The 5 Essential Restaurant KPIs you Need to Gorge on Regularly

Posted on 21st February 2017 in Reporting

Written by Ross MacLeod

Forget starters and go straight to mains with our guide to the top five essential KPIs your restaurant needs for business success.

If you want to grow your Cash waistline whilst shrinking unsightly costs, these are the five essential Restaurant KPIs you need to gorge on regularly. So assign kitchen duties to your local rat and grab the nearest fork, it’s time to get business fat.

Average Customer Headcount

Unless your restaurant happens to be a front for the New York Mafia, then without sufficient customers it is doomed to fail. Average Customer Headcount is an engagement metric which measures how many Customers are using your Restaurant within a set window or period. Not only is this a good indicator of your ability to attract cliental, but when coupled with your Average Revenue per Customer, you can use this information to plot out future revenue targets and factor it into your Cash Flow projections – an important step to stop you from joining the 60% of Restaurant Owners whom see their business failure within their first three years of operations.

To maximise staffing efficiency, you can also use Average Customer Headcount to help you plan shift patterns. By identifying peaks and lulls, you can ensure that you have the appropriate number of staff at all times, rather than too few or too many. Find out how to measure Average Customer Headcount in FUTRLI.

Average Revenue per Customer

Once you’ve mastered the art of attracting customers, it’s time to look at how efficiently you are translating that attendance into revenue. Average Revenue per Customer measures how much revenue you are generating on average from those that dine at your restaurant. A high figure should be aimed for, particularly if your Customer Headcount is low or you’re targeting niche cliental. Whilst a lower figure can be acceptable if you’re prioritising volume and have the Customer Headcount to justify it, this may indicate problems in pricing strategy or with your menu itself, which require further investigation. Find out how to measure Average Revenue per Customer in FUTRLI.

Dry and Wet Sales Gross Profit Percentage

Even when your restaurant is fully booked and your customer reviews are glowing, your profits may be being eaten away due to low, inefficient profit margins on the items you sell. By monitoring your Dry and Wet Sales gross profit percentage, you can stay abreast of how much of a return you are actually generating from food and drink relative to your costs. Even better, if you’re a QBO or Xero user and have applied Classes or Tracks to your data, you can take advantage of FUTRLI’s Tracking Cards to drill down further into the detail.

Low gross profit indicates that you are struggling to eek a profit from the item or items your selling, whilst a negative figure means you’re actually making a loss. In either scenario, you should consider increasing the price you charge per item and whether cost reductions could be made to boost your margins. Find out how to measure Dry Sales and Wet Sales gross profit percentage in FUTRLI.

Wages to Sales

Another key variable which can impact your profit margins is the amount you spend on wages. If your balance of Wages to Sales is disproportionate, then several bad Sales months in a row could drain your cash reserves and seriously impact the future security of your business. To mitigate against this, it’s important to both measure and manage salaries relative to the revenue that you’re generating, as well as factor in how future changes may alter this KPI. When planning to expand your workforce for example, we recommend that you use the forecasting powers of FUTRLI, in order to map out how additional staff may impact upon your Wages to Sales in the short, medium and long-term, rather than hiring blind. Find out how to measure Wages to Sales in FUTRLI.