As discussed in Section 4.3, there are number of key aspects to running and managing a bar and quite often, it is not as straight forward as it first seems. However, help may be at hand, particularly in the complicated area of bar finance, through the experiences of Bracknell RFC!

Options for Bar Finance and Management
Methods of financing and managing a bar within a club can vary tremendously and the whole experience from set up, purchasing equipment and stock through to managing sales, staff and customer needs can be a minefield. However, Bracknell have discovered through their experiences that the process can be assisted by looking at 4 key areas which influence how your club bar can be financed and run.

1. Brewery Discounts
2. Brewery Loans (+ other types of deals)
3. Buying Groups
4. The employment of Stewards.

Brewery Discounts
Brewery discounts are those essentially achieved on the prices of barrels of beer. However, many breweries will incorporate other items to run alongside any discount offers being provided, this may well include things like (e.g. servicing, equipment and promotions). Below are a number of key considerations that should be discussed when considering brewery discounts and in particular, what beer and brands you should be selling to the members!

• Brewery discounts are very competitive and some extremely large discounts are to be had if negotiations are undertaking fully and a variety of options explored.
• In negotiating discounts with breweries it is worth playing them off against each other. It suggested that you deal with at least 3 different suppliers and let them know the levels of discounts you are currently discussing with others.
• To achieve the best deal it is critical that you give your selected brewery sole supply. In terms of providing and using ‘Guest Beers’ most breweries now have a wide selection of guest ales to choose from.
• Better discounts are achieved on the breweries mainstream brands. Where possible clubs should aim to utilise these.
• The choice of product range is crucial. A poor range of products will mean that your customers will resort to the pub sooner rather than later!
• It is critical that service levels are set out with your chosen brewery and a service level agreement is in place prior to signing any contracts.
• On occasions discounts are tied up with loans and if possible it is best to avoid these types of deals as they are often expensive (see brewery loans).
• Brewery discounts may also be linked to sponsorship deals and it is important that these can relate to the clubs overall sponsorship strategy.
• Clubs should try to avoid long term commitments to discounts and be tied to a single brewery for long periods. The maximum contract with any brewery should ideally be no more than 2 years.
• Clubs should also give consideration to the options that breweries will give as part of their discounts on soft drinks and spirits. However, it is always worth comparing these with other drink suppliers, such as Cash and Carry. It is worth ensuring that the brewery discount contract being offered does not tie the club into their supplier of soft drinks and spirits.
• Through the consultations with the breweries, clubs should consider their position on the supply of equipment and it is worth including this within any negotiations.
• Always check during negotiation what promotions, offers and schemes the brewery can offer immediately and through the term of the contract. (E.g. promotional days/evenings, sponsoring events & special offers on products).

Brewery Loans
Brewery loans provide capital towards the setting up of a bar function which is more often that not part of a new clubhouse or an extension. Capital from breweries is available to contribute towards costs. However, clubs will then be tied into that brewery in terms of purchasing stock and product range. The loan will obviously also involve both capital and interest repayment over a set period.

Types of Deals Available

General Capital Loan
• Interest Free (unusual)
• Low interest rate
• Bank rate + 1%

Advance of Discount
• Where brewery will pay the discount available on barrels in advance – usually smaller capital sum and tied into purchasing set amount

Pure Discount
• Off Invoice
• Rebate (quarterly/annually)
• Combination of the 2 – doesn’t provide large capital sum

NB: Most breweries will mix and match from all 3 of these

Key Points to remember for brewery loans

• Convenient – Loans are easy to set up, usually require less paperwork and provide the club with a one stop shop for capital investment and supply
• Tied to Brewery – Not always a bad thing, however, can create difficulties when the club needs to get out
• Expensive – This is the main disadvantage, as some repayment plans can be expensive, particularly if fixed rates are set. Should always allow room to re-negotiate the repayment programme
• Security – This can often been less restrictive if the club is tied in with a brewery as it becomes a joint responsibility
• Under performance – Breweries often do not impose tight penalties for some degree of under performance.

Buying Groups
It is beneficial for clubs to try to collaborate in order to get joint deals and greater discounts.

A group of 3/5 clubs can negotiate a joint deal with a brewery and get substantial discounts on the combined barrelage. However, thereafter they all deal separately with the brewery for deliveries, payments etc., but still reap the benefits of the group discount.

Under no circumstances are individual clubs responsible for other clubs’ debts, but it is important to understand the implications if total barrelage goes down due to one club under performing

Breweries are not often keen to go down this route, particularly as big discounts can be found, however, they will do it under pressure. It is often worth combining with other sports clubs such as the local football, cricket or hockey club

Bar Stewards and controls
The responsibility of running the club bar often provokes much discussion and it will be very dependant on individual club circumstances. Below, Bracknell RFC have outlined some advantages and disadvantages of employing a bar steward for consideration.

Advantages	Disadvantages
Less volunteer labour required	Cost of employment – bar prices may need to rise
More efficient management	Need to control
Cleanliness of bar area	Long term commitment
Longer hours available	Tax/NIC general admin for post
Potential to enhance catering ops	Change of attitudes of previous volunteers
Increase in bar takings and margins	Contract of employment and legislation
Stock and bar management	Recruitment – right person to understand rugby club set up
Other jobs done around the club
Security improved

Newsflash: Bracknell RFC found that margins were up by 10% and takings by 30% as a result of employing a bar steward.

Bar Controls
It is extremely important that a number of measures are in place as bar controls to ensure effective management of this key area of a club. This is often placed under the responsibility of a steward who should report back to the committee regularly. This to consider are;

Profit Control
• Monitor Gross and Net Profit
• Independent stock taker
• Wastage control
• Other deductibles
• Agree profit reports/stock sheets to invoices

Revenue Control
• Sales budgets/targets
• Are you getting all the revenue
• Till rolls and banking reconciliation checks
• Staff levels/management

Security
• Bar operation may be ‘honest’ but not secure
• Fidelity insurance available for bar employees
• Key holders
• Stock security and insurance.