It’s important to track and measure the performance of your venue and the systems by which it operates.
It’ll probably seem like an easy task: just watch and see how busy your venue is, and how well your team performs right? However:
- How will you know if you need to cut back on wage costs? (you may not realise that you have the ability to cut back)
- How will you know if you should promote a slow moving product?
- How will you know which nights of the week sells the most of a certain product?
- How will you know if a certain number of products are always appearing in your spillage register?
- How will you know which beer has the highest profit margin (and therefore should be promoted, to make the most profit)?
- How will you know if a profitability based system is not working as well as you planned?
Set up systems to track and measure your establishment’s ‘key performance indicators’ (KPIs).
Use any resource available to record costs, income, sales etc. – Basically any major indicator of your bar’s performance. Your overall profitability will benefit greatly if you have the capacity to make informed business decisions – tracking your KPIs will allow you to do this. Tracking and measuring will allow you to optimize your profitability, productivity and customer service procedures.
If you don’t have any kind of tracking setup already, I suggest brainstorming KPI’s that are relevant to the performance of your establishment – you don’t want to realise six months down the track that you have been tracking a variable that makes no sense or reflection of the health of your trading. You don’t want to track too many KPIs either – you’ll end up stuck in front of a computer for far too long.
Tracking and measuring ‘Key Performance Indicators’ will allow you to monitor essential factors including your team’s productivity performance and overall profitability, and make educated business decisions to improve these elements accordingly.
Examples of ‘Key Performance Indicator’ tracking systems are:
- Wage percentages (the cost of wages compared to your venue’s food/beverage income)
- Food vs. Drink average spend per head on any given night of the week
- Entertainment costs
- Gross profit-margin tracking
- Wastage/Promotional account expenditure
For those of you who have advanced Point Of Sale and Inventory systems, I suggest you use them to your advantage. You POS system probably cost a small fortune – it makes sense to squeeze every penny worth of profitability out of it. If you are unsure of how to use your POS’s reporting abilities, contact your POS support representative and arrange a training session. If your system allows, you’ll be able to print advanced sales reports which will allow you to analyse sales data and tailor your marketing and promotions accordingly. If your POS system has an invoicing function, make sure this is running smoothly so you can track your stock efficiently (and illuminate any causes for concern, like theft or wastage issues) and also be sure to track profit margins and other similar sales statistics.
Use your POS system’s reporting functionality to its fullest. It probably cost a small fortune to purchase and install, so it makes sense to squeeze as much information out of it as possible.