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Metric #2 – Turnover
Part two in our series on Key metrics for successful Hospitality business: click here if you missed Part 1: Wage Cost.
Turnover – “The total gross sales for a given period”
Experienced Hospitality operators understand that the day to day turnover figure is extremely difficult to predict.
We’ve spoken with thousands of hospitality organisations over the years and have noticed that whilst many operators simply accept the fluctuations and simply try to be reactive to them, the more successful ventures understand that there are huge benefits to developing a discipline and strategy around estimating potential turnover.
When such a strategy is implemented, practiced repeatedly and adjusted accordingly, these businesses are in a great position to make truly educated guesses surrounding their future financial performance. There’s no doubt that this is a somewhat difficult practice to master, however our experience has shown us that the rewards are truly worth it.
Here are some things to consider when your hospitality business is considering its future turnover:
Past performance – what do we normally turnover this time of year?
Trends – are we trending consistently up or down against the same period last year?
Local Events – what is happening at the local stadium? And will the local team likely win that rugby game?
Changes in competition – are there new operators in our area competing with us?
What is the weather forecast – how much do we normally drop in turnover on a wet day to a sunny day?
Promotions – Are we offering a two for one deal tonight?
General economic conditions – are people feeling confident about spending money
Holidays – is there a public holiday? Is there one coming up that people may save money for?
Pricing – has our pricing changed?
As you can well imagine, this list can become very extensive. It’s vital to understand that each individual location will have its own list of influencing factors.
So why not get started building your list? Once mastered, your hospitality business can only benefit from it!
Employee rostering plays a crucial role in the success of any hospitality business. If you’re interested in more information about how the right tools can help determine your turnover – jump on over to the technology section of the blog.