We know there's more to running your business than getting creative with cocktail recipes and keeping up with trends. At the end of the day, even if you have the coolest drinks and the latest delivery services, if you aren't selling your drinks at the right price, you're going to have a bit of a headache. If you charge too much, customers will be put off from buying. If you charge too little, you decrease your profit margin, and may lose money in the long run. Because of this, we wanted to share some tools that will help you calculate an appropriate cost for your drink and calculate the pour cost percentage on your existing menu. Read on to explore these calculators.
- A lower pour percentage means a higher menu price, which is suggested for novelty drinks that will appeal to a smaller demographic (less product value per dollar spent for the customer).
- A higher pour percentage means a lower menu price, which is generally suggested for staple drinks that appeal to a larger demographic (high product value per dollar spent for the customer). The suggested range for this is between 24%-18%.
"Enter your values in the white boxes — and you will see the numbers change [...] Don’t mess with the peach colored boxes, because that is where [the formulas are]. If the formula does get messed up, just refresh your page and it will go back to how it is suppose to be."
"My guests need to feel like they’re getting their money’s worth when they’re spending it at my bar. My restaurant needs to make a certain margin in order to pay purveyors, sign payroll, and maintain bills. The beauty of my job lies in that place in between, where guests are happy and the business is healthy. That place in between is where a successful bar lives.
There is some simple math involved with pricing a cocktail. At the core, all you need to do is figure out how much the drink costs to make, and multiply by your targeted pour cost (if you’re unsure what this is, ask your boss or bookkeeper; the industry standard usually lies somewhere between 18% and 24%). It’s that easy, but it can get a little tricky sometimes. And so… Download Cocktail Cost Calculator Here."
*We found this calculator is best used for mixed drinks.
For more ways to increase your profit margins, read our recent article about how to implement a wine by the glass program at your business.