By on Jul 09, 2010 with Comments 0
Setting drink prices is up to the night club owners and managers but more then not, they usually don’t know how. Many times they will learn from someone who doesn’t know either. And then, it’s gospel. They won’t even look at how it’s supposed to be done.
So here is how you need to tackle some issues on setting drink prices. First of all, the percentage of profit a club owner wants to make on their drinks is the most important issue.
Many times, a night club manager or night club owner don’t know. Many times, they will just copy the going rate or match their competition when setting drink prices. Wrong! I know what’s going through your mind right now. You are asking yourself, “isn’t there a standard that is the right way?” Well yes and no. The standard is to figure out what percentage of liquor cost you want and price everything accordingly. But the booze cost you want to work on in your place is up to you entirely.
I know, I know, you want to know what the percentage is. Well, this industry really has no set standard. Some night club owners will work on a twenty five percent liquor cost. Although many will work on a twenty percent liquor cost, or lower. And that can vary anywhere in between.
Let me give you an example. If you buy a bottle of liquor and it actually costs you seventy cents per ounce, and you are pouring a one ounce shot, you liquor cost is seventy cents. With me so far?
So you would need to charge your customer two dollars and eighty cents for that drink for you to have a twenty five percent liquor cost. For that same drink, if you wanted to work on a twenty percent liquor cost, you would need to charge your customer three dollars and fifty cents.
So as you can see, the first thing you need to do is figure out what liquor cost you want to work on when setting drink prices. Got that? Ok.
The next thing you want to do is tackle the coinage issue. There is no rhyme or reason to be dealing with misc. coinage when setting drink prices. The only coinage you should be dealing with is quarters. Period! Why you ask? It’s simple, it’s easier, faster, and less change to buy and count. Makes common sense to me.
In all the years I have spent in this industry, I only used quarters.
In some States, there is tax on liquor. And the problem is…………….?
You just charge the customer the price in a quarter increment, that includes tax.
Here’s an example. Let’s say you live in a State that has a six percent tax rate. You have figured out what you liquor cost is, so you charge someone two dollars and eighty three cents for the drink, plus tax, comes to three dollars. You just work with dollars and quarters.
This really is a no brainer!
Many people are comfortable doing this in a bar and night club setting. Some are uncomfortable with this type of drink prices in a restaurant setting. You choose. But for a bar or night club, there is nothing to think about, hands down.
When setting drink prices you can’t charge your customers your percentage of profit, per every different liquor. There are so many bottles that you would be charging a different price for every bottle! Who in the hell could remember that. And yes, a POS system can, but some things need to make a little sense too.
Now you will find that some operators will figure their booze cost on every single bottle when setting drink prices. And by doing that, you will get two hundred different prices. It would be easier to round up to “like priced” liquors. So if you have a bottle of liquor that is $19.95 and another bottle that is $20.10, why not charge the same price for both bottles using the most expensive one when setting drink prices? See what I mean? Try to make things make sense. Once you know how to start
When you look at all the different prices of liquors, they are all different but many are within fifty cents of each other. You can name these the same price.
Setting drink prices is a pain at first. After you know what your doing, it’s so easy that anyone can do it.
Let me ask you:
Do you know how to set your drink prices?
Do you know how to figure your percentage of profit?
Do you know what your booze or food costs are?
Did you set these percentages?
Did you price all of your products accordingly?
Do you know how to run you costs at the end of the week to see where you are as far as profit? As far as theft?
Well I have just written a Pricing and Percentage Guide to explain how to set prices, along with figuring your costs, percentages, and how you know what your booze and food costs are doing at the end of the week.
It is easy to understand, and finally you will be able to do all of these things to make you a more profitable operator and manager.
This new guide is mandatory in any operation, large or small. And for only $19.95, it will pay for itself many times over. Operate smart, and don’t shoot from the hip. Know what you are doing! And there is NO waiting either. This guide will be immediately accessible for you online, so you can have it in minutes. Order yours today!
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