Article

Five Financial and Operational Metrics You Ought to Know

You might have learned about the Rosetta Stone in grade school, a stone slab inscribed with text written in Egyptian hieroglyphs, Egyptian Demotic, and Ancient Greek. Its discovery made it easier for modern archeologists to read hieroglyphic writing.

Your financial data is not ancient-Egyptian text, but some operators treat it as such. Just as the Rosetta Stone unlocked the mystery of hieroglyphics, with a little understanding of how to look at your numbers, you might unlock information that can help you improve operations and squeeze a few more points of profit from your sales.

In this article, we review examples of easily calculated finance and operations metrics that can tell us a lot about the health of our businesses. We examine how often to crunch these numbers, and what new relevance these metrics take on in the current operating environment.

Your numbers tell a story, if you know where to look. The sad reality is that many restaurant operators don't know where to look. Or they chase industry benchmarks that don't align with their concept, rather than understanding the story these metrics tells us about their performance.

The current operating environment is a challenging one. Pent-up consumer demand post-COVID-19 has diners flocking to restaurants, but an industry-wide labor shortage has many feeling like they're missing the moment. Rising inflation and an interrupted supply chain force operators to absorb price hikes or pass the increased cost on to their customers. Independent operators are trying to remind customers what they love about a favorite place while they get new hires and veteran hands up to speed, so their concept can provide the customer experience it was known for.

These metrics are not the only ones you should track. The value of this article, we believe, is to show you how easy it is to learn a lot about your business's ability and productivity with simple math.