COMMENTARY

Identifying profit patterns can help restaurants improve operations

 
March 20, 2017 | by Dave Bennett

When restaurants experience negative same-store sales and traffic declines, it may be challenging to motivate the team. Throughout history, the one thing that has helped people persevere through tough times has been hope, however.  One way operations executives can find hope during these times is knowing when profits are highest throughout the year and taking advantage of that knowledge.

Finding hope

It's easy to get stuck down in the weeds comparing week over week labor reports, getting hammered about controlling labor costs — it's enough to make you want to throw your hands up and walk away. But if you take the time to take a step back, zoom out and look at the big picture, you're sure to find a ray of hope among those dark clouds.

Where to look

When you zoom out and view your sales metrics by month for the past two or three years you will uncover a pattern of when sales and profits tend to be highest. If you're down in a valley, it should give you some comfort and hope that profits are typically down this time of year butright around the corner things will be looking up. Restaurants experience these peaks and valleys at different times throughout the year that may depend on things the type of restaurant (QSR, FSR, fine dining, etc.), a change in the weather, holidays, what day of the week that holiday may fall on in the current year versus in the past., or sports events like football Sunday.  This is important information to know because you want to take advantage in this uptick in traffic and sales to keep those customers and dollars walking in the door.

How to use the information

Now that you've taken a step back, seen the big picture and identified your profit patterns, you can use that information to thoughtfully and intentionally improve operations. Use those valleys to engage team members in extra training to make sure they are ready to service the crowd that's coming around the corner. Getting your team members in tip-top shape in areas like speed of service and increasing employee productivity will ensure your team is ready to handle the coming influx of customers. A well-trained team means those customers leave highly satisfied and are much more likely to return, spend more and recommend your restaurant to their friends.

Daily profit patterns

Once you've gotten an idea of what the big picture looks like, it's time to zoom back in and identify your daily profit patterns, specifically those Peak Hours. To do this you'll want to create a report that shows you sales by the hour. Peak Hours are typically the hour or two at lunch and the two or three hours at dinner when restaurants’ volume is the highest—and most profitable.

 With profits on the line, these are the most important hours to get right when it comes to customer service and labor productivity. You'll want to be sure you've got your A-players scheduled for those hours and leave training new team members to the off-peak hours.

Not just hope

Identifying your restaurant's most profitable periods on an annual and daily basis will allow you and your team to be ready to maximize profits. You can schedule extra training during those not-so-busy times and motivate your team with the knowledge (not just hope) that things will start to look up soon.

Leslie Thompson co-authored this blog.

Photo: istock


Topics: Financial News, Operations Management


Dave Bennett / With prior experience with Dunkin’ Brands and IBM Global Services, Dave Bennett has led Mirus through its formative years and its current growth phase. Dave holds a B.S. in Business Administration and MBA from Northeastern University.
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