Run your restaurant by numbers, not by feelings
"How's the restaurant doing?" If your answer is "fine, I think" or "bad, not sure why," you have a problem. Thriving restaurants are those that measure, and measuring requires the right KPIs.
KPI stands for Key Performance Indicator. You don't need 50 metrics: 10 well-chosen ones give you a complete picture of your restaurant's health.
1. Food Cost Percentage
The king of restaurant KPIs. Shows how much of selling price goes to ingredients.
Formula: Food Cost % = (Ingredient Cost / Food Revenue) × 100
Benchmarks: Fine dining 25-30%, casual restaurant 28-33%, pizzeria 22-28%, fast food 30-38%.
How to measure: per-dish (theoretical) and monthly total (actual). The gap between them reveals operational inefficiencies.
2. Labor Cost Percentage
The second largest cost after ingredients. Includes wages, benefits, overtime for all staff.
Formula: Labor Cost % = (Total Staff Cost / Total Revenue) × 100
Benchmark: 25-35% depending on venue type. Remember: an employee earning €1,400 net costs the business approximately €2,400-2,800/month with employer contributions.
Prime Cost: Food Cost % + Labor Cost % — must stay under 60-65%.
3. Average Check
How much each customer spends on average.
Formula: Average Check = Total Revenue / Number of Covers
Why it matters: if your menu has dishes at €12-18 but average check is €14, customers are ordering a single course and nothing else. Work on upselling (desserts, coffee, wine pairings).
4. Seat Occupancy Rate
How many of your seats are actually filled during service.
Formula: Occupancy % = (Covers Served / Available Seats × Turns) × 100
Benchmark: 60-75% is good. Above 80% you're nearly always full. Below 50% you need to work on marketing or rethink the offer. Monitor separately for lunch and dinner.
5. RevPASH (Revenue Per Available Seat Hour)
The most powerful KPI. Measures revenue generated per seat per hour of operation.
Formula: RevPASH = Total Revenue / (Seats × Operating Hours)
Why it's useful: combines occupancy, average check and table turnover into a single number.
6. Food Waste Percentage
How much food you buy that ends up in the bin instead of on plates.
Formula: Waste % = (Value of Discarded Food / Total Food Purchases) × 100
Benchmark: under 3-5% is good. Above 7% you have a serious planning or storage problem.
Economic impact: a restaurant doing €400,000/year with 30% food cost spends €120,000 on ingredients. At 7% waste, that's €8,400 thrown away.
7. Contribution Margin Per Dish
Not all dishes contribute equally to profit. Contribution margin shows what's left after paying for ingredients.
Formula: Contribution Margin = Selling Price – Ingredient Cost
Menu engineering classification:
- Stella: high margin + high sales (protect and promote)
- Trainante: low margin + high sales (increase price or reduce costs)
- Promessa: high margin + low sales (promote more)
- Da Rivedere: low margin + low sales (remove or rethink)
8. Daily Break-Even
How much you need to earn each day to cover all costs before making profit.
Formula: Break-even = Fixed Costs per Day / (1 – Variable Cost %)
Why it matters: knowing your daily break-even lets you understand within the first hours of service whether the day will be profitable.
9. Customer Acquisition Cost & Lifetime Value
CAC: Marketing Spend / New Customers Acquired. CLV: Average Check × Annual Visit Frequency × Years of Loyalty.
The rule: CLV must be at least 3× CAC.
10. Average Ticket Time
Time from order to dish leaving the kitchen.
Benchmark: 10-15 minutes for starters and mains, 15-20 for entrées. Beyond 25 minutes customers get frustrated.
How to monitor KPIs in practice
Option 1: Spreadsheets — Works initially but becomes unmanageable. Manual data entry, broken formulas, nobody updates them.
Option 2: Management software — BiteBase automatically calculates food cost, per-dish margins, average check and other KPIs from its dashboard. Data updates from invoices, sales and inventory without manual entry.
Option 3: Accountant — Useful for quarterly financial data but arrives too late for daily operational decisions.
Ideal: combine management software for operational KPIs (daily/weekly) with your accountant for financial KPIs (quarterly/annual).
Common KPI monitoring mistakes
1. Measuring too much — 50 metrics and you look at none. Better 10 tracked consistently. 2. No benchmarks — A number without comparison means nothing. 3. Only financial KPIs — Customer satisfaction, prep time and waste matter too. 4. Not acting on data — The worst KPI is one you watch without doing anything.
Frequently asked questions
Which KPIs should I check daily? Daily revenue vs break-even, cover count, average check.
Which KPIs weekly? Weighted food cost, labor cost, waste percentage.
Which KPIs monthly? Actual food cost (with inventory), per-dish margins, average occupancy, RevPASH.
Should I share KPIs with staff? Yes, at least operational ones like waste and ticket time. Staff who see numbers are more motivated to improve them.