Managing a Restaurant is 50% Numbers

There is a saying in the restaurant business “Managing a restaurant is 50% numbers”.  What do I mean by this? Each day you are accumulating financial data. Whether it is (Sales, Cost or Expenses) you should be constantly looking for “Red Flags” or other indicators that allow you to see where the problems are located.

Most restaurants have bookkeepers and/or an accountant and create a monthly P&L.  This is the minimum. It is just the tip of the iceberg.

Numbers are all around you.  The three most important numbers for sales and key performance indicators are Net Sales, Customer Count and Check average and then the most important numbers for cost control is the Prime Cost of a restaurant . Food, Beverage and labor cost.  There there are also other numbers

Number of menu item sold, number of covers per seat, revenue per seat, labor per seat

I can go on and on with other numbers, number of employees, employee sales per hour etc.

This is all well and good but numbers are not useful unless you do something about them and in a timely manner.  You do this by creating reports in this this order, Weekly Prime Cost report, Weekly Operating Cost and then a Monthly Profit and Loss report.  Operational reports for sale and marketing this is where the number of customers and check average ant then break the sale down by meal periods (Breakfast, Lunch and Dinner) again all of this information is available to you from you POS System and your bookkeeper, again what you do with these report is up to you.  Don’t wait until it is too late.

Two things about reports, the integrity and timeliness It does no good to be working on reports from last week or if you get your P&L in the middle of the following month.  The reason tor timeliness is to enable you to make decisions immediately, (Mid-course correction) without current reports they  are worthless. Remember what is important.  Quality food, service and healthy numbers.

Also knowing industry benchmarks is critically important to today’s restaurant owners and managers. The internet or your trade magazines have this data. It is   handy when analyzing your restaurant performance. These rules of thumb are important.

Kenny Arone is a restaurant consultant and partner in Cost Genie Menu Costing Software.






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