In the restaurant business, the most reliable teller of success is your operation’s sales and financial data.
Gut feelings and lucky guesses alone don’t build successful restaurants. Rather, these businesses are grown on their owner’s ability to apply basic data analytics into their day-to-day decision making. Understanding your restaurant’s most important metrics – and, how you can positively impact these numbers – can help ensure the long-term financial health of your business.
Using data insights is the smartest way to manage and strengthen your restaurant’s financial position. With the right systems and measures in place, you can start collecting data to boost guest satisfaction, increase staff efficiency, and improve your profits. In this article, we’ll explain exactly how, step by step.
- First, Identify Where Your Data is Coming From
Ensuring you have access to organized data is essential for any business operation.
Modern restaurant management platforms are fairly good at providing you with snapshots of your operational performance (albeit, sometimes independent of your other systems). So, the more top-down view you can obtain of the financial and sales data your operation produces, the more successful you will be in the stages to come.
Begin by identifying all of the systems and tools throughout your restaurant which actively capture the most important business and financial metrics. Sales and inventory are huge ones, but just as critical to the whole are your expenses and staff-related costs. For example:
- Your order and sales data may be captured through a point-of-sale system, but also a third party online ordering platform.
- A guest management platform can measure table turnover and your daily queue time.
- A staff management platform can report your labor costs and staff on-hand.
Nowadays, integrations across systems are more than common. Wherever possible, integrations simplify the number of different systems that need to be checked manually, thus saving you and your management team tremendous time.
2) Choosing the Metrics That Matter
With the right data inflows chosen, you can begin to identify the types of financial data which are most important to you and your operation.
Where you start digging might depend on what hunches you have. For instance, have you investigated your sales data deeply before? Or, what expenses might you be trying to keep down? With your data, you can either confirm or dismiss any initial hypotheses and thus prioritize where you can focus your efforts of improvement.
For tools already at your disposal, like an existing POS system or online ordering interface, familiarize yourself with these platforms’ financial reporting capabilities. If possible, opt-in for weekly or monthly email communications so you regularly receive insights into your business’ financial performance. Even for those venturing into data analytics for the first time, this will help you keep your restaurant’s performance data top-of-mind.
3) Select a Timeframe
One quality of “good” data is the time over which it has been captured. In other words, it’s enough to establish a reliable baseline for actionable insights.
Given the high transaction volume of restaurants, it’s a good habit to set aside time and look at your metrics at least bi-weekly. This cadence can help you identify trends in your financial or operational data as they develop, and take swift action as necessary.
At a longer timeframe, like monthly or quarter, an additional good practice is to meet as a leadership team and discuss higher-level business performance. If you work closely with a management team or other stakeholders, make them aware of the cadence at which you would like to begin meeting regularly to discuss your operation’s data.
With all your necessary stakeholders aligned, you can begin to build momentum as a forward-thinking, data-driven restaurant operation.
4) Taking Data-driven Action
With the right measures and expectations in place, you can start looking into trends which can be the basis for data-driven goals you set.
For instance, perhaps you want to reduce inventory costs by tackling the challenge of food waste. This would entail looking at your historical data to compare 1) your inventory levels with 2) your order and sales per dish. Among the dishes with the widest gap between inventory cost and sales (and after accounting for any seasonality variables), you can begin to save by reducing unnecessary inventory expenses – in other words, purchasing inventory levels that are slightly closer (but not running the risk of borderline) to your actual sales of the items.
Another challenge might be optimizing your staff allocation and cost. With the help of your POS data, you can identify the peak periods for your location’s number of transactions. Perhaps this is dinner, or maybe the midday lunch rush. By understanding your location’s exact customer flow throughout the week, you can be better equipped to avoid instances of overstaffing and unnecessary costs.
The key: seek to build traction gradually. Make calculated changes to your operation and see if the desired results are achieved. Over time, as you become more accustomed with taking in and applying data insights, this will become more natural and increasingly rewarding as a forward-thinking business operator.
Conclusion
To harness the power of data for your restaurant, you need to act methodically. That means taking the time and making the commitment to grasp the full financial perspective of your location’s day-to-day.
Traditionally, restaurant data analysis has required a fair amount of detective work, especially when that data is scattered across numerous systems. That’s where a platform like ONEBIT makes all the difference. ONEBIT helps restaurant owners uncover those “needle in a haystack” insights and receive advice on exactly what to implement for better outcomes.
Having a firm grasp on your sales and expense data helps you become a better decision maker for your business. Particularly in foodservice, where margins are razor thin, this can positively affect the overall trajectory of your business, and unlock new opportunities for you as a business owner and entrepreneur.