Monthly Archives: April 2013

How Does A Bar Make Money

Like it or not a bar is a business and a business by definition has the objective of making a profit. When it comes to dealing with girls and partying or when it comes to regularly patronizing a bar, it is easy to forget that the bars are a business. The bars are accountable, they are a business and the objective is to make MONEY.

So now down to the crux of this article how do the bars make a profit. The first and most obvious way is through the bar fine. The bar fine in Angeles bars is anything from 1200 up to 4000 with the bar receiving 48% the girl receiving 50% and the mamasan receiving 2% as her commission. In most bars I would estimate that the bar fines account from anywhere between 40 to 60% of the bars revenue on any given night. The barfine is of course a critically important aspect of any gogo bars profitability and in my opinion a cornerstone of the Angeles bar business as a whole.

An equally big percentage of a bars profitability is made up of drink sales. The drink sales are composed of customer drinks and ladies drinks. Customer drinks range anywhere from 50 piso (local drink happy hour price at some bars) through to 300 piso for a shot of Hennessey XO Cognac. On average I would say the price for a local drink at the non happy hour time period would be 95 piso in most Fields Avenue bars.

A very important part of bars sales is the ladies drinks. For those of you who don’t know a ladies drink is a drink you buy a girl who works in the bar. These will normally act as an ice breaker or a prelude to a barfine. The ladies drinks are always more expensive than the same drink when bought as a normal customer drink because the bar gives the girl a commission on every drink she gets purchased for her. The ladies drink in this respect is actually a subtle way of giving the girl an opportunity to earn some money rather than just handing her cash.

In the last 5 years Angeles has seen the development of the so called double ladies drink. The double ladies drink pros and cons have been discussed endlessly but at the bottom line here is that the so called double ladies drink is normally a double price of a single ladies drink or if not exactly double then very close to it. The double ladies drinks will range anywhere from 280 piso through to 350 piso. The ladies drinks can also perform another function when they are utilized as a substitute for the bar fine. In modern day times there is some fairly serious pressure on the bar fine system from various authorities linking it with prostitution and even human trafficking. As a result it is becoming common practice for bars to replace the actual payment of a bar fine with the purchasing of a certain amount of ladies drinks. This is a variation on the more traditional bar fine system and is called the EWR (Early Work Release). The customer purchases a certain amount of ladies drinks and the girl is then free to stop work and leave the bar with the customer.

In Makati the owner of the major group of bars has gone on record as saying, “we don’t want a bar fine system”, in fact there is no such thing as a bar fine in his Makati based bars as it is based upon the purchasing of ten ladies drinks and once the girl has secured 10 ladies drinks she is free to stop work and leave the bar with whomever she likes. When it comes to Angeles I estimate that the ladies drinks make up anywhere from 35% through to 55% of a bars total sales on any one night. Of course the figure can go as high as 70% in the bars that substitute the bar fine with ladies drinks. As is clearly shown by these figures even they are only estimates the ladies drink is an essential component of a bars profitability.

Many bar owners adopt the approach of trying to maximize profits by minimizing expenses. This is what I loosely refer to as the positively negative way to run a bar. Running a bar this way will typically include ordering the bare minimum of stock especially in terms of alcohol. This in fact does not increase profit because by purchasing this way they miss out on the discounts that come with purchasing in bulk however I think it is important to remember that many bars are run on little more than a shoe string budget and have little choice but to order thriftily. Two other ways of minimizing cost include a limited the use of electricity by turning off an air-conditioner and other electrical appliances when the bar is not busy and applying deductions to the workers salary, these will mainly include uniform and food deductions, deductions for bikinis, makeup, shoes and of course loan advances with interest.

In modern times bars will often try to sell a number of products where the profit margin is maximized. Two which spring to mind are ping pong balls and party poppers. The ping pong balls are perhaps the ultimate money spinner. They represent a one time minimal investment and can be used time and time again. The girls love them because they are an easy way to get commission and the customers enjoy them because of the atmosphere they create when the girls scramble to collect them. Most ping pong ball buckets contain 10 balls and they sell from between 300 to 500 piso depending on the bar. Another gimmick is the party poppers which are bought for about 50 peso each and sold for 100 to 150. Lastly there is the more traditional items for sale and these include T/Shirts, bar towels, beer coasters, key chains and a number of other cheaply produced items. Overall I would estimate that these items would account for approximately 3 % of a bars profit level.