Get free tips to help you grow your business

10 KPI examples for your bar or restaurant

Pick any or all KPI's from this list or define your very own

What is a KPI?

Some say:

-“If you can’t measure, you can’t manage”

Read this article for our definition of a KPI

 

Here’s a list of useful KPIs (Key Process Indicators) that can help you manage your bar or restaurant:

Employee Labor Percentage

Add up expenditures for all wages and salaries. Include bonuses, commissions, and similar compensation. Be sure to add in payroll taxes and the cost of employee benefits. Divide this by the sales.

Cost of goods sold % (COG or food cost %)

One of the most widely used KPI in the food and beverage industry

Formula: COGS%=(Beginning Inventory+P−Ending Inventory)/sales
where
P=Purchases during the period

Note: Don’t forget to include the following costs in your calculations:

  • Loses
  • Discounts and promotions
  • Freebies

Percentage of kitchen wages on sales

Same as Employee Labor Percentage but for the kitchen staff

Total on-hand value

Keep this as low as you can to maximize cash flow. Use in conjunction with the Safety Stock to avoid shortages.

Top selling products

Compare top sellers with their COG to address products that have the most impact on your profits first.

Sales by employee

Challenge your staff or simply congratulate top performers.

Inventory turnover

Inventory turnover is a ratio showing how many times a company has sold and replaced inventory during a given period.

Turnover by product

Product turnover shows your business’s ability to quickly recover expenses by selling items already in stock.

Holding costs

Holding costs are those associated with storing inventory that remains unsold like storage costs and interests.

Variance

Variance refers to how much an actual expense deviates from the budgeted or forecast amount. Specifically for a bar or restaurant, we measure the difference between the POS sales reports versus the actual consumption of goods measured with an inventory. If the variation between the two results is too high, you must take action to maintain profitability.

Conclusion

KPI’s are essential tools for a restaurant manager. They help you focus on measurable data, find which issues to tackle first and set achievable goals.