This is where the fun begins.
Yes, that’s right—fun! To truly grow as a person and as a catering firm, you need to step out of your comfort zone and into your challenge zone. That’s fun in my mind. Doing things the same old way, day after day, is boring to me. If you take the KPI Challenge you will be joining me and many others as our firms grow from good, to great, to unstoppable.
A quick review from last month’s article shows I suggested three things:
• It will be a process to get your people to buy in. This is a long-term project that will take months and maybe even years. Little by little, step by step.
• Recognize that there may be costs involved in gathering the data, so please be prepared to invest some money into certain KPI efforts, while determining your return on the investment. Some KPIs may not warrant the investment, while others will. Only you can decide.
• Finally, think of KPIs as a navigation tool that guides your business and the decisions that you make. You will surely prosper if you use them.
Identification & measurement
Let’s begin to drill down into how to develop specific, KPIs for your catering business. First you need to identify the high level KPIs within your company:
1. Revenue & Net Profit
2. Cash Position
3. Long Term Debt
4. Brand Awareness
5. Customer Satisfaction
6. Online Communications
7. Internal Communications
8. Employee Engagement
9. Talent Retention
10. Level of Service
11. Product Quality
12. Execution Errors
Here are some suggested ways to measure each one of them.
1. Revenue and Net Profit KPIs.
Measure month-by-month, year-to-date, same month a year ago, year-to-date a year ago, and of course, compare to your budget for the year.
2. Cash Position.
Cash is king. The more we have, the stronger we are financially. The acid test ratio is a great measurement and shoud be at least 1. Here’s the formula:
3. Long Term Debt.
Obviously, the less debt you have, the better. Measuring monthly is a great indicator, and the amount of debt should be declining, month-by-month.
4. Brand Awareness.
This one is much more difficult to measure; however, one way to do this is to determine the percentage of the catering market in your area that you have. The larger the share, the better the brand awareness.
5. Customer Satisfaction.
Every caterer should have a post event survey sent to each client. This offers a very easy way to measure satisfaction. There are a couple of ways satisfaction can be measured. One is to use the 1–10 scale. You can also measure your satisfaction on sites such as Google, Wedding Wire, Yelp, and The Knot. (I highly recommend that you make it easy for your satisfied clients to post a review on these sites. Simply send them a pre-prepared form letter that you personalize with quick links and instructions.)
6. Online Communications.
Find out your Klout score (shoot for 45 or higher). Also, you can measure your fan numbers on social media sites such as Facebook and Instagram.
7. Internal Communications.
The best way to measure this is to survey your employees. (I was blessed with a student intern who interviewed my team and reported results.)
8. Employee Engagement.
This one can also be an internal survey, with some very simple questions, or you can outsource it (which can be costly), but will give you excellent feedback. Engaged employees are better employees.
9. Talent Retention.
This equates to the number of excellent employees who leave as a percentage of the number of full time staff. The lower the better. This should only be for staff members who leave for a better position and should not include moving out of the area, or of course, those you have terminated.
10. Level of Service.
This one can include metrics such as the length of time it takes to dish up an entrée at a plated meal event, to the average wait in line at a buffet or food station. Additionally, in your customer satisfaction survey (noted above) you should have a separate line for service.
11. Product Quality.
Like level of service (above), this KPI can be measured by your clients in post event surveys. Another measurement can be the percentage of new weddings and events you close after a food tasting for an unbooked client. And of course, your team members will give you excellent feedback if you ask them. Sometimes our staff members are more critical that our clients.
12. Execution Errors.
Measure the number of issues that arise at each event for things such as missing items, number of trips to get more of a supply or product, or quality issues with food or service. For those of you readers who truly want to dig deep into this topic, buy and read a copy of Six Sigma for Dummies. It will be an eye-opener.
That’s it for this month! Let me know if you decide to take the KPI Challenge.
Get Fresh, September 2016
