How to tell if a happy hour pays
Every deal has a cost most owners don't count: the regulars who were coming anyway now pay less. The deal only earns money when new guests, and what they eat, make up for that.
given away = usual drinks × (regular price − deal price) each new guest = drinks × (deal price − drink cost) + food × (1 − food cost %) deal profit = new guests × each new guest − given away break-even guests = given away ÷ each new guestA worked example
You sell 40 drinks from 4 to 6 on a normal day at $7. Dropping them to $5 gives away $80. A new guest who has two $5 drinks that cost you $1.50 each, plus $10 of food at 30% food cost, is worth $7 + $7 = $14. You need 6 new guests to break even; 10 new guests makes you $60.
What makes a deal work
Food. A drink deal alone rarely pays, because the margin per drink shrinks. A deal that pulls people in hungry, or pairs with a snack menu, usually does. The other lever is timing: run it when the room is empty, so you're not discounting drinks for people who were already there.
Questions owners ask
How do I know how many new guests it brought?
Count covers in that window for a few weeks before and during the deal. Or use a code or a tool that counts people who came because they saw the deal.
Are there rules on happy hours?
Yes, and they vary a lot by state. Some states limit or ban drink discounts by time of day. Check your state's liquor agency before you run one.