Cost

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Key Numbers To Watch In Your Restaurant Business

To build and maintain a successful restaurant business, you need to constantly keep your thumb on its pulse and know how fast its heart is beating. You need to be checking the key numbers.

Obviously, your cash registers and your accounting system will provide you with some very important information. That's the good news. The bad news is, knowing how you did last week or last month may not be a very good indicator of where your restaurant sales will be next week or next month.

Any type of financial data that you can get from the accounting system is known as "lagging" indicators. These indicators tell you what happened. They won't tell you much about what is about to happen. However, they are still important.

Here are the most important numbers you need to monitor:

* Weekly sales, total per week/day and also by the hour (you can then create a simple Excel chart and see weekly and daily peaks and valley and also be able to identify over-staffing & capacity issues)

* Weekly profit (Many restaurant owners mistaken "gross" for "net" and assume that the more gross you have the more money you make. Well, as the song goes, "it ain't necessarily so.")

* Weekly payroll

* Product group contributions (the percentages of your total sales attributed to drinks, entrees, appetizers, and desserts)

If you manage your restaurant business by relying just on the lagging indicators, you could be looking for trouble. It's akin to driving a car by looking in the rear mirror all the time.

If you want to have a way of predicting how your restaurant business is going to do in the near future, you need to implement and track a few "leading" indicators.

* The total number of VIP Club members

* The number of new VIP Club members added to the list over the last period

* The number of Birthday Club members on the list

* The number of catering sales calls made (if you do...