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Increase Productivity to Increase Profitability
By Rick Braa, CHAE Published: 08/10/2010
Numbers rule! Numbers tell the truth, they eliminate drama, they’re fascinating and most of all they can help you make more money. But what numbers help the most? Numbers that measure productivity. A restaurant is a mini manufacturing plant. Processes mimic food manufacturing by receiving raw goods and converting them to finished goods then delivering finished goods to the customer. In the manufacturing industry worker productivity is a key measurement to evaluate profitability. Worker productivity in the restaurant industry will lead to better profitability as it does in the manufacturing industry.
Labor percentages are the most commonly used measurement in the restaurant industry yet percentages are rarely used in the manufacturing industry. Why? Because worker productivity measures how much product is produced regardless of sales price. Labor percentages move up or down with the sales price of a product, they have nothing to do with productivity. It’s important to measure beyond labor percentages in a restaurant to maximize worker productivity and drive profitability. It’s critical to measure productivity by work group (front of the house/kitchen), position (server, busser, cook, prep, bartender, etc.), and individual.
Five of the best measurements are:
1. Kitchen plates per hour: Plates produced from the kitchen divided by number of hours worked in the kitchen. This is a straightforward calculation focused on food production. The more plates produced the higher the productivity. Too high and food quality may suffer, too low may indicate overstaffing.
2. Guests served per hour: Number of guests served in the dining room divided by the number of hours worked by the front of house staff (exclude bar). This ratio indicates whether staffing is appropriate to business volume. For example, if a restaurant has eight people on the floor and two guests in the restaurant, the ratio is too low and staffing is not appropriate.
3. Sales per server hour: Dining room sales divided by number of hours worked by servers. There are only a few places where revenue can be generated and servers are the main source of revenue in the dining room. If the ratio is too high perhaps the guest is not receiving proper attention, if the ratio is too low perhaps the servers are less productive than desired.
4. Drinks per bartender hour: Number of drinks produced by the bar divided by bartender hours. This number not only indicates how fast a bartender is capable of producing a drink but how many drinks are being sold throughout the restaurant. Raising the drink to food ratio drives revenue.
5. Comps per transaction: The number of items produced (food or beverage) compared to the number of items that are remade. For example, if one item was remade due to a mistake and there were 100 items produced in the kitchen the ratio would be 1:100. As the ratio improves so does productivity and teamwork. The focus is on getting the order right the first time and eliminating waste. The server makes sure the order is taken and keyed into the POS accurately and the kitchen/bar makes sure the item is produced accurately.
Become the benchmark for productivity measurements. Stay focused on how your restaurant is performing regardless of the competition or industry standards. Measure yourself day-by-day, period-by-period and set goals to improve. As productivity improves, so will the bottom‐line regardless of concept.
The result of higher worker productivity is better morale, less drama, an improved guest experience and more profit. Everyone wins when you realize one fact: Numbers Rule!
For a more information on improving profitability and other great business advice visit braaconsulting.com or contact BRAA ASSOCIATES, LLC at rbraa@braaconsulting.com. Rick Braa is the founder/principal of BRAA ASSOCIATES, LLC.
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