In the past year many restaurants have added new technologies to help with online ordering and delivery. Which means more systems and data to manage. Learn all about restaurant tech and data stacks and what the difference is between the two.
In a prior blog post, How to use PMIX Analysis, I wrote about Restaurant Product Mix in various stages of reporting complexity from Basic to Advanced Reporting and how each view can provide different insights. Today’s blog is going to capitalize on that prior issue but also take a different view in an effort to expand on the uses for PMIX.
With changes taking effect across the restaurant industry in response to COVID 19 (full business shutdowns or limited operations), I'd argue that if you pivoted and changed direction and now offer online ordering, delivery and curbside pickup, then understandings around operational execution, while always very important, are even more critical. Visibility into and clarity around that execution is necessary to your long-term success.
And that visibility comes from your ability to transform your data into actionable information which, in turn, delivers clarity for you and your team.
There are two ways that a business can grow profits:
- Increase Sales
- Decrease Costs
As you might suspect, both approaches have their own unique set of challenges. But, regardless of which of these strategies you choose to deploy (more on this topic here), you’ll want to become intimately familiar with your Profit & Loss Statement as it will help you to gain insights into the strengths and weaknesses of your business. This post is filled with helpful tips to help you get the most out of your P&L Statement. Be sure to download our Top Restaurant Profit & Loss Reporting Tips guide at the bottom of this post.
What Was Ever Certain?
The ever-changing situation surrounding COVID 19 is unprecedented and for many it's a time of uncertainty and great concern. Reading this or similar comments in numerous articles, LinkedIn posts and Twitter feeds has made me ask, is there such a thing as certainty in our uncertain world?
I suppose, in certain limited and controlled situations it's arguable that it exists. Heck, the definition of certainty even says it exists; "a fact that is definitely true or an event that is definitely going to take place”.
My observation of certainty is that many of us, myself included, expect things will go the way we’ve come to expect (the same old routine) day in and day out, and we take comfort in our belief in this certainty. Therefore, certainty is a way for us to feel in control - to believe that things are going to unfold in a certain, predictable way.
Topics: Restaurant Operations
In this post, I want to examine the differences between reporting and analysis. Why? Because they're fundamentally different. Yet, I never hear, "we're doing all the analysis we need." No, instead I'm hearing, "we have all the reporting we need." And I'm quite certain they do - what with all the systems used to run a restaurant. It's likely that they and you have hundreds of standardized reports available and many are likely helpful at telling you what happened; e.g., how many of this or that item did we sell, what's our percentage of labor, what's our gross / net sales in this or that store, market, overall, what's our cash over short, etc. See, all helpful until you want to understand why the cash is shorter than you'd like, why that item didn't sell as you expected, why labor in a market is higher or why that promo did so well but we wound up making less money.
To get an answer to 'WHY' something happened requires you to perform some analysis and that requires a solution that can help you knit together the pieces needed to get at the underlying answer. So let’s start with a high-level definition of Reporting and Analysis.
Topics: Restaurant Performance
Restaurant Labor Theft
According to the American Payroll Association (APA) almost 75% of U.S. businesses are paying employees for time not actually worked. The APA also indicated that loss, due to time theft, can run from 4% to 7% of Gross Payroll. Assuming the APA estimates for theft are accurate and your cost of labor is running around the industry average of 30% then it would be safe to further assume that a restaurant with $1,500,000 (‘$1.5M’) in sales could be losing $18K to $31K per location on an annualized basis.
Employees Learn Quick
Voids, Comps, and other means to adjust orders in process, just placed or delivered are a necessity if you operate a restaurant. Let’s face it, employees can make mistakes while entering orders just as customers can change their minds and now want a different item or realize they don’t have enough cash and now need to pay with a credit card. On the other hand, if you just tendered a customer's order to cash, you’ll need to void the order and re-enter using the new tender type.
Of course, these are just two of many examples where voids are a requirement. Comps on the other hand are used in the restaurant business when the wrong item was delivered or the customer was unhappy with their experience. While these tools are available to make corrections and adjustments as needed – your employees learn quickly that they can just as easily be manipulated to their financial advantage.
Topics: Restaurant Loss Management
In today’s competitive marketplace, restaurant companies are seeking ways to become more competitive, more efficient, and more able to anticipate and meet their needs and the needs of their customers. Restaurants with a holistic view of their company, suppliers, and customers, and how those different areas interact with each other, are in a stronger position to make more successful decisions.
Restaurant companies generate a lot of data on a daily basis from all the systems they have in place. How you collect, organize, combine, analyze and distribute that data can have a big impact on the overall success of the business.
Topics: Restaurant Data Warehouse
$60k of your hard-earned revenue may be going home in the pockets of thieves. The NRA estimates that, on average, Net Income (‘NI’) for most restaurant companies is around 5% to 6%. The NRA also states that loss due to fraud at the restaurant runs around 4% of sales CASH is KING. Assuming the NRA estimates for theft are accurate then it would be safe to further assume that a restaurant with $1,500,000 (‘$1.5M’) in sales could conservatively lose $45K or possibly even $60K in revenue due to theft.
Given the number of ways theft can occur, it’s no wonder the percentage (4%) remains as high as it does. It’s not my intent to attempt to try and cover each way a restaurant can be losing money, rather, I’ll focus on the most popular -cash theft.
Topics: Restaurant Loss Management