Manage by the Numbers - what Reports can do for You
January 25th, 2009
Why do You feel better in some restaurants, than others? Is the thermostate set perfectly? Is it the decor? The friendly staff - how come everything feels right? Even the menu seems to offer only items you love. None of the overload you find on so many menus, that make you wonder, how they can manage the inventory and keep everything fresh and available at all times.
A thought-provoking thesis: maybe these restaurants are managed by owners, who know what numbers to look for in the reports, their Point Of Sale and other ’systems’ generate day in and day out? I work with onePOS, which is capable of sending relevant reports at a set time to an i-phone or blackberry automatically.
One of the most successful business men once told me “You cannot run a business successfully without meaningful information, delivered frequently and systematically”. He knows. He ran one of Europe’s largest coffee roasters with sales of over half a billion dollars. They sell to restaurants only. He knows a lot of successful restaurants and hotels.
In my years as CEO of Best Western Germany I worked with over 100 hotels and their owners and management. I learned valuable lessons about restaurant success formulas. Information quality is critical for quality decisions. Typically a place with more success had better management, and that meant a higher focus on analyzing data, learning from it and then taking the action to change things around.
It was at that point in my career, I had a revelation: the more successful a business is, the better it understands the cycle of management: analyze (information), strategize, execute and analyze… the very successful ones understand how to extract relevant information, digest and act upon it. I realized the value of good reports. Do you have good, meaningful reports for your restaurant?
How does that work in a restaurant: well, what does the owner know about “their guests”? What sells and what doesn’t sell? When does it sell? I once met the General Manager of a hotel who could tell plus/minus a quart how many quarts of ice cream he would sell by each degree of outside temperature. He had discovered a co-relation between the sale of items and the outside temperature. Soon he began to search for similar values to help him forecast his staffing and prepping for future days of business. He understood the value of managing by numbers…
I admit, this is maybe an extreme, yet interesting example. It reveals though, why it is useful, to keep a record of weather and temperature on every day of business. Well, what are some more mundane, more basic reports each restaurant owner should study frequently:
Well, of course the sales report. Maybe an idea - instead of using just a daily sales report may be to compare same days of business, like series of Mondays or similar month in previous years. One of my convictions: I believe that numbers are more meaningful, if they are not absolutes but comparatives. The regional manager, who compares 15 stores, identical in size and menu mix, may have more meaningful information, than the single operator. Anyone interested in building an exchange group where we compare key numbers for independent restaurants? Email me, if that’s an area you’d like to work on. My firm belief:
Metrics are more meaningful if they are derived from more than one store. Example: food cost in a pasta and shrimp restaurant is 23.5%. What do you now know? Would you know more, if you had a few similar restaurants, sharing their key-metrics with you? If that’s something that interests you, please email me. In Europe data exchange groups are very popular. By comparing with other restaurants one can identify areas of improvement.
The next critical question: how can you translate these numbers into actionable information? What are co-relations? What are $$ averages, such as guest-, check- and table average revenues corrrespond with the food cost %age? Analyze your numbers and you will find the specifics for your store. Clearly an advantage, if a chain restaurant is monitored - each and any number can be compared with comparable stores of the same brand.
OnePOS Restaurant POS offers close to 200 reports and they can be customized and emailed to the operator anywhere in the world. This article will begin a series of better information posts on this blog. Please share your experience and opinion with others. Thank You!