There is no question that liquor sales are the Holy Grail of the restaurant business. The profitability is unparalleled, but so is the liability. And although a mismanaged bar can cost you more from the bottom line than most cost centers, it is often the last area to get the management attention it deserves.

It all starts with good inventory and purchasing controls that are consistent (weekly) and documented. Understanding your true cost of goods, which is usage plus purchases, is often overlooked by operators. Setting pars and minimizing inventory sitting on your shelves is just as important. No accountant wants to see a large liquor inventory sitting on the balance sheet, it’s a liability and a waste of cash flow. There are many software solutions that exist today to help you manage your beverage inventories, some are more complicated than others, so make sure to find the right fit for your operation.

Menu development and pricing will drive your purchasing decisions, so set clear targets for your cost of goods when developing beverage recipes. Do not pull your beverage pricing out of thin air! Make relationships with your vendors and develop programs that reward you with discounted case pricing. If you’re going to develop a focused beverage program, make sure you are prepped and stocked for it. The keys to creating a successful cocktail program include keeping production time to a minimum, catering to your clientele, staying on top of trends, monitoring your sales mix and of course, staff input and guest feedback.

A good bartender can create more guest loyalty than anyone else on your staff so it’s important to educate, motivate and support them. Training is also vital and should be an ongoing process. Your staff needs to understand the expectations and be trained on not only the “how” but also the “why”. For example, the bartender needs to measure pours not only for cost controls but for consistency. Create an environment where the staff takes pride in the crafting of beverages by involving them in menu development, encouraging creativity and getting their feedback. The take away here is to not ignore your people, especially the ones driving your bar program.

A final thought to keep in mind, the bar is the only revenue center in the house where the product is purchased and produced by the same individual. This creates an additional level of liability that requires added controls and measures. Make sure to have tight cash controls and policies in place at your bar and enforce them daily to ensure accountability and compliance.