The Bottom Line on Beverages: 5 Steps to Price Drinks for Profit

The Bar Business Podcast

Send us a Text Message.

Ever wondered how to ensure your bar isn't just surviving, but actually thriving? Strap in for a masterclass as we unravel the secrets to menu pricing that marry competitiveness with profitability. We kick things off with a step-by-step breakdown of how to adjust your prices in response to supplier cost hikes—a timely move as we usher in the new year. Discover the formula for setting margins that keep your business booming, all while navigating the complexities of ingredient costs through practical examples. Whether you're pouring a simple beer or mixing an upscale Paloma, I'll show you how to price with precision.
Let's talk strategy. In the heart of this episode, I put on my bar business coach hat and guide you through profit-boosting solutions that hinge on meticulous product costing. It's about more than just knowing what goes into that cocktail shaker; it's about understanding every cent and its impact on your bottom line. I'll take you through the differences in making a cocktail like the Paloma across various bar settings, emphasizing the substantial effect ingredient quality has on pricing. It's a deep dive into the nitty-gritty of cost calculation, and how that forms the bedrock of a successful pricing strategy.
Wrapping up, we venture into the art of setting a final price that not only makes sense to your customers but pads your profits. Learn why rounding up can safeguard against unforeseen losses, and why keeping an eye on the competition is crucial. I'll even dish out some insider knowledge on when to bend the rules on pricing to stay ahead of the game. So, pour yourself a drink and let's raise a glass to smarter pricing and higher profits.

#####
Welcome to the Bar Business Podcast, the ultimate resource for bar owners looking to elevate their businesses to the next level. Our podcast is packed with valuable insights, expert advice, and inspiring stories from successful bar owners and industry professionals. Tune in to learn everything from how to craft the perfect cocktail menu to how to manage your staff effectively. Our mission is to help you thrive in the competitive bar industry and achieve your business goals.
Special thank you to our benchmarking data partner Starfish. Starfish works with your bookkeeping software by using AI to help you make smart data-driven decisions and maximize your profits while giving you benchmarking data to understand how you compare to the industry at large.
For more information on how to spend less time working in your bar and more time working on your bar:
The Bar Business Podcast Website
Schedule a Strategy Session
Chris' Book 'How to Make Top-Shelf Profits in the Bar Business'
Bar Business Nation Facebook Group

Chapters

1. 5 Steps for Pricing Menu Items Introduction (00:00:00)

2. Step 1: Determine your Margin (00:01:56)

3. Step 2: Know Your Product Costs (00:07:46)

4. Step 3: Determine your Theoretical Price (00:12:29)

5. Step 4: Add in Fees and Taxes (00:15:10)

6. Step 5: Determine the Final Price (00:23:24)

7. Conclusion (00:32:08)