Glossary of Useful Terms (Part 2)

We’ve talked a little about some basic F&B outlet lingo in Part 1 of this series – here’s part 2, with a focus on terms to do with productivity!

  • Sales per square foot:
    the average revenue a business brings in, for each square foot of sales space. This tracks the efficiency of a restaurant in driving revenue with the space available.
  • How to calculate it:
    Take your sales per day, and divide it by the area of your sales space
  • Fixed-asset turnover ratio:
    the ratio of sales to the total fixed assets. This measures your ability to generate sales from your fixed-asset investments like property, plant and equipment.
  • How to calculate it:
    Subtract the value of accumulated depreciation from your fixed assets. Divide net sales by that figure.
  • Sales per seat:
    the amount of revenue generated per seat in the outlet.
  • How to calculate it:
    divide your total restaurant revenue by the number of seats in your outlet.
  • Employee turnover:
    measuring the percentage of employees who leave within a given period of time.
  • How to calculate it:
    Decide on a period of time you wish to measure this for. Divide the number of employees who left (voluntarily) within that period, by the number of full-time employees.
  • Sales per employee:
    measures the average revenue generated by each employee.
  • How to calculate it:
    Divide the business’ revenue by the total number of employees.

We hope this was helpful to you. Look out for our part 3 of this series, up next month!