You don’t always need to break your back in order to make more money. Sometimes, the easiest ways to increase your income are already at your fingertips, you’ve just forgotten about or ignored them.
Profiting in this fashion is more about changing your thinking than it is about manual labor, requiring courage to face people and the ability to think differently. Fortunately, neither of those requirements require much investment or sweat equity.
If you’re looking for some easy money without expending much effort, here are four ways you can achieve that goal.
1. Increase Price
Most operators are underpriced and very unaware just how impactful small increases in price can be on the finances of the business over the course of the year. Consider an increase of 25 cents per drink. If a bar does 3,000 drinks a week, that’s an additional $750 of profit above and beyond what’s already being produced. That extra $750 in profit translates to $39,000 a year without an additional dollar spend on cost of goods sold.
While these numbers make sense to most operators, many people shy away from raising prices out of fear that guests will revolt. This is more reflective of a marketing problem than what’s actually happening in reality. The truth is, most people can afford an extra 25 cents or 50 cents—or whatever you’re considering raising your prices by—per drink. And despite how harsh this sounds, the few people that complain about your price increases are probably guests you can do without.
If you’re afraid of losing guests who complain about small price increases, this shows that you aren’t investing enough in marketing and promotions. When done effectively, marketing and promotions create a new stream of guests every month. You should never be afraid of losing cheap customers.
Check this out: Increase Revenue with Tourism Boards, Part 1: Annapolis Discovered
So, look at your prices and increase them! It’s the easiest way to get a substantial increase in pay without investing any additional resources.
2. Create Synergistic Businesses
You can create businesses that either supply existing businesses, or those that can create additional transactions with existing guest. One of the ways some bar operators are doing this is opening distilleries or breweries to create their own spirits and beer in-house.
One operator I know that has more than 10 bars in their portfolio did this. They’re now supplying their own venues with their own housemade spirits and kegs of beer. Doing this keeps more profit within the company. While this route has a substantial upfront cost, that’s not the case with all synergistic businesses.
Check this out: Profits, Meet Practicality
Another bar operator I know puts just as much energy and marketing into their catering company as they do their bar. Many of the guests at the bar are business owners, and when they come in for lunch, dinner or drinks the catering service is promoted just as much as any other promotion they’re running. This ultimately results in more business that’s generated from the same customer base. Since the bar already has a full kitchen, it reduces the upfront investment and continual expenses typical of a catering company. Both businesses feed off each other and create more profit for the operator without much extra work.
3. Terminate Slugs
You can create huge efficiencies by getting rid of all the slugs employed by your business. While every team needs a handful of unambitious people who are just there to do menial (and sometimes dirty) jobs, there are some people who have a negative attitude towards work and drain the batteries of everyone around them.
Not only are such employees a waste of precious labor cost, they also sabotage all your initiatives from within your team. They’re known as “slugs” and the financial impact of firing them is huge. You can easily free up thousands and thousands of dollars in potential profit every month by auditing your team and doing an “attitude assessment.”
Check this out: How to Conduct Exit Interviews at Bars
Slugs are easy to spot as they’re usually high maintenance, call out of work often because they’re “sick,” complain about everything, and seldom show much interest in getting better at their job. Getting rid of slugs on your team is an easy way to make more money without expending any additional energy.
4. Sell Your Dead Stock
Every business has built-up inventory that’s just sitting on a shelf somewhere and gathering dust. You can make some extra money if you sell it for cost. Or, find an innovative way to sell it through a feature to your guests.
Dead stock can also be used for staff parties, staff incentives, gifts to guests, and other good purposes that would normally be an expense to you. Every operator should, at least once a year, look at their stock room and start brainstorming ideas on how to turn dead stock inventory into profit.
Check this out: Gamify Your Way to Improved Guest Engagement
Selling dead stock won’t make you rich, but it’s an easy way to add a couple extra dollars to the bank account.