The Key Performance Indicators, known as KPIs, are tools which help you identify how well your business is performing in specific areas and if you are achieving your business targets in those areas.
Using KPIs in your daily operations is a must if you really want to have control of your business in the key areas. They will help you identify quickly and effectively any opportunities for improvement and show you the problems your business may have at an early stage, when you can easily take corrective action to bring everything back on track.
In order to be able to use KPIs in your operations, it is a basic requirement that you collect and analyze data in the key areas of your business. This will offer you a deep knowledge of the core of your business and will help you escape from the fog you might be finding yourself, sometimes on a daily basis, because of all the responsibilities and worries running and operating a business can cause.
Especially in hospitality industry, saying that competition is high is an understatement, as you know very well; in every corner there is a food and drinks business of any type. If you want to be successful and profitable, and your business lasts for many years to come, you need to know how to control the key areas. Your weapon in this battle are the KPIs.
There is a big list of KPIs in hospitality, especially the restaurant KPIs are so many and not all of them will be relevant to you. In order to help you at this point, I have put together and described the most important ones, which I think are relevant to your operations and targets.
You are free of course to use any KPIs you can imagine, but you need to be careful and aware that if you focus on the wrong ones, you will find yourself wasting money, time and effort, as they will not give you back the value and knowledge you are really looking for.
The 5 Basic KPIs
The key areas for every restaurant, café, coffee shop and other hospitality establishment are the Sales, Average Ticket Value and Variable Expenses like Labour Cost and Cost of Gods Sold (COGS), and finally Food Waste. In order to keep control of them and be able to improve them, you need to set KPIs on these areas.It also gives you a good indication of how the day goes, especially if you set sales targets per period in the same day.