Is Your Restaurant Table Turnover Rate Boosting Revenue?

Restaurant table turnover rate is a magical tool!

What am I talking about?

It is one of the most powerful analysis tools to boost revenue in a restaurant.

And restaurant profit margin too.

How is that you ask?

Recipe 1 of Financial Literacy for Beginners - Ultimate Cookbook is on restaurant table turnover rate.

And how managing that boosts restaurant revenue.

Click to know more about Financial Literacy for Beginners - Ultimate Cookbook.

This recipe will show in a simple way why restaurant table turnover rate is so powerful.

Still not convinced.

Let’s dive in right away.

Watch Video

Begin by Watching this 2 minute slideshow video

This Recipe will cover:

Restaurant Table Turnover Rate & Seats Available

Let’s begin with Taste Buds Restaurant.

A 40 seat restaurant serving burgers, soup and salads.

Seats Available in a restaurant is the asset that works with Restaurant Table Turnover Rate.

Restaurants may have different meal periods.

However, the seats available remain the same.

Seats Available is also known restaurant seat capacity.

We will look at three scenarios of use of the seats available.

Restaurant Table Turnover Rate and Covers Served

Covers Served are the business volume a restaurant generates.

Restaurant Table Turnover Rate is closely linked to covers served.

Covers are one of the two major contributors to restaurant revenue (the other is check).

You could call covers served as the utilization of the asset (seats available) in a restaurant.

See below:

Relationship between Seats Available and Covers Served

Restaurant Table Turnover Rate is related to:

• seats available and
• covers served.

Higher the covers served versus seats available, higher the table turnover rate.

And when the table turnover is higher, we will see the magic happen!

What magic is that, you ask?

That magic results in higher restaurant revenue.

How to Calculate Restaurant Table Turnover Rate

So, how is Restaurant Table Turnover Rate calculated?

See the slide below on the calculation.

How to Increase Restaurant Revenue

How do we use table turnover rate to increase restaurant revenue?

This is through a process of targeting more covers to serve every day than the seats available.

Of course, this targeting has to be followed up with action.

Action begins with setting up a daily covers to be served target.

See Chef’s Take below on some specific strategies to achieve an increase in restaurant revenue.

Chef’s Take - Strategies to Boost Restaurant Revenue

You need to understand two key concepts before laying out strategies:

• types of restaurants and 
• meal periods

Let's see how that works.

Types of Restaurants and Meal Periods

Different restaurant types have different table turnover rates.

For example:

An All Day Dining restaurant tends to have higher table turnover rate than a fine dining restaurant.

Why is this?

Because fine dining meals are longer in duration as they are accompanied by wine or other spirits.

At the same time, table turnover rate is also different for different meal periods.

Breakfast tends to to have the highest table turnover rate.

This is often because a breakfast buffet is laid out.

Meal period duration for a buffet breakfast is shorter than that of an a la carte one.

Dinner meal period table turnover rate tends to be the lowest.

This is because the meal is often accompanied by wine or other spirits.

Of course a dinner buffet might make the table turnaround relatively faster.

How to Increase Restaurant Table Turnover Rate

Here are some strategies to adopt.

Carefully analyze the customers that come to your restaurant.

Are they in groups of 1-2, 3-5 or higher numbers?

Tabulate how many covers were served for these groups.

Are your table sizes in sync with the group sizes that come to your restaurant?

For example:

Say, more of your restaurant covers were achieved with bigger groups.

If you have more tables of 1-2, then that is a mismatch.

You are clearly leaving money on the table (pun intended!).

Arrange table sizes and take bookings keeping in view a higher table turnover rate.

Bookings are another avenue.

If the restaurant is popular and regularly busy, try and book bigger table sizes.

You can even offer a bigger discount for groups of 5 or more.

Traps to Avoid

Increasing Restaurant Table Turnover Rate is closely linked to customer patronage.

Merely filling up the restaurant seats is not enough.

Unfortunately, many restaurants fall into this trap.

And then they have difficulty maintaining growth in restaurant revenue.

To sustain higher revenue, you have to bump up covers served

This can be achieved through bigger group sizes.

In a way, you are increasing number of customers per table.

This is one way of increasing restaurant table turnover rates.

Other ways are to:

• encourage customers to return
• Provide loyalty discounts
• Create a loyalty card with benefits
• have regular promotional offers

A higher table turnover rate can make up for even a lower price in contribution to restaurant revenue.

What is the Magic of Restaurant Table Turnover Rate?

1.  Serving more covers than the seating capacity
2. Turning over tables more than once of each seat available
3. Using same asset (seats available) multiple times in a meal period

Download PDF of this Recipe for Easy Reference

Recipe 2 Coming Up...

Managing Inventories for a Better Bottom Line

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