Business Math for Managers

Being able to successfully manage and grow a restaurant or bar requires business math. It is very surprising how many hospitality managers are not familiar with basic math that is required to profitably run a business. I cannot count the amount of times that I have asked a bar manager what margin or markup they work on and they have no clue. Understating the principles of business math can help you properly manage an enterprise and deliver results with numerical backing. I have laid out the three basic formulas that ever bar or restaurant operator should know in order to properly manager their establishment. The Margin, Markup and pour cost are vital to anyone dealing with food and beverage.

BUSINESS MATH FORMULAS

  • Margin: A profit as a percentage of the selling price.
    • Margin = PTC – PTR / PTC
    • PTR = PTC x (1-Margin)
    • PTC = PTR / (1-Margin)
  • Markup: A profit as a percentage of the cost.
    • Markup: PTC – PTR / PTR
    • PTR / Cost = Selling Price / 1+Mark Up
    • PTC = PTR x (1+Markup)
  • Pour Cost: The percentage of the selling Price that is cost.
    • Pour Cost: PTR / PTC
    • PTR = Pour Cost x PTC Price
    • PTC = Cost / Pour Cost

WORD KEY:

  • PTR = Price to Retailer
  • PTC = Price to Consumer

I don’t care what it cost, I care what it’s worth.

Strategic Beverages Sales

As a beverage supplier understanding your retailer’s goals, strategies & tactics is an important aspect of building a strong and successful partnership. The goal should be a desired result or specific measurable achievement for your brand. Build your strategy for your accounts or distributor by following these 5 steps.

5 Steps to Selling Beverage

  1. Identify the buyer influencer Types
    1. I.C.E: Decision Maker, Influencer, Coach, End User
  2. Identify the degree of influence for each of your buyer types
    1. High – Medium – Low
  3. Identify red flags and where you can leverage strength
    1. Reassess your situation and identify trouble before it finds you
  4. Identify the buyer response modes
    1. Growth mode, Trouble mode, even keel mode, overconfident mode
  5. Identify and prepare individual win/results statements for each of your buyer types
    1. Results – Corporate goals that are tangible and measurable
    2. Wins – Personal goals that are intangible

You have to strategies or plan to bring out a desired future objective for your sales call.

Affability of a natural born salesman.

Well-Served Libation

Proper pouring techniques can make or break an experience at a restaurant or bar. Beverage is not always fussy but if the proper steps aren’t taken a beautiful bottle of rare and pricey wine can seem like an unmemorable experience. Beverage has a generous spirit, so if you make a small effort, it will reward you with a rich and memorable experience.

Checklist for Well Served Drink

  1. Beverage at proper temperature, think cold beer and hot coffee as rule of thumb
  2. Correct glass wear for type of drink and occasion, think beer mug vs. wine glass
  3. Proper pour technique, pouring draft beer vs. strained cocktail
  4. Clean and properly rinsed bar tools at all times as a prerequisite
  5. Proper expectation of customer. Explain drink if the drinker has never tried what you are serving them.

If you stick to these basic principles of beverage service you will be rewarded by higher customer experience and usually higher gratuity averages. Sure you can grab a beer or wine, open it and place it on a table, but if you take the proper time present it beautifully the guest experience can be magnified. Understanding the mood, cuisine type, occasion, holiday, or even things like weather can help any bartender cater there beverage recommendations to a patron. Have fun with it and always remember that a little effort goes a long way.

Experiences are today’s social currency.

Do you know BEER?

Despite beer being the most consumed alcoholic beverage in the world, it’s surprising how little most people know about it. For lot beer consumers even the most basic concepts and ingredients are unknown or fuzzy at best. While a group of beer geeks and even those that are beer enthusiast, understanding what ingredients and processes brewers are using is becoming more and more publicly available. Beer is complicated beverage that many say is more intricate then wine itself. I am not going to go into depth on brewing techniques but I am going to discuss the basics of what makes beer, beer.

To understand beer you have to study the ingredients that are in a beer. There are manly three ingredients that make almost every beer. The first water, Beer is mostly water and an important factor of the final taste of the beer. Water minerals being more flavors to beer, the ions are chemically active and have an important effect on the brewing process. The second is barley, or malted barley. It is the perfect grain for brewing because of its large reserve of starch and a husk that makes it a perfect natural filter. There are two types of Barley, the least expensive six row hops and the more attractive two row hop. After kilning, malts can give the beer its roasted flavors, sweetness and color. Lastly there are hops, which come in hundreds of varieties from all over the world. Hops offer bitterness and different aromas and flavors like grapefruit and citrus to the beer. And did I mention it acts like a natural preservative.

Suds!

Food and Drink Pairing

When seeking a good beverage and food pairing, the range of flavors, aromas, colors, and textures all complement food in different ways. To understand how to pair your foods with different, soft drinks, beer, spirits or wines you have to be able to understand the elements that drive their flavors. Beverage and food transform each other unlike any other two things in the world, like Bonnie and Clyde, they were meant for each other.

The most important rule in my opinion in pairing is that there are no wrong answers both there are some guidelines that can help you choose what you like. These three principles can help any novice or master chef with pairing the perfect beverage with their meal.

  1. Match strength with Strength: Delicate dishes work great with delicate beverages and strong dishes works wonderful with assertive drinks. Matching intensity and subtleness of food and drinks can go a long way to not overpower the other and work in harmony.
  2. Find Harmonies: Combinations work best they have common flavor or aroma profile. It is important to consider both the food ingredients and the method of preparation. For example, roasted meat items can go well with dark roasts beer and fresh lemon baked fish could go well with a citrus based cocktail.
  3. Consider Contrast Element: Sweetness, carbonation, bitterness, heat, spiciness, are qualities of food and drinks that can interact with each other in specific and predictable ways. Pairing a spicy dish to a sweet drink can help contrast and pairing a fatty dish with a highball can help cut the fat.

Deconstruct your Drink

Ever thought what’s in your drink that makes it look, smell, and taste the way it does? Every sensation found in a glass of beverage has its origins made during the manufacture of the wine, beer or spirit. It is the bartender or mixologist that converts those profiles into a distinct and balanced drink. To understand your beverage, you have to analyze it. So here is a guide to deconstructing your drink:

Aroma: Derived from ingredients within the cocktail, wine, beer, etc

Head: From the medium-length proteins present in malt, such as wheat, oats, and rye as well as shaken cocktail.

Color: From ingredient skin, malting, aging or kilning process.

Carbonation: Carbon Dioxide (Co2) gas, a byproduct of fermentation by yeast.

Body and Mouthfeel: Proteins from ingredients. Think consistency of water vs Guinness.

Flavor: Derived from All the aspect of brewing or distilled spirits along with any ingredients added to cocktail, beer or wine.

Alcohol: More ferment-able material or sugar means more alcohol, along with everything else.

How do you Coffee?

COFFEE? It is so synonymous with our everyday lives that the word itself has can used in the form of a question, a mood or attitude towards your day. For most of us it is the first thing that we consume when we wake up in the morning and drink throughout the day as needed. The obsession of coffee was evident by the rapid expansion and domination of beverage by the Starbucks Company. There are literally catty corner Starbucks on nearly every metropolitan street in the United States.

Is American addicted to this beautiful brewed drink prepared from roasted coffee beans, which are the seeds of berries from the coffea plant? I believe so! Coffee has become as much of our popular culture in our daily lives as the internet. Since the early days of import coffee has dominated the shipping and agricultural landscape, today it is the largest exported agricultural product in the world. Coffee is native to tropical Africa, Madagascar, the Comoros, Mauritis, and Reunion in the Indian Ocean yet it is harvested all around the world because of how lucrative the crop is.

Coffee has transformed over the years and the use of highly sophisticated machines, cold brews, steeping machines has elevated the flavor profile of coffee. Local and regional coffee roasters have emerged and communities of coffee aficionados have given way to the barista at Starbucks who was working part time for some extra beer money. I highly encourage you to indulge and seek out some artisanal coffee roasters and brewers to understand how the true beauty of this magical bean is supposed to be used.

No rest for the wicked.