Profits and growth are watchwords in any business. But, in the post-Covid era, these ideas are particularly relevant for bars and restaurants. Because the hospitality industry isn’t a necessity; it’s an indulgence. Now, as life continues to normalize, it’s essential to find new ways to scale for growth and increase the bottom line.
While agencies that advise individual bars and restaurants may have a broader, more generalized perspective than those who supervise an operation with multiple locations, certain core ideas exist. One of them: “Consistency, consistency, consistency,” emphasizes Sebastian Hamilton-Mudge, co-founder of the bar consultancy agency KINA along with Natalia Garcia Bourke and Andy Shannon. “You can’t grow without consistency, and if you don’t maintain a consistency of standards as you grow, you will likely not survive the expansion. There are plenty of simple ways that this manifests itself, that we’ve all experienced at some point, some of them may even seem innocuous, but their impact can compound and cause real problems for the business.”
Some of the nitty-gritty observations he mentions include:
- Don’t close early because it’s slow. “Ever journeyed to a spot that's supposed to still be open to find the doors closed? Never going back there again!” he points out.
- Are the drinks fantastic when made by one bartender or mediocre when made by another?
- Is the food excellent as long as the head chef is in the kitchen?
- And, do service and product suffer when a shift is quiet and “no one’s ‘up for it,'” or when it gets busy and everyone gets overstretched?
If you answered "yes" to any of these questions, that could be the reason that guests start saying, “The experience isn't as good since the new spot opened.” And those negative observations will directly affect your financials.
Hamilton-Mudge stresses that it’s the nuts and bolts like those above—as well as the details like keeping track of stock, accounting for tax bills and utility costs—that, more often than not, lead to an operation’s success or failure. Just because you work in a fun, dynamic, creative environment, you should never forget that you are running a business.
Lauren Barash, VP of Branding Marketing at Full Course, which incubates and grows restaurant brands, talks a lot about optimization. She says optimizing your business requires vigilance in order to ensure “operational consistency, ease of execution, speed of service, portion controls, standardization of recipe builds, and visual job aids using good data points to understand your product mix as it relates to your daily production, costing, inventory, etc. from revenues.”
By keeping pace with these key factors, you start seeing the successes and the failures. Frequent menu analysis lets you track the profitability and popularity of menu items. You should ask yourself: Which items should you get rid of, which should you spotlight, and which could be tinkered with to succeed. Of the tinkering, Barash says, “Re-engineering can include evaluating ingredients, processes [like] labor, and equipment to maximize the penny profit of each product you serve.” Because in business, every penny counts.
While Hamilton-Mudge’s keyword is “consistency” and Barash’s is “optimization,” Voodoo Brewing’s CMO Tony Lang finds that everything begins with “customer segments.” The Voodoo brand has specific challenges given that its primary focus is beer. “In our business, we have the hardcore craft beer lovers,” explains Lang, “who are obvious customers for us, but that is a limited and not a fast-growing audience.”
To expand their business, Voodoo now offers craft cocktails, pub-style appetizers and entrees, and lighter beer options. Lang also invokes the word "consistency," especially when scaling up a business; it’s essential to ensure that your product is consistent across every location.
The decision to introduce craft cocktails was a risk that paid off. “Cocktail flights are a concept that worked way better than we ever expected," says Lang. "A beer flight at a brewery is table stakes, but a cocktail flight was an interesting offering that we figured we would try, such as a margarita or mule done five or six different ways, with vibrant colors and flavors that are unique.” By educating the die-hard beer drinkers and touting the new offering to all its customers, Voodoo saw a solid uptick in their bottom line.
Voodoo’s cocktail flights perfectly illustrate Barash’s advice to “try new things and think outside the box… being open minded is crucial, and sabotaging a new process, product, piece of equipment, etc. because we are stuck in the thought process of ‘this is the way we have always done it’ can quickly become the downfall of a business.”
Voodoo Brewing's cocktail flights at a beer brewery were a risk that paid off.
Of course, experimentation doesn’t always work. Hamilton-Mudge cautions that sometimes "you can push too far ahead of trends before the guests are ready to go there with you.” He knows this from personal experience. Years ago, when he opened a bar, he served some of the cocktails in jam jars. This was long before the concept of mason or jam jar “glassware” was not only in vogue, but also completely normal. As a result, the guests didn’t know what to make of the unconventional presentation. Sometimes, you can actually be too far ahead of the curve or simply take a risk that fails.
Lang recalls a situation that follows the latter observation. Voodoo offered a ticketed dinner event for Valentine’s Day and heavily marketed it only to see that the returns were roughly on par with the prior week’s business—not higher as expected. The lesson he says was that “there are some holidays that are hard to win as a brewery, such as Valentine's Day and Cinco De Mayo, which are dominated by fine dining and Mexican restaurants respectively. The pivot was to instead ensure that we put a stake in the ground for our own 'event' and just build it from scratch.”
While being focused on consistency, optimization, and experimentation in pursuit of profit is essential, you also need to recognize the crucial contribution your staff makes to your bottom line. Whether it’s a bar or a restaurant, Hamilton-Mudge notes that, in order to ensure a successful guest experience and, in turn, the longevity of your brand, you have to start with your team. A house is only as strong as its foundation, and that is exactly what your staff is.
Training your employees in the bar’s day-to-day operations, as well as standard operating procedures, is crucial. But educating your staff on how to do their work isn’t enough. “Teaching the ‘why’ is where outstanding culture is built,” says Hamilton-Mudge, “and how an employee at any level can begin to use those ‘steps’ and navigate more complex moments that are not written in manuals.”
By cultivating your team’s investment in the company, listening to their feedback, and offering guidance, you will give your employees value, which can lead to employee retention and higher performance. It also helps develop future leaders, which is key when and if you decide to expand.
Consistency. Optimization. Customer segments. All of these by-words matter when looking at profit, scaling, and the general health of a business. If quality drops, service falls short, or the “magic” people experienced when the spot first opened fails, it can spell the end of the brand.
Hamilton-Mudge sums it up by saying, “Focus on building systems and culture. Systems and processes may seem the less glamorous side of hospitality compared to the fun of aesthetics, music, or concept. However, get them right and the service and guest experience is far improved, consistency is maintained, and you build a loyal customer base and a healthy business.”
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