Opening a Restaurant – Deciding to Serve Alcohol
When it comes to starting out in the restaurant business one of the major decisions that you will have to make is whether or not to become licensed to serve alcohol. Alcohol sales can be very lucrative for a restaurant and many restaurants make up to two thirds of their profit from the sale of beers wines and other liquor. There are advantages and disadvantages to having a liquor license and it’s wise to look at all sides of the question.
While it can be a substantial source of revenue for your business, serving alcohol is also a big responsibility. There are different laws to adhere to depending on the state you are in and you must observe those laws meticulously and make sure that your employees do too.
As alcohol doesn’t require the preparation and handling that food does it offers restaurant owners a much better profit margin. Restaurants that buy a bottle of wine for $10 can decant it by the glass, charge $7 per serving and make a 66% profit! Beer is also quite profitable and can allow a restaurant to mark up a bottle by up to 300%.
In quite a few states, a liquor license is a commodity that becomes more valuable as demand for them increases. In these locations, your license is actually an investment. They can also be quite costly to obtain and can take months between the time you apply for them and the time that they are issued. If you decide to serve alcohol, make up your mind in the early stages of planning your establishment so that you’ll have the license by the time you open up your restaurant for business.
Of course, there are drawbacks and in this litigious society the first objection that comes to mind is your liability should a customer have a mishap after they leave your restaurant. Lawsuits can cause you to lose your license and ultimately destroy your operation. Your bartenders and servers must be very attentive and careful not to over-serve. Be sure to set policies that make it easy for your employees while keeping your customers as safe and happy as possible.
You may also have to deal with employee theft when you serve alcohol. Over-pouring for larger tips, stealing liquor and skimming the register are all things to be concerned about. The newer cash registers that work on a bar code reader make it more difficult to hide theft while making inventory control much easier. You will need a bar area that complies with your states laws concerning coolers, sinks and sanitation and you’ll have to invest in glassware, utensils and other items. You will also want to have a set policy for dealing with customers who become intoxicated and obnoxious.
If you do decide to serve alcohol, don’t begin with a huge inventory! Start with a few kinds of wine, beer and mixed drinks until you find out what your clientele prefers and what price level they will go to, particularly with fine wines. You may be in a neighborhood that generally prefers pilsner over regular beer or domestic rather than imported wines.
Make sure that the alcohol that you serve fits in with your restaurant’s theme. If you serve Mediterranean foods then try to stock wines from the south of Europe. If your specialty is Thai food then make sure that you stock Thai beer.
One of the best things about being able to serve beer is that you can gain quite a positive reputation by carrying twenty kinds of imported beer and serving good quality food. You’ll attract people who enjoy fine food and fine beers, a relatively rare combination in the restaurant world.
Having a liquor license has both positive and negative aspects. If you understand the requirements and set strict policies when you start your restaurant there is no reason why sales of alcohol cannot double your profits and enhance the atmosphere of your establishment.