While there is heated debate on exactly how many restaurants make it, most studies out there agree on a 10-20% success rate after 5 years. Believe it or not, these stats prove that running a restaurant is way more than just the food.
Behind the scenes a restaurant is truly a business, and like any other business you must always know some key numbers to stay on track towards becoming a success story instead of a statistic. Here are a few of the key numbers every restaurant owner should know at all times to stay on track.
Annual Plan and Operation Budget
Having a restaurant annual budget is the key to succeeding. Set your budget by identifying what percentage of growth you want for your restaurant. Most businesses set double digit growth (10%+) as the goal they strive for. Setting your operation budget comes right after you set your sales plan. Identify the profit percent you want your business to run at and make sure that your margin per item aligns with your profit goals.
Daily Sales Reports
Tracking your sales throughout the day is crucial to managing a profitable business. If business is trending higher than you budgeted, you may need to communicate with the kitchen and floor staff to prepare for higher volume business. Conversely, if business is trending down from what you anticipated, it is time to start burning up the social media sites to drive traffic or look at sending non-essential staff home.
Menu Mix Report
This tells you a lot about your guests likes and dislikes. The menu mix gives you key information that your kitchen and wait staff need to better grow your business. The culinary staff needs to know which items you sell most of on certain days and times so that they can prepare accordingly. The wait staff needs to know about your slow moving items so they can help you get the sales up on them. If you can’t get the slow movers selling then it is probably time to take them off the regular menu and run them as features.
Hourly Labor Report
Labor is the largest expense of any business, so managing it hour by hour is important. Looking at your sales versus labor several times a day allows you to make the most profitable decisions for your business.
So, how can I get these numbers?
If you have a point of sales system that can run reporting, then this is easy. Even the most antiquated POS systems have the capability to pull these reports. If you do not have any POS system in place, mining the data is a bit more cumbersome, but can be had. If you have any questions about how to get started on tracking these numbers, talk to your sales representative. They are there to help you succeed and can get you in touch with experts or recommend tools to get you headed in the right direction.