Starting Small with Big Data: Advice for Restaurant Owners

The buzz around Big Data has been going for so many years now that mention of it has almost become white noise. If you own a small restaurant or local chain, you might think it’s not even relevant to you, or your point-of-sale system may not allow you to track your own data. Now is the time to rethink that, but where do you get started.

What is your data as a restaurant?

Restaurant operations may be so second nature to you now that you don’t even think about it in terms of data. And if you think bookkeeping and inventory management are just necessary hassles, you probably don’t want to get any more nitty-gritty. With the right tools and point-of-sale system, you can actually save yourself time, money and effort once you understand all the places where you are creating (and perhaps not tracking) data about your restaurant.

To start, you can focus on what we call Structured Data, which is what comes from regular operations: sales, accounting, labor, inventory, etc. Just so you know the distinction, Unstructured Data throws a wider net and requires more advanced tools and strategies. It can include your marketing campaigns and reward programs, as well as market shifts and seasonal changes in foot traffic.

To start, you can focus on what we call Structured Data, which is what comes from regular operations: sales, accounting, labor, inventory, etc. Just so you know the distinction, Unstructured Data throws a wider net and requires more advanced tools and strategies. It can include your marketing campaigns and reward programs, as well as market shifts and seasonal changes in foot traffic.

  • What is selling best?
  • What are the margins on your best items?
  • Where are the margins slimmest?
  • Who is buying what…and when?
  • How are prices of ingredients changing?
  • Are essential products even available?
  • Where are your biggest costs being incurred?
  • How are the customers tipping?

Using your Point-of-Sale System as a tool

Restaurant owners should not view their point-of-sale system as a necessary, but ultimately arbitrary utility. You’re in the restaurant business; you know the importance of having the right tools and ingredients. Think of your POS system and your data in the same way.

Having a point-of-sale system that can help you visualize this data or export it to other programs will really help if you want to start being a data-driven business. And today, there really isn’t any other way to do business. Outside the restaurant industry, mom-and-pop shops are increasingly using Business Intelligence (BI) software to improve staffing, inventory management, customer insights and—above all—profit margins. If you have a good POS system, those tools are already at your fingertips.

Big data and scheduling

Labor costs are among your biggest expenses as a restaurant. Beyond the interpersonal aspects of managing employees, you can use hard data to determine the efficiency of servers and reward those performing best.

Start out with the big picture: Look at overall labor costs, compare them to sales, and use this data to really fine-tune your scheduling for busy and slow times. Look at absenteeism and potential overtime costs that come as a result. Get a broad picture for how the staff are determining the bottom line for your restaurant.

Next, look at the individual performances: check size, tips, upselling. We all have good days and bad days, but over time a picture will emerge of who is really leading in the dining room. It’s better to incentivize your best performers than punish those who are lagging.

Big data shapes your restaurant

The above examples are just the start. When you have a solid grasp on your data, it will help you make more confident, informed decisions in every aspect of your business: menus, hiring, promotions, design, specials, and so on.

We’ll get to Unstructured Data and customer feedback in another post, but we hope this has helped you understand what Big Data for restaurants really means. And if you want to learn about how Dinesync is a point-of-sale system built for big data and the future, feel free to reach out.

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