As a restaurant manager or owner, you barely ever have a moment to catch your breath. You spend the entire day shuttling between the administrative and accounts offices, the dining area, and the kitchen. If you’re not ensuring the day’s stock is available in the right quantities, you’re attending to staff scheduling issues or customer complaints. You’re not alone; there are many tools available that simplify your work and increase your effectiveness.
One of the most critical of these is a POS sales and inventory system. Procuring the POS is a great addition to measure your business success. Additionally, you need a plan for measuring its effectiveness to secure a good return on your investment.
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Defining Your Goals
The key to ensuring you get the most out of your business is defining your short and long-term goals. With these in place, you can track your restaurant’s performance over some time to see if any changes are required or if any changes you’ve made are having any effect on your bottom line. A useful metric to use to measure your performance and set your goals is net sales. You could have estimated your net monthly sales at $10,000 per month, deducting whatever discounts you may have given.
As a short term goal, you could aim to increase this figure by 10 percent by the end of the year, for instance. In terms of reducing your costs, you could seek to curtail your staffing costs by 15 percent in the year by accurately estimating your staffing requirements over lean periods.
Using advanced analytical tools, you can also drill down to measure individual items’ profitability on your menu. In this way, you may discover that some of your more popular items are not as profitable as others, which may be slow-moving but have a better margin. You could then devise a campaign to increase sales of the slower-moving items by a given percentage by the end of the year.
Measuring Your Progress
Acquiring a POS system can be useful in helping you measure your business’ KPIs accurately. Let’s go back to the example of a particular meal’s profitability; the food cost percentage is one of the essential stats a POS can offer you. This is a measure of how much the meal costs to make vis-a-vis its selling price.
You can go further to calculate the gross profit of your business using your point-of-sale system. This figure is arrived at by deducting the cost of goods sold from your revenue over a given period. You go further and deduct expenses such as rent, wages, and electricity to get your restaurant’s net profitability over the same period.
Utilizing a restaurant point of sale solutions to calculate your inventory turnover ratio is vital to help you get a picture of how fast your stock is moving.
Using Data Analysis
It is one thing to obtain data from your POS and quite another to turn it to your business advantage. Here are some ideas of how you can analyze data and use it to benefit your operation. The right POS system will give you such statistics on the average time it takes customers to get their meals from the time they place their order. You will be able to identify areas where efficiency can be improved to increase cover turnover. Your POS will also enable you to engage in menu engineering—a means of continually evaluating and revising your menu using real-time restaurant data. Based on this, you will be able to identify and push profitable items.
More advanced POS systems with artificial intelligence can allow you to learn your customers’ individual preferences and their dining patterns based on information collected about them from the past. Using this information, you can offer dinners meal recommendations that are more suited to their taste. The improved dining experience will make your customers more likely to call again and recommend your establishment to friends. Deciphering your customers’ preferences will also help you upsell meal combinations that may not be doing well simply because those customers are not aware they’re available.
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Getting the most from your POS
Having clear goals is essential in getting the most out of your POS. There is nothing worse than ending up with an expensive investment that does little to justify the ROI. Additionally, you want to avoid being so overwhelmed with data that you can’t convert it into meaningful action items to improve your operation’s profitability.