Some people frequent bars for a good time, others go to drown their woes. The Partender team found an opportunity.
What began as a late night turned into an idea that would lead Partender founder and CEO, Nikhil “Nik” Kundra, and his friends to create an app that may change the way bars and other industries that rely on supply chain management do business.
Kundra and his teammates, all University of Florida students at the time, were at 101 Cantina late one night in 2011, waiting for a couple of co-eds who happened to be bartenders. The ladies told them that they would go out as soon as they finished doing inventory. Six hours later, the women still were working, but the idea for Partender was born.
The men noted the inefficiency of the bar inventory process. Bartenders and managers would typically write down what they had in stock, what they were low on and what they needed to reorder at the end of a busy weekend. The amounts in each bottle of liquor were estimated and recorded manually, usually on a stack of paper or, at best, an archaic spreadsheet. The data was then set aside, often left in a file without ever being looked at again. Bartenders and managers were spending time and money on a process that failed to determine profit and loss. There was no reconciliation between drinks sold and drinks given away or any financial analysis. Most importantly for the bar business, because the process took so long that most bars wouldn’t even do inventory, there was no concept of shrinkage, the loss of inventory due to over-pouring, unauthorized giveaways, theft, wastage, etc.
Kundra knew that there had to be a better, and certainly more efficient, way to manage this process. He and his teammates, now UF alumni, started researching the inventory process in hundreds of bars throughout the U.S.
What they found was that bars:
- Usually were not tracking their inventory
- Had ambiguous par-level data, if any
- Had arbitrary data due to inconsistent tracking
- Were taking five to six hours to inventory their supplies
- Had too much dead inventory that was not moving
- Were running ou of stock and missing out on sales
- Had the wrong items on the shelves
- Were susceptible to employee theft due to over pouring
The solution was a mobile, B2B software-as-a-service solution, or SaaS solution, that reduces the time it takes managers and owners to complete inventory to 15 minutes or less.
The application digitizes the process into a few taps and swipes on iOS and Android platforms. Images of liquor bottles of various sizes can be selected, and the person doing inventory moves the fill line to where it is relative to the bottle (and its label) that corresponds exactly to the one that he is looking at. This shows how much liquor was removed from the bottle since the last time inventory was taken. With that basic information, the software provides volumes of additional data that helps bar owners and managers determine:
What is selling the best and worst (Product Analysis)
What needs to be replaced with something else to earn better margins (Comparative Product Analysis)
If a particular event brought in the desired amount of revenue (Event Analysis)
If that last promotion worked (Promotion Analysis)
And even by whom, when, and where shrinkage is being caused (Shrinkage Analysis)
Additionally, the SaaS solution can recreate an establishment’s par levels based on its actual flow of product since what gets rung up is always different than what actually gets given away, causing traditional par levels to be 40 percent inaccurate. Partender also offers predictive ordering to prevent an establishment from running out of stock of its customers’ favorite beverages, and potentially losing sales (Par Level Creation, Predictive Ordering and Dead Stock Analysis).
Kundra says that Partender’s solution adds an average of $4,000 per week to its customers’ bottom lines by helping them eliminate the 23 percent average shrinkage (one in four drinks) intrinsic to the bar industry and by helping them save on time, labor, inefficiency and missed sales opportunity costs. According to Nightclub & Bar Magazine, shrinkage and these other costs cause 60 to 80 percent of bars and restaurants to fail within their first three years.
While several establishments in Gainesville, such as Sharab Lounge, 101 Downtown and The Jones B-Side, have been using the mobile solution for several months and are now paying customers, the pilot program launched only about a month ago. There is substantial interest from restaurants and bars around the world, and they already are acquiring clients outside of Gainesville, such as The Avenue on Orange Avenue in downtown Orlando. To date, 96 businesses have signed up and 265 plan to sign up when the company goes public with the product. Each of these entities can represent dozens of restaurants and bars, bringing the number of individual locations using the app into the thousands.
Julian Miller, CEO of eMotion Technologies and co-owner of Sharab Lounge in downtown Gainesville says, “Partender has the potential to dramatically empower establishment owners to run their businesses more efficiently and profitably. There are benefits for bars that span far beyond the mitigation of shrinkage. It has a lot of soft benefits as well, such as implementing structure that is easily applied and fostering more effective communication within an establishment.”
Kundra believes that Partender’s simplicity and speed have enabled managers and owners to instill a psychological effect in their staffs’ minds by enabling them to do inventory each shift. Partender’s 15-minute solution empowers management to do this all without wasting much time or money.
The Jones B-Side, for example, has used the application to cut dead stock by 60 to 75 percent. Using Partender, management was able to analyze what was or was not selling. In about three inventory sessions, the Partender team was able to determine the bar’s par levels, thereby, reducing shrinkage and saving the restaurant more than $9,000 in two weeks.
101 Downtown has cut the time it spends doing inventory each week from around a combined 24 hours to 42 minutes. The club also has reduced the amount of employees doing inventory from two (one of whom was a manger), to one. Additionally, the app has prevented 101 Downtown from running out of rums and vodkas on numerous occasions.
Accurate par levels mean that establishments will now reorder the exact amount of liquor from distributors. At first, bar managers believed that the reduction of shrinkage would decrease the amount of liquor they purchased from distributors, thereby straining their relationships. However, they discovered that they were reordering less before because they knew that shrinkage was affecting the amount of liquor being consumed. Now, they order more of what is selling.
“I’ve witnessed Partender come a long way since its inception, and the team now has a real product that I am fortunate enough to be involved with,” says Miller. “The value proposition is there, and, right now, we’re working on building compelling examples of the ROI on implementation.”
He adds, “Partender is going to profoundly change the industry.”
Kundra and his team members are connected with companies residing in Silicon Valley, and they travel to the West coast at least once a quarter to bounce ideas off of other software engineers.
“A lot of the [selling and adopting] process is tied to relationship building,” says Kundra. “We are happy to talk to anyone who has relationships with big chains or distributors who will benefit from such an insightful application.”
Those relationships are what Partender is looking for at the moment. Kundra is appreciative of the capitol that he has been offered, but what he seeks the most at the moment are connections to the food and beverage industry.
Partender won the GAIN Fast-Pitch award in April and made it to the Cade Museum Prize’s Final Four. Kundra emphasizes that he and his team are happy that they have been so successful, particularly because they only have shared about 5 percent of what the solution has to offer. The 95 percent that is yet uncovered will remain under wraps until the team decides to disclose several recent developments.
Until then, they will continue to raise the bar on the inventory process and help their customers increase their productivity and bottom line.