Running restaurant operations smoothly is challenging. Getting time to focus on what is important and not just dealing with emergencies is half the battle. There are lessons to be learned from the ways other industries deal with this constant lack of time. Let’s see if we can learn from them.
While doing research to write this post, I found out that much has been written about Key Performance Indicators (KPIs) but little about how you get to define the ones you care about. Sure, we have some obvious ones - such as Cash Flow or Food Cost - but, as with any journey one undertakes, knowing the destination is essential in order to define the roads on which one will travel.
Now you can decide which KPIs you want to track. KPIs will help you measure and monitor your progress. Each SMART goal should have at least one KPI linked to it. These are some suggested examples of goals and their related KPIs.
Lilly owns a small restaurant/coffee shop in a little country town. Some customers come in the morning and stay all day while drinking only a few cups of coffee. They occupy a table without bringing much revenue, and other guests have to walk away. Lilly’s SMART goal is to improve table turnover by 20% before the end of October. After deploying different measures in her restaurant, she is tracking the following KPIs to measure her success:
- Table turnover rate
- Revenue per available seat hour (= total revenue/(available seats x opening hours)
Becca runs a busy place in the suburbs. She frequently sees large tables with few guests, while small groups patiently wait in the lobby. She feels that she is leaving money on the table by not optimizing her space. Her SMART goal is to augment the seating efficiency and hopefully reduce waiting time by 10%. She will track the following KPIs:
- Seating efficiency
- Average wait time by party size
Paul manages a very nice high-end restaurant in the city. The menu changes daily and he lets his chef design it, but Paul is concerned that he is losing money on some days. His SMART goal is to get a steady 3% profit margin for his restaurant every day. After talking to his chef about his concerns and asking him to remedy this problem, he is monitoring the following KPIs:
- Profit margins
- Food Cost: Cost of Goods Sold measured against Food Sales
by Marylise Fabro
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