BarMinder: Proven Effectiveness

Shrinkage, the industry term for an allowance made for reduction in the earnings of a business due to wastage or theft, cost businesses in the US over $46B in 2018*. This significant loss results from the fact that shrinkage hits the bottom line of businesses multiple times. First, in the form of standard costs of lost inventory. More money must be spent to refill the backroom supply, thereby unnecessarily incurring increased additional expense. However, in addition to that form of loss, shrinkage hits owners again in the form of foregone revenue. The gap in time from when the shrinkage occurs to when management recognizes the issue can make the root cause nearly impossible to uncover. Not with BarMinder.

Revenue is everything in the bar and restaurant industry. BarMinder maximizes it. In 5 months of testing, the BarMinder system increased Revenue Per Ticket by 18.2%, from $7.40 to $8.74. This is due to 2 key indicators discovered by the BarMinder system. When drinks are poured properly, customers will often order more than just one. With the ease of pouring the BarMinder wireless spouts provide, every drink can be poured properly, every time.

The BarMinder system also impacts and helps manage COGS. COGS remained steady with the BarMinder system, meaning profit was maximized across all 5 months. By keeping COGS steady and increasing Revenue Per Ticket, the BarMinder System increased the Test Location’s Profit Per Ticket by 18.1%. This resulted in a significant improvement on the bottom line for the test period, leading to $1,993 in extra profit for November, and an additional $3,630 for December.

BarMinder dispelled a common misconception that many bartenders have, and made them more money. Bartenders have long thought that free drinks means more tips for them, but BarMinder’s data proves otherwise. Liquor Tips Per Ticket are more closely correlated to the number of drinks served, rather than to the number of free drinks provided. The more money the customer spends, the more they will tip their bartenders. Regulars and favorite customers should still be taken care of though, as free drinks are a staple of bar culture. Because of this, BarMinder works with and encourages management to increase the use of comp tabs, giving bartenders agency over how best to take care of their customers.

Due to the functionality of the features of the BarMinder system, we anticipated these results. Therefore, it is encouraging that the benefits we intended to bring to the owner of the test location revealed themselves upon installation of the system. The system was created with the intention of increasing revenue, decreasing COGS, and saving time so owners can make more money. This data set suggests that BarMinder accomplished that.

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