Food Beverages And Hospitality October 2018

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Restaurant Performance: The Vital Statistics of a Restaurant Operation Restaurant Performance Snapshot Your restaurant operation is affected by many key elements which is call the Profit Triggers. These triggers impact your restaurant performance in a big way. In other words, these profit triggers contribute to your restaurant revenues, profits and related indices in a major way. This blog post will look at four major categories of performance indicators for your restaurant operation which you must absolutely be on top of. A Restaurant Performance Snapshot format is also provided which you can download and customize for your needs. The four major categories of performance indicators for your restaurant operation are: 1. Performance 2. Revenues and Profitability 3. Statistics 4. Forecasts Performance Performance is the first major category for your restaurant operation. It refers to how your restaurant fared compared to the market in which you compete or operate. It begins with knowing the revenue share of your restaurant versus the market. In short, this is knowing who your competition is. the competition so important If you operate in a particular competitive set, it is evident that decisions that you take on pricing, quality, presentation, products and services will impact not just your results but also that of the 24 Focus Food Beverages & Hospitality | October - 2018 | www.kingsinfomedia.com
| | Statistics While performance versus competition and revenues and profits are major categories, knowing the price and volume elements of related performance indices is critical. competitive set. So, knowing where you stand versus your competition is key. Performance can be seen from the point of view of market segments of your restaurant outlets and the catering operation. Generically, the catering is the most profitable operation in the food and beverage business. Results can be tracked both from a revenue perspective as well as covers served which indicates volume. Revenues and Profitability Revenues are the foundation on which any restaurant (or for that matter any business) operation rests. Understanding your revenue behavior from the perspective of actuals, budgets, last year allow you to make comparisons of business results and indicating where you stand. Knowing whether you are growing or not in your revenues over time is critical to sustain the operation itself. If revenues are the foundation of your restaurant operation, then profitability is the very reason for survival and earning a good return on investment for your owners. Profitability is what sustains the restaurant operation and injects vital cash flow to run the business. It is often said in the hospitality industry that if there is no top line, there is no bottom line too. Owners are constantly looking for sustainable profits to continue running the restaurant operation. In measuring profitability, knowing how your food costs, labor costs move is critical to know. These are the costs which actually dictate what profits you are able to retain from the revenues you have earned. See below Restaurant Performance Snapshot for the elements of the performance category. Here is where knowing how much of your restaurant results is coming from the occupancy of the hotel (for a restaurant operation within a hotel), how much of your guest patronage is in-house and how much non-resident, knowing what your overall average check is are indicators that allow you to take decisions in the right direction in the pursuit of budgets and targets. Most times, the direction in which the statistics are headed can clearly point to what is happening to actual revenues and profits. So, keep a sharp eye out for indications of drop in volume or growth from these elements. See attached Restaurant Performance Snapshot for the elements of the performance category. Forecasts While the measurement of revenues and profits during the current month and year-to-date is important, however, depending upon the month of the year you are presently in,knowing the big picture for the entire year is crucial. For example, if you are in the month of March 2015, knowing what happened to your performance during March and year-to-date for three months is important. However, you must also know what your forecast for the entire year is indicating. In a way, you are using three months actuals and projecting nine months of forecasts which completes the picture for the full year performance. Forecasts need to be measured, actioned upon and monitored both for revenues and profits. See attached Restaurant Performance Snapshot for the elements of the performance category. Conclusion Your restaurant is a complex business operation. Keeping it on a path of revenue and profit growth is key to survival and competing in the environment you are in. www.kingsinfomedia.com October - 2018 Focus Food Beverages & Hospitality 25
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Food Beverages And Hospitality October 2018

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