Managing an efficient and profitable bar relies on having accurate information about the inventory levels on hand. For bar owners and managers, one of the most important yet tedious elements of running a successful and efficient business is regularly checking inventory.
Not only does an accurate inventory can help detect lost or stolen items, but it can also guarantee that you have enough supplies to cover busy periods and even give insight into sales trends -- something crucial for operators wanting to ensure profitability. But many operators may not know how often to count inventory in their bars or what processes should be used when doing so; that's why understanding the bar inventory basics is critical.
Read on as we discuss what frequent inventories mean for bar businesses and offer some tips for best practices that can help you create a reliable and proper inventory process to keep track of your inventory performance.
The basics of bar management
A bar or restaurant cannot profit without starting inventory and having a thorough understanding of the basics behind it. An inventory count is an essential procedure for accurately tracking the starting and on-hand inventory of your business, as well as when it was bought. With a reliable record, you can make informed decisions about inventory management and ensure that supply meets demand.
Breaking down your bar inventory system process into manageable chunks is important to make it easier and more effective. Let's go over the steps below:
Step 1. The first step of your bar inventory efforts is to create a list of all the items that need to be counted in your bar (this is also called your starting inventory). This should include everything from liquor, beer, gin, and wine inventory, to cups, and food items.
It’s important to have a solid liquor inventory system in place where each item is tracked with an individual SKU number or code so that it can be easily identified when counting inventory.
Step 2. Breaking the list down into sections will make it easier to identify what is where when taking bar inventory. Try splitting up the list into different areas, such as liquor, beer, and food items.
Step 3. Make sure to record where each item was purchased from, such as a distributor or supplier, and the liquor cost. This helps you to better track your supply costs and identify the best places to purchase in bulk.
Step 4. It's beneficial to keep a physical record of your bar inventory counts (how much inventory is available) as well as a financial tracking system for each product or type of item. Doing this will help you decipher patterns and always have an accurate understanding of what is available, how much has been sold, and the revenue being generated.
Step 5. At the end of every shift, you must take an ending inventory count and compare it to your starting inventory. This will assist you in recognizing any discrepancies from stock levels such as items that have not been sold, damaged, or may have been taken without permission during work hours.
Optimizing Your Stock with Bar Inventory Analysis
Once the basic inventory system has been established, it is then essential to monitor and analyze sales data in order to effectively interpret it. Uncovering sales trends and patterns from past inventory data across the entire period can be achieved by diligently monitoring your inventory. This insight will help you identify what is working well, how to adjust current strategies, and plan for the upcoming inventory period. For example, in your current inventory usage, if you notice a particular item is selling fast or at a higher rate than other items in your bar, you may want to order more of it.
Through bar inventory analysis, you can pinpoint discrepancies in your stock and explore potential ways to slash costs or improve the process. As a result, not only will this allow you to better manage your finances but also guarantee that you are maximizing profits.
But what amazing insights can be gained by accurately tracking and recording your bar's inventory with a POS system? The advantages are huge, particularly when done correctly. For instance, the following metrics can tell you about...
- Your bar's variance, otherwise known as your shrinkage, loss, or excess inventory can help you streamline inventory operations and maintain profitability.
- Achieving the ideal par level and reorder point for each of your products is essential in order to optimize inventory management.
- Your pour cost on each type of liquor, beer, and wine can help you understand the effectiveness of your pricing.
- You can prevent sitting inventory by making wise purchasing decisions and pushing sales of those items through your bar. With an understanding of inventory usage, you'll be able to identify products that will bring in maximum profits as well as implement strategies for successful sales. Additionally, analyzing data from specific days or times will give you a clearer idea of where customers are putting their money.
- Crafting smarter strategies to reduce your pour costs and save money.
- As you analyze the selling trends of your liquor inventory, it is essential to determine which items are thriving and which aren't doing as well. This will be critical in determining how pricing should be set and what new items ought to be procured from suppliers so that purchase orders can reflect these variables.
How often should a bar take inventory counts?
To guarantee your bar's success, it's critical to practice effective bar inventory processes and establish a comprehensive inventory scheduling plan. By persistently taking alcohol inventories and analyzing the data provided, you can rest assured that your inventory is constantly up to date - giving all customers an extraordinary experience at your bar.
Creating reliable and consistent records is essential to figure out how frequently you will take inventory. Most bars and restaurants choose bi-weekly inventory counts or even monthly counts; however, if you have the available personnel, a weekly schedule would offer the best inventory results.
To ensure your inventory management system is running at its peak capacity, try utilizing the following practices:
Conduct inventory right after the shift
Attempting to tally up your current inventory while customers are purchasing items is not only overwhelming, but it can also be highly inaccurate. Not to mention, there's a chance you'll miss recording some of the products that were sold during your counting process. This makes counting all your goods too difficult and inefficient.
However, for the items with an expiry date, such as foodstuffs and perishable ingredients, regular inspection offers the most desirable end result. To ensure optimal freshness and quality, this activity should be completed every day without fail.
Conducting inventory for weekly purchases
To guarantee that your budget stays intact, it's critical to keep precise track of the amount of inventory you have and purchases from vendors. Perpetual tracking is immensely beneficial when it comes to deciding how much stock must be ordered on a weekly basis; this method helps save time and resources in the long run.
It is essential to keep in mind that going over your stock budget will not only inflate pour costs but also reduce profits due to the high investment of money on available items. On the contrary, underspending may result in customer dissatisfaction from a lack of products and place stress on employees.
Logging daily stock updates
To remain at the forefront of the industry, you must diligently document daily inventory updates. Generating a beverage sales report using your POS system is an effortless way to track the sale of liquors. Logging when a bottle finishes (also known as "bottle kills") or cleverly storing all the empty bottles after service can help you accurately keep track of how much liquid is being used.
Consistently logging pour costs is also essential for accurate record-keeping. Through these reports, you can become aware of key metrics like: How quickly are products selling? What items have the highest profits? Is our bar yielding enough money compared to what we're buying? This practical strategy will make sure that none of your valuable bar space goes unused, especially if done correctly!
6 ways to effectively manage your liquor inventory
With the right bar inventory management techniques and access to powerful bar inventory software like Wisk, taking bar inventory can be surprisingly manageable. Thankfully, there's no need to keep any secrets; just follow these simple steps and you'll be on your way! Planning ahead and staying diligent are key components of success - here's what else you should know:
Keep track of everything!
First and foremost, keep detailed records of your starting inventory and what's going out (your ending inventory counts). A successful beverage program can make inventory control effortless, allowing you to gain insights into stock levels and sell items that would take hours of manual data entry with pen and paper.
When ordering products from vendors, it is recommended to keep a spreadsheet column of the current prices for quick reference. Doing so will ensure that you are always well-informed and up-to-date with pricing trends.
Maintain a clean storage space
Storage room organization is also an important factor when it comes to proper inventory management. Create secure bar space to maintain organized storage and label all items for efficient identification.
Create an inventory schedule
To ensure accuracy in record-keeping, a timeline should be set for regular inventory counts. This timeline will include specifics such as the duration and frequency of these inventory periods. A bi-weekly inventory period has proven to be a successful practice for many bars.
Determine your inventory usage
To acquire a thorough comprehension of what items are selling, as well as those that have lower monthly sales volume, it would be beneficial to track the inventory usage of each product. This data can be used to adjust your purchase orders or even discontinue any items that aren't moving quickly enough throughout the inventory period.
Implement controls and procedures
In bar management, accurate inventory is essential when taking inventory, and maintaining control over procedures such as stock-taking, buying, and inventory usage are critical in achieving this goal. Establishing regulations for employees to follow when it comes to these activities will help ensure a precise record of your bar's assets.
Train your bar employees
Your bar manager should designate employees and consistently provide training that equips them with the essential skills for the counting process and maintaining accurate records.
With the right instruction, your personnel can learn to use systems such as POS and liquor inventory systems in order to precisely track stock levels. By providing employees with adequate training, you will provide them assurance that all procedures related to managing liquor supply have been properly instructed. This way everyone has a thorough understanding of what must be done for optimal success!
Dare to experiment with your inventory processes
Don't be afraid to explore different inventory tactics and systems; creativity is integral in locating the most successful ways of monitoring your liquor inventory. With some effort, you can discover a perfect solution that fits your bar operation!
Pour yourself into the trial and error process and don't stop until you come up with an inventory tracking method that works for your bar business.
What are the biggest bar inventory mistakes?
Though inventory management is an important tool for any bar or restaurant, some common mistakes can be made which can have a detrimental effect on the business. A few of the most common ones are:
Neglecting to perform regular stock counts
Failure to conduct regular stock counts is a grave mistake that can severely harm bar and restaurant owners. Regular stock counting should be an integral part of bar management, done regularly in order to guarantee precise records, dodge overstocking dilemmas, and maintain up-to-date product levels. Without frequent monitoring of how much stock is available, bars and restaurants put themselves at risk of excessively ordering goods they may not need - resulting in losing too much money.
Unhealthy purchasing practices
Unhealthy purchasing practices can cause a great deal of strain on a bar's or restaurant's budget. To ensure they are getting the best value for their money, bar and restaurant owners should take time to review their financial data before placing new orders for inventory. Doing so will help them identify cost-efficient solutions that meet their needs. Buying in bulk may seem like a smart move, but if the item is perishable and too much sitting inventory, it can lead to unnecessary wastage and overall lost profits.
Underestimating the value of data analysis
Failing to track these essential analytics can be a costly mistake for any bar owner. Knowing your liquor costs is the key metric that will tell you how successful and profitable your bar is - not just in terms of sales, but also in terms of cost control and cash flow management. For example, The liquor cost, or pour cost, of any beverage is the price it takes to make each drink. At 15%, this means a fantastic 85% profit margin for every drink you serve!
The typical cost of pouring a drink in the bar industry is 18-24%, with an optimal pour cost being 20%. This means that bars should strive for an 80% gross profit from their beverages. To ensure success and prevent excessive costs, it’s essential for owners of restaurants and bars to utilize data analysis and make smart decisions about what they serve. By leveraging this valuable data, bar businesses can maximize profits while keeping expenses at bay.
Tips for conducting an inventory count
Consistent bar inventory management is an essential practice to preserve the accuracy and completeness of liquor inventory, allowing generate sales. Here are some useful tips for conducting an inventory count:
Set up a system for stock rotation
Strategic stock rotation is an effective method to arrange their bar inventory, where past-due or expiring items are placed on the front shelves of the storage room and fresher goods are stored at the rear. This system helps protect against any expired products being sold while also streamlining stock-taking processes.
Use a bar inventory spreadsheet
When starting out in the bar industry, using pen and paper inventory can be a reasonably swift solution. But if you want something more organized, a liquor inventory spreadsheet is not only easy to understand but also straightforward to use – just fill up an appealing template! While it might be a long and tedious process to initially set up the counting system, your inventory tracking process will become straightforward once you have the formatting right.
However, the disadvantage of this method is that it cannot provide you with real-time inventory data; meaning, you will have to manually enter stock information after completing each inventory count. Not only does it fail to deliver a comprehensive bar data analysis, but it also fails to meet your other requirements.
Invest in bar inventory software
Though it may require a bigger initial investment, bar inventory software like Wisk is the optimal choice for taking inventory. This is a very useful tool that offers immense convenience and accuracy with the ability to track inventory levels with POS integration, providing comprehensive data about sales performance and predicting future demand.
What selection is best for your bar?
As a bar owner, it is essential to find the ideal bar inventory system for your business. If you run a larger establishment that requires tracking numerous products, then opting for an automated software or app may be best suited for you. On the other hand, if your venue is more intimate with limited inventories, utilizing a spreadsheet can provide cost-efficiency and quickness in getting up and running. To ensure efficient and precise inventory counts, it is essential to evaluate where you could save money and time.
Watch your ROI grow as you maintain a routine of regular bar inventory assessments. By minimizing losses and maximizing profits, you're not just managing inventory; you're securing the financial health of your bar.
That's why Wisk.ai is here to help you make your bar inventory process much easier and free from too much hassle!