The owner of a small pub, he had struggled to reduce his liquor losses as his revenue leaked out silently. “I’ve lost a tremendous amount of revenue to theft,” he said. He thought he could gain control with pure effort, implementing a strenuous manual inventory process that served as a rudimentary check on his shrinkage. But nothing worked.
Until he bought AccuBar. Since putting in the Palm-based inventory system, Gilligan’s liquor inventory costs have dropped as much as 50%, and theft is almost nonexistent. “This system has kept my staff honest; it’s that simple,” he said. “It’s a major deterrent to theft.”
Controlling bar costs is a daunting challenge for many bar owners, but for a small operation like Gilligan’s Pub, it can be particularly delicate. In a place like Gilligan’s, which seats about 50 people max, an owner tends to get closer to his staff members than a simple employer-employee relationship, he points out. “Before you start making accusations to staff concerning theft, being sure of your figures is paramount.” AccuBar gave him the fast, accurate facts he needed, and he used them to conduct the staff meeting that may have saved his pub.
Gilligan rounded up his five bartenders and showed them exactly what they were in for with AccuBar on board. “That week 4 bartenders resigned,” he said. “All of them we considered friends. Just showing them the results of the old way of doing inventory and the new way of doing inventory was enough to scare them off. Because there are no errors with this system, it takes away all doubt in your results, leaving those responsible to explain their actions.”
AccuBar employs a Palm-type computer with a barcode scanner to greatly simplify and speed up the inventory process, from receiving and reordering to banquets and transfers. The sophisticated software allows users to pinpoint and reduce the pervasive losses that are a major factor in the high failure rate of hospitality businesses.
It’s no secret that beverage costs in the hospitality industry are problematic, at best. Industry averages tend to hover around 28%, with most successful operations coming in much closer to the 20% mark. The reason for the disparity is simple: taking inventory, crucial as it may be, is tedious, time-consuming and prone to costly errors. So many operators either give the process short shrift, or they don’t do it at all.
Gilligan understood there was too much at stake to turn his back, so he first tried a manual system. He would mark down the amounts in increments of a quarter of a bottle, then transfer the figures to his computer to calculate his losses. But the system was seriously flawed, he said.
“For instance, when the inventory results were poor you always assumed you made a mistake in the process,” Gilligan said. “Inevitably I sometimes redid the inventory 2-3 times just to make sure I was accurate. Since the old system took almost 3 hours to do with help, when you have doubts about the accuracy of your results that meant spending the whole day on inventory. And, if you did make a mistake that meant next week’s results were going to be off too.”
“Since this way of doing inventory takes around 3-4 weeks to balance itself out before results can be relied upon, errors are devastating..” he said.
With AccuBar, Gilligan does inventory by himself in 1� hours. “Most of that time is pulling bottled beer from the coolers to count,” he said. “I consider that incredible.”
Despite the losses going out the door on a daily basis, Gilligan debated whether he could realize a good return if he invested in a more automated system. “The cost was a major concern. With annual revenues below $250k, my justification is that weekly inventories are possible and the ability to do daily inventories (which I have done) are productive to my business.”
He advises: “If the cost alone is the prohibitive factor, reevaluate your position before giving up on the purchase.”
Contact: Dave Grimm