The fact that measuring performance makes managing easier holds true even for the hospitality industry. If you are a restaurateur, then to manage your restaurant it is essential to define the right metrics that will help in putting efforts in the right direction. Well, it should be noted that the success of a restaurant depends upon an efficient back-office and efficient performance management. The system that takes care of the financial information and ensures that the restaurant is making enough revenue to cover the expenses is what performance management is all about. For every restaurant owner, it is very much essential to be aware of the business’s financial health and ensure that you are not running your business blindly. Understanding the finances allows one to understand how the business is fairing in the market and take on challenges that come in raising income for the business.
Quantifiable Business Metrics for Performance Management
- Tracking Cash Flows
Keeping a note of the cash flows can help in planning and forecasting the needs of the business. And also permits the introduction of products and services that meet the needs of the customers better and enhance returns. This gives a clear impression of the financial health of the business.
- Controlling Prime Costs
Prime cost is regarded as one of the key performance indicators of a restaurant business. This basically represents the cost of goods sold and the labor costs. This cost basically helps in managing the daily revenue of the restaurant. This is also great for calculating the amount of money that you can spend on running your business without compromising it.
- Tracking Inventory
Keeping a track of inventory and the cost of goods sold is very much essential to reducing food waste, budget mismanagement, and theft. Inventory tracking helps in identifying the ingredient stock count, current purchase orders, and the amount of money spent on purchasing the ingredients.
- Keeping a Track of Restaurant Expenses
Keeping an eye on the types of payments made periodically and the payments made continuously throughout the life of the restaurant business such as food costs, beverage costs, and labor costs, can help you identify the restaurant expenses i.e., the money you spend on your restaurant. To evaluate the expenses, one needs to have a proper record of sales, orders, payroll, inventory value, etc.
Managing the finances can be one of the hardest parts of running a restaurant. And identifying where the business is lacking is a tough nut to crack. But all this is possible when you have professional guidance just like the experts at Enterprise Restaurant Consulting. At ERC, we can review your profit and loss statements and help you to dig deeper and uncover the problematic areas. We further help restaurant businesses to develop a plan to fix those bumps. Feel free to reach out to us via our telephone no. i.e., 1-647-209-4153, or visit us at https://erestaurantconsulting.ca/, and let us bring your restaurant business on the right track.