How to Set Pricing in Your Bar Without Losing Your Shirt
Setting bar prices isn't just about doubling your profits — it's about knowing your numbers and understanding your market. It’s important to set bar prices where they can protect your profits and keep your guests happy. I've seen it all: pricing based on gut feelings, guessing based on what the competition charges, or simply marking everything up by a standard percentage. But if you want to make real money behind the bar — not just push volume — you need a more strategic approach. Here are five tips to help you price your bar menu without losing your shirt.
Know your ideal pour cost
Most restaurants target a pour cost between 18% and 24%, depending on your concept. That means if a drink costs you $2 to make, you should price it between $8.33 and $11.11. But you won't know your pour cost unless you calculate it for each recipe. It's absolutely critical. Guessing just isn’t good enough if you want to be profitable.
Build recipe costs and cards for your drinks
Every single cocktail on your menu should have a detailed recipe with measured pours and accurate costs. Don't forget to include everything — garnishes, mixers and even skewers if they're unique to that drink.
The more precise you are, the better you can price your drinks correctly and consistently.
Reverse engineer the price based on your target margin
Once you know your cost, divide it by your target pour cost to get your price. For example, if your cocktail costs you $1.75 and your target is a 20% pour cost, then the selling price should be around $8.75.
Now, let me be very clear: once you get that number — $8.75 in this case — you must look at what other restaurants in your marketplace are charging for similar drinks. You don't want to leave money on the table. Pricing is a guideline that needs to be balanced with market realities.
Engineer your bar menu for profit
Highlight your most profitable drinks. Literally. Use menu design and menu engineering to draw attention to them. Then, train your bartenders to suggest these drinks first. That one-two punch of visual and verbal promotion can drastically increase your profitability.
Also, be sure to factor in guest expectations. Your pricing needs to reflect both your market and your guest experience. If you’re a high-end concept, your drinks should be priced to match. But if you're a casual pub, pricing too high can scare off your guests.
Track your actual results
You may think a drink is profitable, but if your bartenders are leaning heavy on their pours or the drink isn't selling, your numbers could be way off. Regular bar inventory, sales mix reports and coaching are essential to make sure your bar pricing strategy is actually working.
Smart bar pricing isn’t about copying someone else's menu or picking numbers at random. It’s about using your data, understanding your margins and designing your pricing for both profitability and guest appeal. That’s how you protect your bar. That’s how you build restaurant prosperity.
Be sure to visit my YouTube channel for more helpful restaurant management video tips.
