How the "Bar Rescue: Bankers Edition" blog post from @JeffMarsico started
My friend @JeffMarsico released a blog post yesterday called:
Bar Rescue: Bankers Edition. After we wrapped up writing our white paper on bank product profitability I started thinking about one of my favorite reality shows on TV, Bar Rescue, and how one of the focuses is on financial management. Well I wrote the piece below and shared it with him. This short note led to his blog post that I strongly suggest you read.
Spike TV has a reality show called Bar Rescue. The host, Jon Taffer,
rescues a bar that has requested the shows help. Jon Taffer is an internationally recognized, award-winning restaurant operator, owner and concept developer. The opening credits mention 6,500 bars will go out of business this year. One of the first questions Jon Taffer asks the financially underwater bar owners is what is your liquor cost. What is liquor cost? It is a bar financial ratio designed to help measure the health of liquor sales. This is the formula:
Liquor cost =
(Start of period liquor inventory value - end of period liquor inventory value + value of purchases during period) / Liquor Sales during the period
I have yet to see an episode where a bar owner knows their liquor cost. Banking is different. Banks must publish financial information in a standard format to the government quarterly. What that means for banks is they always know their liquor cost. Any business that sells a product or service should have a process to calculate product profitability.
That is it for my note to Jeff. On Monday, September 23, 2013 at 11 a.m. in San Antonio, TX, @JeffMarsico and I will be speaking on bank product profitability. The title of our presentation at the ABA Marketing Conference is "Product Profitability - Out of the Shadows". If you are going to the conference, Jeff and I would love to see you there.
@dmgerbino