Are you setting short-term and long-term financial goals for your restaurant? Learn how with these goals and examples.
As a restaurant owner or manager, how many hours a week do you spend exporting and updating Excel sheets to gauge the success of your restaurant?
And when you finally have the numbers and you’ve determined your key performance metrics (KPIs), do you set data-driven restaurant goals down to the year, month, and day? Or do you look at all of the numbers on the sheet and say, “Well, my restaurant is earning money, so I must be doing something right,” and call it a day?
The truth is, restaurant numbers can tell any story you want them to tell. But in order to tell the right story and set yourself up for success, you need to set short-term and long-term goals. By doing so, you can dive into the good, the bad, and the ugly of your restaurant sales and menu analytics.
With the right restaurant analytics platform, you can even drill all the way down to the extra cheese option for your nachos to easily determine exactly which parts of your business are boosting your profits and which need improvement — instead of spending hours grappling with charts and pivot tables to get the same answer.
7 Examples of Short-Term and Long-Term Restaurant Goals
Here are seven examples of short-term and long-term goals for restaurants that you can set to improve restaurant KPIs like net sales, labor cost percentage, and more.
- Increase Monthly Net Restaurant Sales
Net restaurant sales might be the most important metric for your business. It’s the foundation for all of your restaurant analytics. In fact, your restaurant’s success — and your investors’ success, if applicable — is wholly dependent on this number.
Net sales equals gross sales minus discounts, and it can be a pain to calculate every day if you’re stuck rifling through yesterday’s receipts. If you’re able to access that number from anywhere at any time through your restaurant analytics platform, you can focus less on finding those numbers and more on increasing those numbers.
Depending on your restaurant’s historical data, location, and what you know about how seasonality affects your restaurant, you should set goals for your net restaurant sales to increase month over month. Check out this helpful guide to learn how to analyze and improve your restaurant's sales numbers.
- Increase Daily Net Restaurant Sales
Sometimes it’s helpful to zoom in a bit and see a daily snapshot of your net restaurant sales. It can help you see what promotions are or aren't working and figure out where you can lean in and give sales a boost.
Here’s an example: A restaurant ran a weekend promotion on December 14 and 15, and as you can see in the graph above, it brought in the majority of sales for the month. Without that promotion, they may have seen an average net sales per day of approximately $3,000, but now they’ve brought that number up to approximately $5,000.
The promotion obviously improved sales for this restaurant, so they might want to add it to their playbook to run once a month or quarter.
- Improve Employee Productivity (and Decrease Risk of Theft)
Restaurant sales data can also help you decide when to staff up and staff down, saving on prime cost and labor cost.
For example, the restaurant example in the graph above is busiest between 2 p.m. and 3 p.m. on Thursdays and Fridays. This means they should staff their highest-performing employees at those times to improve labor cost percentage.
Restaurant sales data can also help you catch suspicious or questionable transactions. In the example above, it’s telling that there are sales transactions happening between midnight and 6 a.m. Is the restaurant even open at that time? If you notice that there are transactions going through the system during off-hours at your restaurant, you may want to see who was staffed around that time and dig into the issue to prevent or address any theft.
- Improve New Revenue Streams
According to the 2019 Restaurant Success Report, 77% of diners marked loyalty programs as “Somewhat Important” or “Very Important” to the guest experience. And 59% marked gift card programs as “Somewhat Important” or “Very Important.” So, newer revenue streams like these can significantly contribute to growing your guest base.
The restaurant example in the graph above had 70 transactions via gift cards, which is 6.4% of their total transactions. But those gift cards only brought in 4% of total sales.
To improve gift card sales, you could start a fun, incentivized competition with your servers to see who can sell the most gift cards over a certain time period — with the goal of increasing the percentage of gift card transactions and sales.
- Improve Your Top-Selling Items
If you’re familiar with menu engineering — a way to evaluate current and future restaurant menu pricing using restaurant data to influence design and content decisions — you know the “stars” of your menu are your most popular and most profitable menu items.
The analytics dashboard pictured above provides a breakdown of which three menu groups, menu items, and menu modifiers are most popular. Once you know which of your menu items are your “stars,” you can then focus on getting them in front of more guests.
But if you don’t currently have access to a helpful analytics dashboard like the one pictured above, you can do menu engineering the old-fashioned way — by digging into food cost percentage, contribution margin, item popularity, and menu design and psychology.
Is there a cheaper cut of 10 oz sirloin steak you can purchase to improve your food cost percentage? Could you change your menu design to move a lower-cost, high-profit to a better spot on the menu to beat out the calamari, which might be costing you a pretty penny to produce? Menu engineering can help you answer questions like these and more. Take our free menu engineering bootcamp so you can start using data to engineer the best menu for your restaurant.
- Test New Menu Items
With a breakdown of your product mix like the one pictured above, you can see exactly how a new menu item stacks up against the rest, and even get ideas for other menu items based on popular modifiers people are ordering. Though they might not know it, your customers are often your best idea-generators for new recipes.
To test the success of a new menu item, calculate the average net sales per each menu item over the course of a month. Then, add a new item to your menu for one month. After the month is over, see if the monthly net sales for the new menu item beat out the average. If it did, you might want to keep it in your lineup.
- Test Service Charges
The federally mandated minimum wage has increased substantially — 21 states and Washington, D.C. saw increases in the minimum wage in 2019, according to Ballotpedia. And adjustments to tip pooling rules are also in the process of being made.
In the face of these changing labor laws, restaurants are experimenting with several new ways to drive down labor costs, including implementing service charges for the back-of-house and/or front-of-house staff.
The restaurant in the example above has a sales category for “non-gratuity service charges,” so they can measure the effectiveness of this strategy. They can also see, in quick view, how much their customers are spending on food, alcoholic beverages, and non-alcoholic beverages, as well as which menu items have not been marked in any of those categories.
With the start of a new year, many restaurants are thinking about how to set achievable long-term goals for 2020. But it’s important to not get too carried away and also remain focused on what you can do to improve your sales and achieve goals in the short-term. Focus on one goal at a time, and once you’ve achieved it, move on to the next one.
This article was written by our friends at Toast
Toast is a restaurant point of sale and management system that helps restaurants improve operations, increase sales and create a better guest experience.Click this link to sign up to Maralytics, so you can track, report and analyse your results from your marketing tactics by using our Free Trial opportunity - click here