is ordered by the server verbally and then paid for before the bartender or server rings it up, you might find many "forgot to ring it up" drinks, as well as a few given away for free. It's the nature of the system. If your inventory controls are so tight that you'll notice when too much has been used, then you can use this system without much fear.