Revenue Per Available Seat Hour, or RevPASH, is an extremely important metric. Understanding this will help you work out how well you’re using your available seating to maximize income during operating hours. It reflects the revenue generated per seat per hour and gives insight into which hours are most profitable and where improvements could be made. By monitoring RevPASH, restaurateurs can learn when the best times are and can then focus resources on ramping up the rates of turnover for those restaurants during less busy times. This metric will provide valuable insight into making good decisions on promotions, pricing, and staff scheduling to maximize profitability per seat.
Average Check Size
Average check size is a measure of the average amount customers spend per visit and is another key indicator of sales performance. This will allow you to monitor the effectiveness of your menu pricing and if there is any further opportunity to increase guest spend. For example, if your average check size is coming in lower than projected, you may want to start offering upsell opportunities like drink pairings or desserts. Have your staff train to offer upsell items with high margins in order to help increase the average check size and therefore increase revenue. It gives an idea of monitoring this to ensure you are using that visit from each customer as much as possible towards cash.
Cost of Goods Sold
Cost of Goods Sold essentially gives an idea on what percentage of generated sales goes to the producing and preparing of menus provided.
Tracking of the COGS simply gives an idea if your food costs agree well with the prepared budget so it would look at where to bargain with vendors, and even the recipes or preparations in case there is a lack in profitability. High COGS can easily eat into the profit margins, and this is a metric that one should be keeping a regular eye on to act proactively to keep the costs under control. Other ways of managing COGS are portion control and minimizing food waste, which in turn keeps your finances healthy and sustainable.
Labor Cost Percentage
Labor cost percentage is the critical metric comparing labor expenses to total revenue. Labor costs for a restaurant business may greatly fluctuate depending on things like scheduling, employee turnover, and even seasonal demand. It will give you insight into whether or not you are overspending or underspending based on the income that is coming in, therefore allowing you to make the correct changes. With this metric, you would be able to manage labor cost percentage by assigning the shifts more efficiently and avoiding the overstaffing of people during slow hours. A tablet POS system automates scheduling and clock-in, which enables precise tracking of labor hours so that extra hours can be avoided.
Table Turnover Rate
The table turnover rate is defined as the number of times tables can be occupied by new customers during a certain given period. Usually, it is observed on an hourly basis. The greater the table turnover rate is, the better it reflects on your restaurant that it is well situated to handle your guests and utilize its seating capacity to the maximum, thus earning more revenue. By measuring the table turnover rate, you can locate where service bottlenecks are holding up service and not maintaining necessary profitability. With employee training, seating customers in a timely manner and attentive service during their dining will also improve this rate. The goal is to serve more guests with less sacrifice in quality.
Customer Retention Rate
Customer retention rate is another helpful metric to know how many customers return after the first visit. High retention often results in excellent service, quality food, and a memorable dining experience.
Loyalty customers bring huge revenues since they spend most of their time there and may invite other customers; thus, making the business more profitable. By tracking this, you can ascertain how your loyalty programs work, and other initiatives to engage your customers. Everything done to retain the customer, like giving special deals to customers who are coming back time after time, will aid in long-term profitability and a solid revenue base.
Customer Satisfaction Score
Customer satisfaction is perhaps one of the most potent indicators about the performance and reputation of any restaurant. Feedback from surveys or online reviews gives you insight into the aspects your restaurant is doing well in or needs to improve in. High satisfaction scores reflect a meeting or exceeding of expectations, whereas low satisfaction scores call for attention towards areas such as food quality, service speed, or ambiance. By regularly monitoring this metric, you will be able to address such issues proactively before it starts to affect business. Positive feedback often means high retention and better word-of-mouth.
By monitoring the key metrics in restaurant management, owners can make well-versed decisions for better profitability and satisfaction of customers. Metrics such as RevPASH, average check size, COGS, labor cost percentage, and customer satisfaction are powerful tools; they underpin strengths and areas of attention. Indeed, the owners will be able to enhance operational efficiency and reduce costs by closely watching these indicators with their responses to foster long-term growth.
