Key Performance Indicators for Restaurants

KPI’s for Restaurants

Posted on: October 27, 2009

Key Performance Indicators (KPI) reflect the demanding success factors of an organization. There are different KPI measures for each type or business/organization, for example: for a high school they might measure the average rate of graduates of their students.

I’m going to talk about different KPI’s that you could have when managing a restaurant to continue progress and reach your wanted goals.

When selecting key performance indicators it is important to make sure you choose the right factors to the essential goal that you would like to reach.

Start with what you need to measure, here are some examples:

  • Personnel Management
  • Customer Satisfaction
  • Market Assumptions/Marketing management
  • Environmental analysis
  • Competitive analysis

To measure these you could use the following:

Key Performance Indicators:

Staff (employee turnover):

This would be measured my taking the number of employees who have retired (plus) the number of employees terminated (divided by) the numbers of employees that you hired at the beginning of the year.

This will give the employer an idea for if he/she is gaining or losing employees.

How to prevent employee turnover

  • Motivate employees
  • Continual training
  • Reward/incentive programs
  • On-going performance management

Customer Care:

Cost of Services per customer-

  • Rate = total cost of service / total customers
  • This lets you know how much the investment cost for the customer care is. With this you can compare the rate with the rate of direct competitors ro analyze if it is reasonable/accurate or not.

Number of Customers:

  • This is a good/important source to measure. It gives you the ideal amount of customers that your restaurant is bringing in. If it is a low amount, this is your opportunity to test out the market and get your business on the map. You can either do this by observing how many costumers walk through your door or by looking at your average sales for the week/month to see if you need to increase these numbers.

Market Share:

Market share of the company compared with the entire market

  • The percent of the sales turnover of the your business compared with the sales of the entire sector.

Market Share

  • You can find this by taking the companie’s total sales revenue (divided by) the total sales revenue available in the market. Another way would be, the company’s total unit sales volume (divided by) the total volume of units sold in the market.
  • This is the comparison about sales turnover of the business with that of the competitors strongest. It lets you know your position in the market.

This gives you a little idea about what Key Performance Indicators is and how you can measure it. There are a number of ways to measure performance in a business. Depending on you business and where you are at in the industry you will most likely have different key measures, though these are three of the main indicators you could use to get an understanding at where you stand and how to reach the goals that you want to.

Problems with KPI:

Overseeing KPI’s can be an expensive and difficult situation for a company.

Another issue would be that once an indicator is established, it is sometimes challenging to adjust to those issues that need to be changed because the authentic data might be lost along the way.

Another, is that these indicators or based on your companies practices and it is sometimes difficult for the company to compare itself with similar businesses. Though there are always way to figure out these difficulties by using statistics and other forms of benchmarking.

The Key Performance Indicators are a rough guide, instead of a precise one.


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