Managing your bar business

Hbar

M.Aldana

Managing Your Bar Business

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• To succeed in the face of tough

competition, you must analyze what your

guests want and what your establishment

means to them.

• The Business Plan – the resume of your

business

Creating a Business Plan

• Should serve as your basic operating tool

• Should be useful for communicating

exactly who and what you are

• Should be useful in obtaining financing

Business PlanA Good Business Plan should:

• If you are not much of a writer, you can

hire a freelancer to spend hours

organizing, editing and making all of the

plan components fit together.

Business Plan

• As an operating tool, a business plan

should answer the following questions:

– Where are we now?

– Where do we want to be next year?

– Where do we want to be two or three years

from now?

– How are we going to get there?

Business Plan

• Requires a detailed description of the

physical structure and its neighborhood

location.

• Factors worth including are traffic in the

area (car and foot), zoning, accesibility,

parking, and crime.

Location Analysis

• This is a comparison of your operation’s

actual (or anticipated) performance

against similar types of businesses.

• This forces you to figure out the activities,

strategies, and strengths of your

competition, and to decide how effective

they are.

Competitor Analysis

• Strengths, Weaknesses, Opportunities

and Threats

• The first two are internal: factors that you

can control.

• The other two are external: factors that

you can notice and react to.

SWOT Analysis

• The real objectives of this analysis are to

identify weakness and turn them into

strengths and to identify threats in order to

turn them into opportunities.

• You might also notice that your

weaknesses are your competitors’

strengths and vice versa.

Business Plan

• Lack of follow-through

– If you cannot translate ideas into action, you

are “running on empty”

Reasons why some business plans fail:

• Much talk, minimal resources

– The implementation of your goals requires

you to continually scale back and perhaps

even to eliminate portions of the plan.


• Procrastination

– Quick decisive action is often necessary to

take advantage of a business opportunity.

– Think it over, but don’t think too long.

– Delays often include throwing roadblocks in

your way and hoping a negative trend or

persistent problem will disappear or right

itself.


• Refining an idea endlessly

– One way to ensure that nothing happens is to

scrutinize portions of the plan forever.


• Focusing on the buy-in

– This means getting everyone’s opinion before

acting.

– The idea of listening to other’s viewpoints is

valid – but not if it is used to avoid taking

action


• Lack of vision

– Your bar must have a life, a feeling, a vision,

and an attitude – that’s how you connect with

your guests.

– Without these attributes, there is no reason

why guests would prefer your bar to a

competitor’s.


What is My Bar Worth?

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• It’s a source of income, the culmination of

hard work, a home a way from home, a

family legacy, or a retirement fund, etc.

A Bar’s Worth

• Two ways to valuate:

– Business valuation

– Business appraisal

A Bar’s Worth

• Appraisal is a procedure used to determine the value of something tangible or physical.

• Valuation analyzes both tangible and intangible aspects of the company: the industry in general, the state of the economy, the company’s historical performance and projections, the company’s customer base, proprietary rights, management structure, strengths and weaknesses of the business, government licenses or regulations that affect the business.

A Bar’s Worth

• Business valuation also involves adjusting the assets of the business to reflect its fair-market value.

• Fair market value is the price that a business could expect to bring if it were put up for sale under the current conditions for a reasonable time period, assuming that both the buyer and the seller were informed and neither was acting under pressure to but or sell, respectively.

A Bar’s Worth

• Investment value – used to determine

what a business is worth to a potential

investor, taking into consideration

whatever assets the investors bring to the

table.

A Bar’s Worth

• Liquidation Value – most often

associated with bankruptcies and

foreclosures.

– It is how much the business’ physical assets

would sell for at an auction, which is a fraction

of their original worth.

A Bar’s Worth

• Intrinsic Value – worth based on a

perceived future outcome. Determining the

value is a very hard task, and it is the type

of value that is most difficult to quantify

and justify.

A Bar’s Worth

Marketing a Bar Business

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• Define your market

– Market segment is a more or less

homogenous subgroup of the total consumer

market; its members have similar needs and

wants, attitudes, lifestyles, income levels,

purchasing patterns, and so on.

Marketing PlanSteps:

• Determine which products and services

this market segment wants to buy.


• Shape everything about your enterprise

to attract customers and sell the product

at a profit.


• Positioning involves two elements:

– Customers

– Competitors

Positioning Your Business

• The success of your bar will depend to a

large degree on your ability to know your

customers.

• Knowing your customers means keeping a

watchful eye on the types of people who

visit your establishment.

The Patron

• Is the moment of truth when a guest and

server first converse and strike up a

relationship, however temporary.

• In this moment, the server represents the

entire bar and can make or break a

customer’s experience.

Service Encounter

• Involves getting the drink ordered,

produced, and delivered to the customer,

is part of the service encounter.

Delivery System

• Also called the landscape, refers to the

environment in which the service

encounter takes place.

Service Scape

• “the product itself affects the guest

experience”

• The experience includes whether the bar

carries, and the bartender can make, what

the guest wants; the presentation, portion

size, and price of the product; and whether

it is attractive at a fair value.

• Primary – those bars with concepts similar

to yours

• Secondary – those bars that could be

considered competition simply because

they are located near your proposed site.

Competitors

• Location

• Accessibility

• Visibility

• Appearance

The CompetitionPhysical Attributes

• Menus and drink list

• Prices

• Foodservice

• Atmosphere

• Special characteristics

The CompetitionAmbiance Attributes

The Atmosphere

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• Is a subjective impression based on

something unique or memorable about

your place.

• Image is the element that you will

emphasize in promotions, advertising and

on-site merchandising.

Image

• Is the overall impression you want to

create

• They have to do with what is seen, heard,

touched, and tasted – the total sensory

impressions

Ambiance

• Ambiance may well be the most influential

part of the customer experience, and it is

likely to make impact immediately.

Ambiance

• Human factors include service

components: speed, accuracy,

friendliness, product knowledge, and even

the server’s appearance.

Other Factors

• Decor creates the first impression; comfort

has a slower but no less significant impact.

• Lighting is also both decor and comfort

• Temperature is not important to the

customer until it is too hot or too cold

• Noise level is another comfort factor that

you can control according to customer

tastes.

Decor, Comfort and Service

• “Sight and sound provide the first

impression, but human encounters provide

second and most lasting.”

• Achieving customer satisfaction does not happen by itself. It depends on selecting friendly, people-oriented staff members and training them thoroughly in you products, serving routines, customer relations, and philosophy of service.

• Customer satisfaction also depends on your own performance with people, both your own personal impact and the model you set for employees.

• Another human ingredient of atmosphere

is the customer. If you focus your

marketing efforts on attracting a certain

clientele, you will have a compatible mix,

and people will feel comfortable from the

beginning, ready to enjoy their experience.

• What you serve says as much about as

how the room looks.

• More and more bars are replacing chips,

popcorns and pretzels with real food and

charging for it.

Bar Food and Snacks

• Raising the quality of the food you offer,

even if the menu is limited, has several

important effects:

– It adds to the enjoyment of the drinks

– It prompts people to spend a bit more time

and money

– It slows the absorption of alcohol into the

guest’s system

– Making the cocktail drinking experience safer.

Bar Food and Snacks

• An attractive menu is fully capable of

prompting one more round of cocktails or

by the glass wines at tables.

Bar Food and Snacks

• Understand your limitations

– Consider how big and/or sophisticated the

kitchen is.

When deciding how extensiveYour bar menu should be:

• Set hours, at least for serving hot food

– If the menu is more extensive than simple

snacks, be sure that any printed menu lists

the hours that the food will be available.


• Restaurant/bar combinations should

function as a team

– The kitchen staff must view the bar menu as

an integral part of the operation, not just

another element that slows down the main

event meals in the dining area.


• Be willing to update the menu regularly

– If you have daily or weekly drink specials, do

the same for food items.


• Merchandise drinks and foods together

– Pair signature cocktails with foods


• Word of Mouth

– By far the most effective marketing vehicle

– That is – people telling people about your

place

Marketing ToolsTo Attract Customers

• Word of Mouth

– Raises then stakes of customer service –

since problems and missteps as well as

praises can be instantly tweeted or posted on

someone’s wall.

– If information about your bar is going to “go

viral” it had better be good news


• New, Reviews and Feature Stories

– A story in the newspaper, on radio, or on

television can reach people and increase

awareness of those who have already heard

about you.

– The only cost is time and effort or what you

might pay someone else to write a news

release.


• Personal Contact

– Asking people you know to bring in people

they know

– Encourage your customers to bring in other

customers

– Organize games or contests centered on their

interests


• Promotional Event

– Choose a charitable cause or civic group and

donate a portion of profits.

– Every promotion must be planned, budgeted,

fairly priced, and to the extent that is possible

in advanced, rehearsed.


• Ask for it

• Provide a questionnaire

• Hire mystery shoppers

• Employee feedback

Checking Your Progress

• Happy Hour

• Bundling – packaging two or more items

together and selling them at a set price

• Prix fixe – different items paired up and

served at a discount

Pricing as a Promotional Tool

• Trademark – the legal process of

registering a name to give you exclusive

rights to use it.

• Copyrights – protect original works of

authorship, fixed in any tangible medium

or expression

Protecting and Expanding your

Concept

THANK YOU!

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Managing your bar business

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