Easily Increase Profitability

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Increase Productivity to Increase Profitability

By Rick Braa, CHAE

Numbers rule! Numbers tell the truth, they eliminate drama, they’re fascinating and most of all they can help you make more money. But numbers that measure productivity can help the most.

A restaurant is a mini manufacturing plant. Restaurant processes mimic food manufacturing by receiving raw goods, converting them to finished goods and delivering those to the customer. In the manufacturing industry, worker productivity is a key measurement to evaluate profitability. Worker productivity in the restaurant industry correlates to better profitability just 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 translates to higher productivity. Too high of a plate count and food quality may suffer, too low of a count 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 proportionate 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 also 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 because of 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 should be 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 increased profit. Everyone wins when you realize one fact: Numbers rule!

Rick Braa, a Washington Hospitality Association Consulting Network consultant, is the founder/principal of BRAA Associates, LLC., a firm committed to helping companies improve profitability.


This article is an excerpt from the Handbook for Excellent Restaurant Operations (HERO), published by the Washington Hospitality Association.  Want a hard copy of the whole manual?  It’s one of the many benefits of becoming a member!  Find out more about joining the Washington Hospitality Association here.

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Categories: HERO