EXPO 2022 | Aug 14-17 | Bally's Las Vegas

Cut costs & slash expenses

EXPO-2013-Logo-coverageThe ‘Save Money’ workshop Cut costs & slash expenses

To become a more profitable club operator, it’s not just about making money—it’s also about saving money and cutting wasteful expenditures. At EXPO 2013, our panel of experts assisted clubs of all sizes in those crucial endeavors with advice tailored to specific areas of club operations.

Heading this workshop was Bob Johnson, who tapped into his 50 years of bar experience and offered tips on how club operators and bar managers can save money in an area that is often seen as one rife with waste and theft.

Robert Smith of Nightclub Security Consultants offered crucial tips on assuring that your staff knows how to properly handle incidents both inside and outside your club, along with advice on how a well-trained security and management staff can save your club money on insurance policies.
Christie’s Cabaret’s Vice President Dean Reardon rounded off the workshop, sharing his keen understanding of the areas in which money is lost, and how you can implement changes to prevent this waste in the future.


bob-johnson-workshopBob Johnson

“The question is often asked, ‘What’s more important, sales or gross profit?’ Well, of course sales are very important. But if your sales are $100,000 and costs are $60,000, your gross profit is $40,000. Would you rather have a place that sold $100,000 with $60,000 in costs, or accept $80,000 in sales and only $24,000 in costs? Which is more desirable to you, higher sales or a better gross profit? I go for the gross profit. So here’s some suggestions I have for you on ways you can cut your costs.

“The highball glasses—critical to cost. If you pour, say, an ounce and a quarter, you don’t want a highball glass any bigger than nine ounces because you have to have the right ratio of mix-to-liquor in order for the drink to taste right. Now you have a decent tasting cocktail, and won’t have a margarita coming back with the customer saying, ‘Hey, don’t you put any liquor in this drink? Because I can’t taste it.’

“Using non-alcoholic triple sec is a good idea. A liter of triple sec is 15% pure ethel alcohol, and the rest is distilled water and the flavorings that make it the product it is. What is the importance of the alcohol if it’s only 15% of the bottle? You can’t taste it, you don’t recognize it, it’s indistinguishable. So I go with non-alcoholic triple sec. I pay $3-$4 for the bottle compared to the $10-$12 that I pay for the alcoholic triple sec—and save a lot of money.

“Draft beer is kind of like an Achilles heel. We have a lot of problems controlling draft beer, and it’s crucial to cost. So I simply go with bottled beer and have a much easier time controlling it—it’s a 1-1 ratio, usage to sales. So that’s another way to save a tremendous amount of money.

“I never have understood why we allow our bartenders to pour whatever they think is right for the drink. We use anything to control the pour. If you let the bartender do the free pouring, he’s running your business for you, and that’s not how it’s supposed to work. Every club that I’ve gone into and converted their method from free pour to a controlled pour concept, the pouring costs went down 8-15% across the board every time. That’s 8 to 15 cents for every dollar of sales you generate. That’s a lot of money over a short period of time.

“On advertising, I know we have to put things in social media, on billboards, maybe on the radio, etc., but to me, the best advertising is internal—your staff, your people, their personalities, their friendliness, their ability, their knowledge to do the job—that’s where advertising comes from. People will not come back to your place of business unless you’ve exceeded expectations and done this age-old thing called ‘attention and recognition.’” (For more information on ‘attention and recognition, please see Bob Johnson’s story on page 88-89 of this issue.)

robert-smith-workshopRobert Smith

“This is about saving money, and I can break it down into three points. The first tip is to change your hiring practice. This is show business, not show friends. I don’t care if he is your family friend. Fire him. If he’s a thug, fire him. Don’t even hire him—now you don’t have to fire him. Do a real interview. Think of the people you have working for you now. Look at who you’re hiring, look at how your hiring.

“By the way, how many of you have females on your security staff? That’s a great tool. I’m sorry men—we are what we are—but women handle things differently, and if you don’t have that opportunity in your tool belt you can’t use it. Having a female go up to six guys—one of them your problem guest—would have a totally different effect than having your biggest guy go and ask them to leave. But if you’re not hiring this person, you don’t have the opportunity to handle the problem correctly.

“Changing your hiring practice is a huge way to save money. If you’re hiring the right person, you’re not firing them, you’re not having to re-hire someone, you’re not having to re-train them, and in some states like California, you’re not having to re-license them. You’ve saved money already.

“Next, train your security staff correctly. If they’re trained to do things better, they will work better. If they don’t get it, if they don’t want to buy what you want them to learn, fire them. Once again—hiring and training.
“The next thing is to have policies. Policies that are real and tangible. Policies that your employees can read and know what the rules are. I gave a training session recently and asked the managers that attended if they actually talked to their new employees, sat with them and said welcome to our team, this is what I expect of you, I want you to show up on time, I want you to be dressed for work and I want you to read this policy manual, and I want you to sign it and bring it back to me before you start work. And if there’s anything you don’t understand, I want you to ask me.

“How many of those managers said, ‘Oh, we do that’? Every single one. Then I asked the employees how many of them had that talk with these managers. Crickets. Because you’re not doing it. You want to do it, and you tell your employees, ‘Hey, if there’s something you don’t get make sure you talk to me,’ and then you let them go to work. Where’s the policy manual? How do they know what you want done if you don’t tell and teach them?

“Lastly, move your security thoughts to the front of the line. Changing your carpet or building a bigger office or cleaning the chair, I couldn’t give a rat’s ass about that, because those don’t cost you money in a lawsuit. Having the incorrectly trained guard and no policies can cost you a ton of money.

“I’ll leave you with one final point: Hiring and training the right person and having the right policies can save you money with your insurance. Ask any insurance agency if they give insurance breaks for training. Does 10% off sound good on assault and battery? Yes—and it’s a money savings automatically. If your insurance agency doesn’t give it, ask them why not. If you don’t have the claims, why aren’t you getting the credit for being the good operator, not the bad operator down the street?

reardon-workshopDean Reardon

“We spend a lot of money on marketing—radio, TV, social media, SEO—but when patrons get to our club, we forget how to work it. How to work hospitality, how to work a sales force. Our sales force includes our entertainers, our servers and our floor hosts.

“We need sales managers training sales people how to make money and how to generate money, and the only way to do that is to orientate, educate, motivate and to get people fired up on a regular basis. We don’t need ‘office’ managers, we need people that are proactive on the floor.

“I’ll give you one example of how we lose money just through our entertainers. When they get to that pivotal moment of asking for money and assuming the sale, what do we get? Entertainers asking questions—’You want a dance?’ or ‘you want to go party?’—and when you ask questions with yes or no answers, 50% of the time you get no.

“There’s only one way to do it: Give patrons two options. You ask them, ‘do you want a $20 dance or $40 VIP?’ We are in the sales business. We are selling drinks, VIP rooms and bottles, and if you’re not firing people up and getting them excited on a regular basis, you’re losing money.

“I tell everyone that the first nine to 12 minutes a guest is inside your establishment is probably the most important time, it’s 80% of our business. If you perfect the first nine to 12 minutes after the guest arrives, you don’t need that much marketing. The ambience, the ‘four greets to the seat,’ the teaching your staff to wink, smile or say hello every time they walk past a guest is marketing in itself.

“If you have people that are friendly and interactive, who do the ‘four greets to seat’ when guests arrive, don’t you think that person is going to spend more money? Let guests know they have arrived at an establishment that understands and respects hospitality, and therefore they need to act accordingly, to tip accordingly.

“We forget these things—the basics. Anything good you see in this industry, there’s hard work behind it. There’s effort. Do you give a power meeting or server meeting at the beginning of each shift? If you don’t, you’re losing money. These are the people that are your sales force. These are the people that are making you money, and we don’t want to go motivate them? Not a sermon, but even one minute to fire them up? You have a thousand people a week coming through your doors. If you develop those relationships with your staff, maybe you can get those thousand people in your club two or three more times that month. What does that cost you? Nothing.

“You don’t always have to look at it as dollars and cents. But we do; we look all over the place to make money and cut corners and what’s the new product and SEO now and social media—but we forget about the basics.

“You’ve got to treat this business with respect. You have to get in tune with your staff, you have to get them motivated. Think outside the box, think about how you can get people excited every single day—that’s how you’ll make more money; and then you can cut the corners and save money here and there, but worry about the business first.”


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