If you're checking staff motivation and productivity, menu performance or changing customer tastes, the results always show up in the sales figures. But what should you track?
1. Number of Customers.Simple! A good measure of popularity, but how do you count them if there's a crowd wating for take-away food? The most important number of all, and it's surprising how many businesses don't know it. A people-counter at a door may give you close-enough figures if you don't take orders at the table. Transaction numbers is the other way, but it's skewed by a single purchase for more than one person.
Once you know this key figure, many other results are easy to work out.
2. Total Sales Per Head.Total sales divided by the number of customers. How does it compare to last week and last month? May vary between different times of the day and day of the week.
3. Food, Dessert, Beverage or Alcohol Sales per Head.Total sales should be divided into key areas of choice - main course and starters, desserts, non-alcohol beverages, alcohol and perhaps also side orders (eg breads and salads) and other product sales. It shows two things: how much your menu appeals to customers (do you have all the choices they want, eg the right dessert selection? ), and how well your staff are selling. This KPI can be a good basis for a bonus system. Use theProfit Sensitivity Analyserto test some of your own figures.
Warning: don't divide purchases into too many small groups for working out the per-head. You may want to see separate results for pizza, pasta and burgers, but the per-head of each of these groups is not relevant, as they are often substituted for each other.
4. Seating Efficiency.How well your tables are turning over while still offering quality service. Many small things combine to have a large impact: cooking time, hosting, speed of seating, service and clearing. The size of tables relative to the average group size will also make a difference. Use theSeating Efficiency Calculatorto test some figures.
5. Sales per Hour.Useful in a high-volume setting like a bar where staff may have their own till. Increase speed and sales by organising the touch screen layout so popular items can be found quickly, and ensure that the screen has a rapid 'refresh rate'. Equpment updates can make a big difference here.
6. Sales per Labour Hour.Divide total sales by the total number of labour hours and compare with your average cost of staff per hour. How does it look? If sales were $2000 and it took 50 staff hours to produce and serve it, that's $40 of sales per labour hour. It compares well with a labour cost of $10 per hour, giving a labour cost percentage of 20%.
7. Function Gross Profit per Month.Very useful for function and event staff, especially if they can earn bonuses. Are they rewarded for gross sales or the actual gross profit they achieve? Do they know which are the higher-margin packages and additionals that will maximise profit? You may have sold the seafood banquet at $80 per head (with a $50 gross profit). But if a lighting and entertainment package was also sold for $800 (with an actual cost of just $100), overall profit would be considerably increased.
8. Strike Rate.If 500 people came to your club last night and only 100 ate at the bistro, the 'strike rate' would be 1 in 5, or 20%. Good enough? Compare it with similar businesses and at different times. If only 20 of these diners ate dessert, that strike rate would also be 1 in 5. This could be improved with a better menu selection and suggestive selling.
9. Revenue per Available Seat Hour (RevPASH).Similar to the way hotels measure Revenue per Available Room Night. To work out RevPASH, divide total sales by the number of 'seat hours'. Eg a restaurant of 100 seats open for a 4 hour period has 400 'seat hours'. Use theRevPASH Calculatorto test some figures.
10. Most and Least Profitable Menu ItemsplusBest and Worst Selling Items.Grade recipes from most to least profitable, working out accurate results usingrecipe softwareor recipe cards. Compare with the number of sales of each. When you have items that are both low profit and low sales, these 'losers' should be taken off the menu as fast as possible. Use theMenu Profit Analyserfrom the Download Library to test your figures: it combines the measurement of both profitabilityandpopularity to test the overall 'profit strength' of a menu. A very powerful tool.
Comparisons and Benchmarks
Raw figures for a period don't always give enough guidance. More useful information comes fromcomparisons.
Useful comparisons include:
- This week with last week
- This month with the same period last year
- One section or unit compared with another
- Compare the effects of different weather conditions and temperatures
- Compare different times of the day and days of the week
- Compare the performance of different staff members or under different managers
- Compare results with a different number of people on duty
Many operators are frustrated by the lack of available industry figures to compare with their own performance. It's a fairly paranoid industry and many people don't wantanyoneknowing their sales. Unfortunately they don't know them in much depth either! Some segments have organised KPI comparison figures available by subscription eg the club industry. But the lack of outside figures shouldn't stop you comparing performance your own figures from different periods and teams.
Profitable Hospitality offers management and cost-control systems (Manuals & CD-ROMs) for restaurants, cafes, hotels, bars and clubs. The systems are based on the extensive consulting and operating experience of CEO Ken Burgin, and enable busy owners and managers to set up complete operating and cost-control systems in minutes, not months. Profitable Hospitality also runs regular management training workshops in the areas of kitchen profit & efficiency, restaurant marketing and functions management. A free monthly e-newsletter keeps you up to date on the latest industry management issues. www.profitablehospitality.com.
