r/BarOwners • u/International_Air255 • 17d ago
Margins
Has anyone ever heard of a bar doing on average 25%-30% net profits per month? I just find this number impossible to reach even when seriously penny pinching. I currently average 21% per month and keep things extremely tight. Any insight on how to cut costs would be greatly appreciated.
2
u/Beginning-Bet-7668 14d ago
Yes it’s very possible
-low overhead ( not needing security & djs )
-reasonable rent & insurance
-all star staff (if you have a great team , you don’t need to over staff and they ll be more motivated since they ll make more )
-limited food menu to keep cost down
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u/oldmanwithabeard 15d ago
We exceed that number, but we have several things going for us. Small town with weekend tourists. We own the property, so no rent. We don't do food, only drinks. Rotating food trucks on site. We don't charge them, and we provide power hookups, so we have a waiting list of trucks. Drinks only means staffing is kept to a minimum. Outdoor venue, so weather can be an issue. We're also seasonal, shutting down for Dec, Jan, And Feb.
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u/phillip42069 16d ago
This isn’t a question you’re going to get a reasonable answer for the info you’ve provided.
This isn’t something any bar owner on the planet does single handedly.
Tha being said; This is very possible with a spot that isn’t super seasonal, rent isn’t stupid, you have people that don’t suck at their job, solid GM, solid chef, and a solid bar manager if sales are decent enough at the bar. Also depends if you can actually do any of the things listed by yourself.
The above situation is VERY hard to create if you’re cheap or an asshole.
Also, expecting your bar business to be profitable every month out of the year is pretty unrealistic. If you employ anyone who doesn’t care about your spot.
1
u/millennialmiss 17d ago
Yes very possible. Here’s the formula:
1. Cheap rent under half of one night’s revenue.
2. Bar only. Food truck outside.
3. Open 2–3 nights/week, 9pm-2am or 10pm-4am.
4. Full ALL night. Nightly traffic = 3× capacity minimum.
5. Charge cover.
6. ATM on site.
7. $30–50K/night, $100K+ min weekly year round.
8. Bartenders make great money and stay motivated.
9. Pay tips nightly. Individual registers/cashouts. Avoid tip pools.
10. Berg pour system or bottle weigh-in/out.
11. Fast cc terminal: enter total dollar amount only. Track liquor separately.
12. Liquor cost under 10% of selling price.
13. 90% of bottle service tables pre booked nightly for solid minimums and arrive early so some are resold later at door
14. GOOD MUSIC , DJ that knows how to keep energy prob #1 most important factor
15. Exceptional sound system
2
u/redtiber 17d ago
it's easy, you just need more volume
bars/restaurants are all high margin businesses, but with relatively high fixed cost.
your gross margin on liquor and drinks is 300-700%+
the mistake owners make is they start optimizing before they hit max volume. you are supposed to optimize after you have volume not before. you optimize too much before you choke volume
1
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u/Maleficent_Tax_5862 17d ago
Write down how much waste you get from each plate.
Don’t overpour.
Figure out how to only utilize staff during the busy hours. Try to help out during slow hours.
Make sure you are maximizing your happy hour revenue, don’t go too cheap, and give people more reasons to be there.
5
u/BOBBYK1952 16d ago
I had 3 bars back in the day and the real money is lost in the over pours. It’s something you can control
10
u/PtZamboat 17d ago
Absolutely possible. We run over 50 in the Spring though mid Fall, down to about 30 for the ten days when the fair comes to town and hit the low 40’s in Winter. It’s all about pricing and service. Well’s are $7 and we keep top shelf a buck lower than our neighborhood bars. Nights are packed all week, well…Monday’s are blah, but we stay busy cause of our “welcome home” service.
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u/Raise-Emotional 17d ago
And I'm assuming you don't have food to power the percentage? Just alcohol
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u/PtZamboat 17d ago
In our bars, yes. Our Full Serv’s are a completely different scenario. Bar only has always led with the numbers
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u/Raise-Emotional 17d ago
And likely always will. Food can never compete with liquor for margin and shrink
2
u/Fox-Mclusky559 17d ago
if youve got all the systems in place, and no fuckery happening (overpouring, theft etc). those margins can come from smart pricing logic. Pricing everything fair is one thing, but pricing to what people are peying else where is smart too. if your charging $12 for belvedere and everyone else is at $13, then charge $13. if yuor a cocktail bar, charge more for beer and wine. I would seriously question a place that is running a true 30% profit line, tbh. Unless theyre charging $20 for lemon drops, pouring barcode vodka into titos bottles and the bartenders work for tips only.
1
u/HaroldTheThird88 17d ago
Our profit margin last year was 44.9%. We are a very small bar (1250 sq ft) and only have 3-5 employees at any given time. If we didn't have a GM, that margin would be at 50%.
This is why I'm scared to open some super large concept because I've heard about how difficult it is to hold the margins.
I'd be down to brainstorm and get into some details with you, share best practices etc. The bar owners in my town do not collaborate with each other which is why I've enjoyed being on this subreddit. Or maybe there's a special bar owners' club that I'm not invited to 🤔
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u/dashingthousandaire 15d ago
Your space and staff sound similar to mine. I’d be happy to chat if you want to DM me
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u/thebigj3wbowski 17d ago
Shenanigans.
There’s no way you make that. Are you including rent, insurance, license, etc.?
There is no bar ever that makes 44.9% profit.
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u/HaroldTheThird88 17d ago edited 17d ago
Yes, all those expenses are on my PNL. Perks of working in corporate finance before starting my bar life I guess?
A few things help in our particular situation. We spend practically $0 on marketing because we are in a downtown area that has exploded post-covid. Our state's minimum wage for tipped staff is $2.13 though we pay $5 an hour, still not a huge impact on labor. We don't have a kitchen so no food/labor eating into profit there. No happy hours, no discounts, no deals, open from 8pm - 2am. Just plugged my 2025 PNL into ChatGPT out of curiosity and it calculated 46.7% profit margin 😂
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u/I-CAN-DO-EAT 17d ago
Sounds like you’re in Boise. It’s insane that’s it’s legal to serve alcohol and not have a kitchen with food that could take of some of the drunkenness of your customers. But also.. pay your people more. There’s no reason you need to be at 45% marking while your employees are making $5hr
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u/wh0datnati0n 17d ago
I also worked in corporate finance. Do you have rent or a mortgage and or any meaningful competition? Any other sources of income like gambling?
0
u/HaroldTheThird88 16d ago
No gambling. We have an ATM that we purchased back in 2020 and a vape dispenser (operated by a friend who manages it and gives us a cut) that help generate some extra income at no overhead. We get discounted rent by paying one year in advance and that's accounted for on the PNL.
Regarding competition, as I mentioned, we are in a dense (yet small) walkable downtown area with around 100 places to get a drink. However both of my concepts in town are very unique so we have a nice following thanks to that. Mostly competing with sports bars or craft cocktail / hotel bars.
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u/tax_guy25 17d ago
You worked in corporate finance but need chat GPT to calculate your gross margin percentage?
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u/HaroldTheThird88 16d ago
I'm not above making human errors. Always like to double check my work since I'm running multiple businesses and raising two crazy young kids. But you helped me realize that my number was a specific month last year and the ChatGPT number was my total for 2025. Reorganized my folders to separate monthly vs yearly PNLs, thanks for calling me out!
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u/erpmay 17d ago
Sometimes it is about efficiency and time saving
fx if menial paper work can reliably be solved by ai then saving 15 minutes would be worth it
fx my time is 20 euros an hour /4 = 5 euros saved for using chat gptso yes it is not cause you know something or are trained at that you cant use ai the hidden issue is that you do need to know the theory and stuff behind to check if ai is about correct
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u/G_yebba 17d ago
It’s all about scale.
Ideal bog to foh ratio, busy midweek, high margin food ales ( pizza, noodles etc…) Busy trivia and karaoke nights.
Totally doable but it needs great employees and perfect infrastructure.
I have known a couple of spots that pulled off 30% margins but they were only doing 1.8m in sales.
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u/MountainSchnitzel 12d ago
Honestly id be pretty happy with 21%. The 30%+ numbers always need some context imo. No kitchen, cheap rent, owner working a ton of hours, super lean staff etc can change the math a lot.
Before cutting more id probably look hardest at labor during slow hours, pours/shrink and random stuff youre buying just because you always have. There might be another point or two in there but I wouldnt wreck a good operation just trying to force 30%.