May 03

The numbers game: How to measure the performance of your restaurant or cafe

Whatever business you’re in, its success can be broken down into ‘key drivers’ and Key Performance Indicators. KPIs measure the key drivers that produce your business’ performance. Knowing your KPIs lets you compare where your business is now to where you expected (or hoped) it would be.

Key drivers can help determine how your business is performing.

Every business is different, which means the KPIs you come up with for your business will be different to everyone else’s. But all industries (including the restaurant and café industries) have some ‘rules of thumb’ you can use as a starting point.

It’s important to know not only your key drivers, but also how to measure them and make sense of the results. The numbers are telling you how your business is doing, and by knowing what they mean you can make decisions to improve them.

5 KPIs that restaurant and café owners need to know

For example, as a restaurant or café owner you need to know:

  1. your weekly break-even turnover
  2. the number of covers you need each week to reach minimum turnover
  3. the average amount each customer spends
  4. your target gross profit margin
  5. your wages as a percentage of your turnover (a really important one to monitor and manage).

When you know what the numbers are (and what they really mean) you can use them to make decisions when it matters, rather than leaving it until it’s too late.

When a business is struggling, we often find the owner doesn’t really understand what is driving the business’ performance. They operate on gut instinct, and aren’t even sure why they’re doing it that way.

A common trait of struggling businesses

Another trait of a struggling business is the bookkeeping system not being up to date. The bookkeeping itself isn’t given a high priority, and in a best-case scenario is done every quarter just to meet GST and ATO deadlines.

Bookkeeping shouldn’t be a necessary evil you only complete because you have to. It’s a tool you can use to keep tabs on how your business is doing. Just imagine the decisions you could make if you knew:

  • your weekly sales, broken down between food and beverages
  • the number of customers you serviced
  • the cost of inputs compared to your sales as a percentage (your Gross Profit Margin)
  • your weekly wages as a percentage of your sales
  • how much money you owe
  • what you paid out compared to what you took in.

This is the kind of information good bookkeeping can provide. And with that information you can make decisions before the damage is done.

If it all sounds too complicated, don’t worry. We can help set up a monitoring service that tracks your business’ performance against monthly targets, and gives you the real-time data you need to make sound business decisions.

Get in touch with us today, and let us help you meet (if not exceed) your target KPIs.