Restaurant Key Performance Indicators, Part 3

One Fat Frog Restaurant Equipment knows that the old adage “you can’t manage what you can’t measure” still holds true today. Whether you are just opening a restaurant start-up or you are an established business, you need to be able to quantify key elements of your business, so that you can measure the relative success of each component. That way you can successfully accent the positives and reduce the negatives – the key to being a successful manager.

With that in mind, One Fat Frog continues our series on Key Performance Indicators (KPIs) in the food service industry. KPIs are quantifiable measurements that reflect the factors that you have deemed crucial to the success of your business. In order to accurately follow them, you will need to collect data (measurements), determine how they’ll be described as a standard (metric), and compare them to a benchmark in order to evaluate your progress.

KPIs are different from business to business, and will depend on many factors. Some common ones for the restaurant/bar industry will be looked at here. For a nearly exhaustive list, check out the KPI Library at http://www.kpilibrary.com. With those in mind, make up a list of KPIs that will be the most useful to you.

Today, we will look at some Staff indicators:

1) Total Labor Cost: This is the most important factor, as labor costs are one of the biggest expenses your restaurant will incur. Like total food costs, they should be somewhere around 25-35% of your total expenses – any higher and you may need to take a very close look at the number of employees you have on staff. Remember to include all labor expenses here – wages, benefits, insurance, retirement, and bonuses.

2) Labor Hours: Comparing the total hours your employees work to your sales will give you a measure of your staff’s efficiency – i.e. the amount that your business takes in per staff/hour.

3) Turnover: Dividing total number of staff positions by total number of people you have employed over a certain time period (a month, for example) will give you your turnover rate. For instance, if you have 12 positions, and have employed 20 people over the last quarter, you have a 60% turnover rate (12/20 = .6 = 60%). Turnover is a natural part of operating any business, and turnover rates in the food service industry tend to be relatively high, but low turnover is better for business, so knowing just how high your rate is can allow you to implement necessary measures to limit it.

One Fat Frog Restaurant Equipment wants all of our customers to succeed. That is why we offer such amazing benefits with all of our used restaurant equipment – free delivery, free custom paint jobs, free cutting boards with all used prep tables, free gas conversion, in-house financing, 30 day warranty on parts and labor – the list goes on and on. Nobody in the area even comes close to our selection, prices, and – above all – customer service.

If you are even considering opening up a bar, restaurant, food truck, or anything else in the food service universe, call or come by the store today. Let us help you get your dreams in motion.

One Fat Frog Restaurant Equipment

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