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You are here: Experts > Business > Small Business: UK > Running a Restaurant > liquor costs
Expert: Stuart Mullis - 10/28/2009
Question
Hi Stuart,
I own a small 10 stool bar and 65 seat restaurant in a very busy town in Morristown NJ. I am currently going over my liqour costs and would like to know what the average cost I should run for Martini's, Draft beer, bottle beer, and wine respectively. I have a good handle on the mixed drinks. Thank you.
Answer
Good Morning Todd
As you know there are many variables in the battle to correctly/ cost/price your liquor. Liquor prices are so different all over the states, primarily because of local-state taxes..
So I am going to give you my general thoughts on your question
Martini's should be your best money maker cost should be in a range of 19-22%
Beer will be one of your worst, so much waste involved with beer and such a difference in cost of draft vs bottles, unless you are able to buy in very large volume 24-28%
And wine depends greatly on whether you sell my glass by bottle, or bulk wine or all of the above. Bought correctly this can be a winner 21-26 %
Some other thoughts:
The most influential thing in pricing for a bar is competition..and the need for profit.
Check out who you think is/or will be your main competition, get their pricing, happy hour specials , promotions etc. Then sit down with the liquor and beer suppliers, they should know the local market like the back of their hand, and they will know who is successful with what promotions. They also have many many valuable tools in cost evaluation of their products. This is free info, so work them hard.
Our Beverage Cost goal was 25%or less. PS we did a complete bar inventory EVERY day, we counted EVERYTHING every day. It made us a lot of money and kept us neat and organized, if you skip a day it shoots this system to pieces.
There is one key that I will give you, never allow employees to throw away empties, verify them the next day against what your numbers show you.If employees make it out to be a great pain, they know that you are taking control. After all you are paying them.
We stocked items by suppliers so that when we took inventory, we were able to compile our orders at the same time.
We always wanted our total cost of beverage service to be 25% or less of total beverage sales.
The make up of that cost will really depend on the type bar/restaurant/nightclub that you have, for example a sports bar with lots of beer sales would be totally different say from a Martini Bar.
We did not include Juices sodas and lime etc in our cost, instead they were in a category of Bar supplies along with napkins straws etc.
Hope all this helps, simple question, but complicated answer..
Best of luck to you, and pour me a Makers Mark with a splash of water
Stuart
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