Running a profitable restaurant doesn’t require guesswork—it requires discipline. While great food and service are essential, profitability is built on mastering a few core metrics. The good news? They’re simpler than you think.
Whether you're a seasoned operator or launching your first concept, keeping a close eye on these operational basics can make all the difference.
Understanding your Cost of Goods Sold (COGS) is non-negotiable. It reveals where you're losing money due to waste, theft, or over-portioning—and helps you price your menu more strategically. Profit starts with knowing what every plate really costs you.
A weekly inventory count can uncover trends like spoilage, over-ordering, or shrinkage. These small leaks in your operation can quietly erode your margins.
Your staff is one of your greatest assets—but also your largest expense. Monitor labor cost as a percentage of sales, and keep tabs on productivity, scheduling efficiency, and service levels.
Identifying peak traffic times helps you schedule smartly, prep accurately, and ensure you're staffed to meet demand—without overextending your budget during slow periods.
Prime costs—your combined food and labor costs—are the gold standard for financial health. For most restaurants, these should stay below 60–65% of total sales.
Every dish on your menu should earn its place. Break down sales reports to pinpoint your high-margin, high-volume stars versus low performers.
Your guests are telling you what’s working—and what’s not. From online reviews to in-store surveys, pay attention. It’s the most direct way to identify service gaps and menu improvement opportunities.
Consistency is everything. Whether you use sophisticated software, Excel spreadsheets, or a well-worn notebook, the key is creating a weekly or monthly rhythm for reviewing your numbers and adjusting accordingly.
Regularly track food costs, inventory, labor, and sales trends.
Prime costs should remain under 65% of sales for profitability.
Use menu performance and customer feedback to make smart decisions.
Establish a routine to review and act on key metrics.