Restaurant KPIs, key indicators for your business management

Restaurant KPIs are the key performance indicators that show you if a restaurant is profitable or not. With KPIs’ information you can make better decisions based on them, to improve the restaurant management. Knowing that 90% of restaurants that close is due to poor planning and management, it is an intelligent strategy.

In recent years more and more establishments have started to work with technological tools. This tools allow them to track restaurant KPIs, and know if they have a good business strategy or they should change it.

The most important restaurant KPIs

If you want to start measuring the evolution of your restaurant, you must choose the KPIs that are most relevant to your business. Also, you must communicate the new KPIs to the restaurant staff.

There are KPIs that are easy to quantify, such as the number of sales, raw material costs or cash flow. And others more complicated, such as the quality of the service offered or customer satisfaction. But the KPIs for restaurants that should never be missing are:

Cash flow

It is one of the most important KPIs for restaurants. It is the measurement of the inflows and outflows of money, what determines the profitability of the restaurant. The income must exceed the costs faced by the restaurant:

Total income – total expenditure = cash flow

Number of customers – sales

This KPI is about knowing how many people come to your restaurant during a certain period of time. We must know the least number of sales we need to reach the break-even point and be profitable. Always taking into account the average ticket value and costs.

Average Ticket Value

It is the average income per customer. That is, the average amount of money a customer spends when they are in your restaurant.

Sales revenue / total number of customers = average ticket value.

Increasing the value of the average ticket depends on the customer service offered. Employees are who deal with the clients and can recommend them dishes.

Costs

This refers to all those payments (cash outflows) that the restaurant has to face month by month. For example fixed costs such as rent, electricity, water or gas. Raw material costs, taking into account waste. Labor costs (salaries, staff turnover, training, absenteeism) and marketing and advertising costs.

Of all the costs faced by a restaurant, labor costs can be up to 40% of total costs by the end of each month. Reducing avoidable labor costs (staff turnover or absenteeism) can be the difference between being profitable or not.

Waiting times between services

One of the main reason for customer dissatisfaction are the long waiting times between the different points of contact with them. For example, from the moment the customer sits down and the waiter give him the menu. From the moment the customer knows what he is going to order and a waiter attends to him. From the moment the waiter takes the command and the first course arrives, etc.

In order to avoid long waiting times, impeccable planning is required. It is important to have the perfect employee in the right place whenever the customer needs it.

RevPASH

This is one of the most unknown KPIs for restaurants. Revenue Per Available Seat Hour’ refers to sales over a period of time between available restaurant seats. This indicator shows which time slots have had a higher or lower number of customers. Although it does not assure us that this behaviour will be repeated in the future.

Predicting the future volume of customers is possible, but only through advanced data analysis techniques. Knowing the future activity of the restaurant is very useful for example when planning employee schedules. To always have the perfect number of employees, no more and no less. Avoiding long waiting times due to lack of personnel and high labor costs due to having more workers than necessary.

Staff Productivity

To know the performance of each employee is essential when detecting talent. Also to detect employee needs such as training or a decrease in commitment to the company.

It is important to know in which hours is more productive each employee. To generate schedules according to it, and thus get the most out of the staff at all times. Because employees are not equally productive throughout the day.

Customer Satisfaction

Of course, this is one of the KPIs restaurants are most interested in. To know what has been the client experience in the restaurant, their opinion on the food, on the service, etc. But it is one of the most complicated KPIs to know.

Only web reviews on pages like Google or TripAdvisor can offer some light on the level of customer satisfaction.

Although if you offer an exceptional customer service and have an optimal staff planning, you are on the right way to increase restaurant customer satisfaction. Avoiding long waiting times and employee shortages.

There are workforce scheduling tools based on Artificial Intelligence that can improve each restaurant KPIs mentioned in this article. Through complex algorithms created especially for the complexities of the restaurant sector, they get:

• Increasing sales and the average ticket value
• Reducing staff turnover and waiting times
• Adapting staff and schedules to the future activity of the restaurant
• Increasing employee productivity and customer satisfaction