If your venue hosts events, there’s a lot you need to plan out. Establishing bar packages for events is one of the most important - as this is something all potential customers will want to know in advance.
Organizing your bar package pricing can also be tricky, as there are so many factors that influence how much your bar operations will cost. This is a fundamental area of your event’s profitability, so you’ll need to make sure you get your pricing right so your events will be a success.
To help you out, here are the key steps and considerations you need to make when figuring out how to price bar packages for events.
Price Bar Packages | Top Advice
Understand Your Costs
First, you’ll need to know how much a bar package will cost your business before coming up with a price for your customers.
Calculate all the costs associated with providing the bar service. This includes your bar stock, like alcohol, mixers, ice, and garnishes. It also includes any equipment you use in the bar, like glassware and any specific bar rentals you might need.
Understand your staff scheduling needs and calculate the staff wages you’ll need to run the bar. Then consider any other related expenses, like electricity used to run your fridges, as well as a dedicated amount for potential breakages. Make sure to consider both variable and fixed costs.
Understanding the upfront costs of running event bars can be tricky because you can never be entirely sure how much your guests will drink. You can determine a rough estimation by looking at historical event data.
The best solution is to simply come up with a price list for all of the stock your bar will hold. Determine the cost of each item - from your top-shelf liquor down to each lemon slice. The exact quantity of drinks can be determined after the event, but it’s always good to have a rough estimation of how much stick you will go through with each event.
Define Your Packages
Once you have a very clear list of all related bar costs, you can start to create different bar packages for events. This will help you offer different pricing strategies for each bar package you offer - giving your customers a range of options to choose from.
A good tactic is to create different tiers of bar packages based on the types and quality of drinks you'll offer. For example, you might have a basic package with house beer, wine (just offering “red” or “white”), standard spirits (just offering “gin”, “vodka”, “tequila”, or “whiskey”), and soft drinks (club soda, juice, diet coke, etc.).
Then you could have a premium package with name-brand spirits (eg. “Jim Beam bourbon”, “Bombay Sapphire gin”, “Bacardi rum”, etc.), craft beers, and a list of specific wines (like cabernet sauvignon, pinot grigio, chardonnay, etc).
Finally, offer a custom package that includes specialty cocktails, champagne, and any particular brands of liquor that the client wants.
Now, you can determine exactly which supplies you’ll need for each package. Refer back to your price list from the previous step, and determine how much each bar package would cost you.
Establish Serving Styles
An important consideration in pricing bar packages is how you will serve guests at the event. This could include a self-serve bar where guests pour their drinks, a regular bar with bartenders, or a waiter service for drinks. You could also have multiple dedicated bars, like cocktail bars, a whiskey room, a gin and tonic station, and a champagne bar.
The service and setup costs will vary between these different options, so understand what you could offer guests and how much the extra service charges will be.
You’ll also need to know how guests will cover the costs of drinks. Will you offer open-bar packages? This works by getting your client to pay a deposit, and then cover the cost of all drinks served by the end of the event. Or you could offer a cash bar where guests pay for their drinks. Each serving style will involve slightly different operations.
Know Your Audience
When creating bar packages for events, one of the most important things to get right is coming up with packages that make your customers happy. It’s no use creating bar packages for events if they don't align with your audience’s interests.
Understand the preferences and expectations of your target audience. Are they likely to value premium drinks, or would a basic package be better? Would they rather drink cocktails in your space or beer? Would they prefer fewer premium drinks or a larger quantity of standard drinks?
This information will help you tailor your packages to match their preferences. It will also make it easier to market and promote your bar packages for events.
Consider the Event Type and Duration
The nature of the event matters for how you’ll price your bar packages.
For a wedding or formal event, premium packages might be more suitable. For a casual gathering, a basic package could work. Also, consider the duration of the event - longer events may require more drinks and staffing.
Of course, the size of the event will make a huge difference too. Not only because of how much stock you’ll need for the event, but for fridge space, ice, glassware, and even washing up. The bigger the event, the greater the list of expenses becomes.
Calculate Per-Drink Cost
At this stage, you’ve got a good understanding of what you can offer and how much your different offerings will cost you. Now it’s time to get a bit more granular and determine the exact cost of each drink.
Divide the total cost of each package by the number of drinks typically served in that package. This will give you a per-drink cost, which you can then mark up with your profit margins. Make sure to account for spillage, breakage, and over-pouring.
You’ll also want to add a percentage of overhead and profit margin to the per-drink cost. This ensures you cover your operational expenses and generate a reasonable profit from the bar service.
Of course, you can’t always know exactly how many drinks you will serve for each event. This is why it’s always a good idea to slightly overestimate your numbers.
Perform Competitor Analysis
Your event bar prices must be in line with what competing venues are offering.
Research what competitors in your area are offering and at what price points. This will help you understand the market standards and avoid pricing too high or too low.
Sure, you’ll need to make sure your pricing strategy makes sense for your business and operational costs. However, if it’s not competitive, then you could very easily lose customers to other venues.
Bundle and Upsell
Once you have a good foundation in place for pricing your event bar service, you can think of ways to enhance your offering. Bundling and upselling are great strategies for making your bar service more profitable.
Consider offering bundled deals, where clients get a discount for purchasing a larger package. You could also provide options for add-ons like specialty cocktails, upgraded spirits, or wine selections for an extra charge.
Maintain Transparency
Now you know what your different bar packages will cost, it’s time to communicate this to your customers.
Communicate what each package includes and how much each one costs. List the types of beverages, the quantity, and any other services (like cocktail mixing or wine service) that are part of the package.
The last thing you want to do is hit your guests with surprise costs after the event. This will negatively impact their experience and could result in your venue developing a bad reputation.
Test and Adjust Your Pricing Strategies
There are many different ways you can price bar packages for events. There are also many different elements you could include in each package. This is why it may take some adjusting before you come up with packages and pricing that your customers love.
After your initial events, you might need to adjust your prices based on customer feedback and demand. Be prepared to make changes if you notice certain packages aren't selling or if there's a high demand for a particular option.
Of course, also pay attention to any areas of your bar pricing that might be affecting profitability and adjust these.
You should also be open to customizing packages for specific clients or events. Some clients may have unique preferences that could be accommodated at a premium price. This can help you charge more for your bar packages while delivering a better customer experience.
Conclusion
There’s a lot that goes into pricing bar packages for events, so make sure you understand all of the different factors before quoting a price. When planned carefully, your bar prices can make an enormous difference to the overall profitability of any event your venue hosts.
If your venue hosts events, you’ll also need to use an event management platform to help you optimize operations. Try Perfect Venue for free to see how it can grow your business more efficiently.
