Use benchmarking to ensure restaurant success

January 28, 2016|Kevin Eiden

How do you improve your business and take it to the next level? How are your rivals making it work in an ever-changing and competitive environment? What key drivers make your business hum? Benchmarking can help your company answer these questions and compare yourself to the top performers in your industry.

You are probably thinking this sounds great if I had the time to pull the information together. My restaurant consumes every waking moment of time as it is. More important, even if I had the time to gather the information, where do I start? What do I do with it when I have it? Well, we are here to assist.

Make benchmarking work for you

Benchmarking is about analyzing and comparing best practices to determine what others did, how they did it and how you can adopt those practices. Benchmarking opens your mind to new ideas, puts your organization in a mode of continuous improvement and, most important, enables you to work towards outperforming your competitors.

One of the leading indicators for the restaurant industry is its prime cost. Knowing your prime cost, which can be broken down further by food and beverages, will ultimately help determine how much to charge for your products and services in order to make a profit. These calculations should be done frequently, even weekly. The more often you calculate, the better equipped you will be to make the necessary changes to stay profitable. The average should be somewhere between 60% and 65%.

Your vendors, upon request, can provide reports and charts detailing the purchases you made in the past. This is valuable information in determining appropriate inventory levels, as well as trying to establish the proper amount to charge for various items you are selling. Contact your vendors frequently for this information to stay on top of your business, as well as what is happening in the industry.

Where do you go from there?

There are many indicators you should be analyzing to help you run a profitable and efficient establishment. Schenck produces an annual restaurant industry benchmarking report with a comprehensive list of key indicators—including prime cost—which, when focused on, will make you more profitable. We compiled information from a wide variety of Wisconsin restaurants, so you can compare yourself to your regional competitors. The corresponding national averages give a broader perspective and allow us to provide a more thorough analysis.

Request a full copy of the 2015 Nationwide Benchmarking Report for Full- and Limited-Service Restaurants by contacting Jennifer Strebel at or 920-455-4194.

Schenck goes beyond just reporting numbers. Contact your Schenck advisor to see how benchmarking can benefit you and your company. Working with Schenck’s Hospitality & Retail Industry team, we will develop a plan of action specially designed to meet your needs.

Kevin Eiden, CPA, is a manager and member of Schenck’s Hospitality & Retail Industry team. He has more than 15 years of public accounting experience working with a variety of closely-held businesses and individuals, and provides a wide range of services including financial statement compilations and reviews as well as the preparation and review of business and individual tax returns.