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5 key metrics to running a profitable restaurant

Running a restaurant is no easy feat. We can only act on what we know, and too many operators don’t know what they don’t know. To keep costs down while getting the most out of every hour, meal and cover, you need to know what drives important deliverables like repeat purchases, faster turn times and high tickets.

It comes down to a combination of the tastes of your guests and staff performance. These aspects aren’t easy to guess, and they require a look at several key metrics. Not only does this data need to be made available to managers, but it also needs to be easy to understand (and acted upon) to make the most of every shift.

1. Historical sales trends: Historical sales trends show how your sales today compare to the previous day or the same day last week, month, quarter or year. This type of detailed data is important to record and save daily to understand whether business is trending up or down. It’s one of the most effective ways for a restaurant to forecast and plan.

Reacting quickly can only be done when enough information is gathered to proactively strategize. For instance, running a huge promotion during the Phoenix summer won’t be as effective as it will during the winter, when the snowbirds return. Trending sales data lets you understand exactly what’s popular when — and why — well in advance.

2. New vs. repeat guest breakdowns: Another important metric to track is new vs. returning customers. Converting a new customer is difficult, and the lifetime value of each needs to be as high as possible to create the most return for your marketing and advertising budget. When you know how much business comes from repeat guests, you’ll better understand how to drive loyalty in a cost-effective way.

Every restaurant needs regulars to make its menu items the talk of the town and drive new business. According to a recent study by the National Restaurant Association, repeat customers make up 71 percent of sales at quick service; 68 percent at fast casual; 64 percent at casual dining; 63 percent at family dining; and 51 percent at fine dining. No matter how much you spend on marketing, it can’t compete with a customer recommendation.

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