Running a bar or a restaurant is difficult. The margins can be razor-thin, talented labor is difficult to find (especially during the ‘Great Resignation’) and the industry is highly competitive.
That’s why data is the foundation to any successful restaurant or bar, whether it’s a chain or small independent business.
The good news is that, with technological advancements, most restaurants and bars now have access to a huge amount of real-time data from different systems - giving them valuable insights into a range of operations across their business.
On the other hand, most restaurants and bars don’t know which data to use to grow their business. In this blog, we will look at some of the most important metrics that will drive restaurant and bar success.
Before we get into that, however, let’s first take a quick look at what data is in the restaurant and bar world and why it’s so important.
What is restaurant and bar data, and why is it important?
Bar and restaurant data analytics is the process of collecting and analyzing the data points related to all areas of your business, and using them to build meaningful insights that help you improve your restaurant or bar.
This data can be collected from all areas of a business, from understanding customer satisfaction and better managing your inventory, to ensuring that you're paying competitive rates to your employees.
Data can be converted into a wide range of meaningful insights that help restaurants and bars improve their menus, better meet guest expectations, enhance employee training, develop better marketing campaigns, as well as improve profit margins.
With restaurants and bars using an increased number of systems to operate their business, this data can come from a variety of sources - such as reservation systems, point-of-sale systems (POS) and inventory management software.
What data should your restaurant or bar collect and analyze?
Restaurant and bar data is the foundation to any successful business, but it’s not a magic solution. Collecting and analyzing data presents you with the insights you need to make better business decisions - but you need to create a strategy of continuous improvement moving forward.
So, with that in mind, what data should you collect to help grow your restaurant or bar business? We’ve listed just a few of the top data points here:
- Inventory management data
By gaining clearer visibility and more control over your food and beverage inventory, your restaurant or bar will gain valuable insights that improve the profitability of your business. You’ll be able to see exactly how much of each inventory item was purchased. Where it was used and if it was wasted.
Inventory data, often gained from the use of inventory management software or an inventory management app, gives you the insights you need to boost your profit margins, reduce inventory loss and waste, optimize your ordering process and improve your internal operational processes around beverage and food management.
Inventory data is one of the core components to a profitable business.
- Monitor customer satisfaction
What customers think of your business is important for two main reasons. Firstly, the more you can build a loyal customer base the better you will future proof your revenue. Secondly, word-of-mouth marketing can help you to substantially grow your business and reach new customers - particularly when considering the importance of online reviews in today's customer journey.
To collect and analyze customer reviews you can do two things - collect customer feedback through surveys, as well as monitor social media and review sites (such as Yelp, TripAdvisor and many others).
By monitoring customer feedback you can identify patterns with negative reviews. With these insights, you can then work to proactively fix these issues and deliver a superb customer experience to your guests.
- Your POS is a valuable source of data
Point-of-sale systems (POS) are another great source of data for restaurants and bars. Monitoring this system for some key metrics can give businesses a better idea of their most popular dishes and the average ticket size per customer. This allows restaurants and bars to make better menu and pricing decisions based on their customers' buying habits.
But remember, your POS will not cover your inventory management system needs. This is a common mistake made by restaurateurs and bar owners.
- Track financial data to ensure you are profitable
Last but not least, it’s crucial that you monitor and analyze your financial data. The hospitality industry can have thin margins, and that means restaurants and bars must keep their bottom line tight at all times.
To ensure they are profitable, restaurants and bars should keep track of profits, loss, cash flow and cost to analyze how they are performing on a consistent basis. Data points to look at should include; wages, revenue, recurring bills (such as rent and utilities), food cost, cash flow projections, profit and the average cost per item.
Are you interested in learning more about how you can use data to improve your restaurant or bar’s profitability? Get in touch with Sculpture Hospitality today. Our team of specialists would love to help you do just that.