KPIs and Dashboards: Measuring What Matters for Your Restaurant Company
Nobody does business quite like you—and you’re proud of it. From offering an unparalleled dining experience to exploring unique lines of business, you’re always looking for new ways to grow your restaurant company. To keep your business on fast forward, it’s vital to track the financial and operational performance of your company. Consider, for example, the numerous key performance indicators (KPIs) that are critical to measuring how your performance stacks up against key business objectives.
“Knowing what’s working in the business and what’s not allows leaders to take immediate action, rather than waiting weeks for any real business insight,” says Rob Reid, managing director and executive vice president of Sage Intacct. “Having real-time KPIs allows an organization to make decisions at the point of need for improved results. The difference between a three-day financial close and a three-week financial close may be the speed advantage a company needs to capitalize on a new opportunity and beat the competition.”
What makes a good KPI?
Robert Ancill, CEO of The Next Idea Group, says an effective KPI must be:
- Applicable to the line of business.
- Factually generated through data-based channels (e.g., POS)
- Thoroughly communicated throughout the staff.
- Crucial to achieving the goals.
No matter how one-of-a-kind your business is, there are KPIs universal to the restaurant industry. Some KPIs that Ancill recommends tracking include:
- Staff and employment KPIs: Wage cost as a percentage of sales, total labor hours, and average hourly pay.
- Kitchen management: Food and beverage (cost of goods) cost percentage, food costs per head, and best- and worst-selling items.
- Front of house/restaurant management: Total sales per head, number of customers, and seating efficiency.
- Finance/administration management: Cash position at the bank, total accounts due, total accounts receivable, taxes owed, and labor costs.
Satisfied customers, satisfied bottom line
Customer satisfaction is everything—especially in today’s hyper-connected world. Intouch Insight, which sells customer experience management solutions, notes the importance of linking business KPIs to customer experience metrics and lists several KPIs essential for measuring customer experience success in the restaurant environment:
- Overall customer satisfaction (CSAT), which measures how well a product or service meets customer expectations.
- Online ratings (review sites & social media)
- Time per table turn (TTT) and table turnover rate (TTR)
- Average transaction size and upsell rate
- Speed of service
- Customer retention
- Net promoter score (NPS), which is a globally recognized benchmark for measuring customer loyalty.
- Employee turnover, retention, and satisfaction
Reporting, dashboards, and your KPIs
Of course, the most critical KPI is how well your restaurant accounting software delivers key performance metrics like those listed above. Best-of-breed solutions, such as cloud financial management software from Sage Intacct, offers easy, intuitive financial dashboards that give a quick, accurate overview of your operational and financial performance.
These dashboards allow you to bring information that matters to the forefront. Highly customizable, your dashboards can include:
Performance cards. These are summaries pulled from account groups, which include more than groups of financial accounts. You can also summarize operational information, like numbers of employees or billable hours. Account groups can be calculations, like revenue per billable hour. They can be filtered just to show a particular location, department, or other dimension—whatever you need.
Charts and reports. These visualizations show and explain financials to key stakeholders. Because different types of data have different visualization requirements, you can choose the method that makes the most sense for the data. For example, consider bar charts to compare locations side by side, a line chart to measure progress over time, or the donut chart to see the impact of certain dimensions on the business as a whole. Each visualization tells a big-picture story while still allowing you to drill into the report and the transactional details behind the chart.
You can design dashboards for each member of your finance team to help them in their specific roles. And, of course, you can perfect your dashboards over time, as your business grows and stakeholders provide feedback on what they want to see.
Ready to start getting to the metrics that make your business thrive? Speak with the restaurant technology and finance experts at Tablespoon today.