Understand key performance indicators which support the profitably of the
business.
K.P.I – Key Performance indicators.
Key performance indicators or Kpi’s are a tool that businesses use to measure just how
effectively they are achieving their goals.
Using Kpi’s is a way for businesses to quantify their business objectives so they can regularly
check up on there performance and determine where they are successful and where they need
to improve. The Kpi’s a business follows will depend upon its industry and while some metrics will
be important across an organization each department will also track metrics specific to their
own goals.
Within the Diner performance in many different areas is assessed the main areas are Sales,
Marketing, Financial and Customer support. With these areas regularly being monitored the Kpi’s
in our unit may be
Sales
Average Revenue per customer, Customer Forecasts, Food costs, Food costs per head.
Marketing
Sales through marketing investment, website traffic to website lead ratio i.e. how many
become customers through website and social media promotion.
Financial
Stock Values, Profit from Stock, Cost of stock, Profit from sales, Labour costs, Sales &
Costs- Actual versus Budget, Total accounts payable, Labour Forecasts, Wage cost
percentage and wage costs as a percentage of sales.
Customer Support
Complaints per head, Customer satisfaction and lifetime value of a customer.
Some Examples of more specific Kpi’s which is tracked by Elior as a whole for our unit
are
Gross profit
Gross profit is the profit after production and manufacturing costs.
Gross profit = Sales revenue – Direct cost
Gross profit Margin
It is used to determine the effectiveness of your business in keeping production cost in
control.
Gross profit margin= (Gross profit / Revenue) *100
This gives you a percentage figure to see the financial health of the business and see
how efficiently the businesses is operating.
, Operating Profit Margin
Operating profit margin is used to determine how well your doing and how the years
numbers compare to past performances and future projections. It shows what portion of
the company revenue qualifies as income versus how much has been spent to keep the
business running.
Operating profit margin = (gross profit- operating expenses) / Revenue *100
Understand Financial targets techniques and opportunities for
increasing sales in the business.
Financial Management Techniques
Learning how to manage finances is a critical skill that helps to ensure financial stability
in the future. There are positive steps that can be taken to streamline the techniques
you use to manage your money. No matter how good or bad your current finances are
there are always room for improvement.
Setting Goals
It is hard for anyone to begin implementing financial management techniques unless they
have concrete goals for their Financial future.
Budgeting Skills
It is essential to manage the financial performance, creating a budget is the most
effective way to keep the business and its finances on track. Budgeting is the most
efficient way to control your cashflow, allowing you to invest in new opportunities at the
appropriate time.
Budgets are a vital tool in ensuring that you stay in control of your expenditure.
A budget is a plan to
Control your finances
Ensure you can continue to fund your current commitments
Enables you to make confident financial decisions and meet your objectives
Ensure you have enough money for your future projects
It outlines what you will spend your money on and how that spending will be financed.
Benefits of budgets
There are a number of benefits of drawing up a business budget, including being better able to
Manage your money effectively
Allocate appropriate resources to projects
Monitor performance
business.
K.P.I – Key Performance indicators.
Key performance indicators or Kpi’s are a tool that businesses use to measure just how
effectively they are achieving their goals.
Using Kpi’s is a way for businesses to quantify their business objectives so they can regularly
check up on there performance and determine where they are successful and where they need
to improve. The Kpi’s a business follows will depend upon its industry and while some metrics will
be important across an organization each department will also track metrics specific to their
own goals.
Within the Diner performance in many different areas is assessed the main areas are Sales,
Marketing, Financial and Customer support. With these areas regularly being monitored the Kpi’s
in our unit may be
Sales
Average Revenue per customer, Customer Forecasts, Food costs, Food costs per head.
Marketing
Sales through marketing investment, website traffic to website lead ratio i.e. how many
become customers through website and social media promotion.
Financial
Stock Values, Profit from Stock, Cost of stock, Profit from sales, Labour costs, Sales &
Costs- Actual versus Budget, Total accounts payable, Labour Forecasts, Wage cost
percentage and wage costs as a percentage of sales.
Customer Support
Complaints per head, Customer satisfaction and lifetime value of a customer.
Some Examples of more specific Kpi’s which is tracked by Elior as a whole for our unit
are
Gross profit
Gross profit is the profit after production and manufacturing costs.
Gross profit = Sales revenue – Direct cost
Gross profit Margin
It is used to determine the effectiveness of your business in keeping production cost in
control.
Gross profit margin= (Gross profit / Revenue) *100
This gives you a percentage figure to see the financial health of the business and see
how efficiently the businesses is operating.
, Operating Profit Margin
Operating profit margin is used to determine how well your doing and how the years
numbers compare to past performances and future projections. It shows what portion of
the company revenue qualifies as income versus how much has been spent to keep the
business running.
Operating profit margin = (gross profit- operating expenses) / Revenue *100
Understand Financial targets techniques and opportunities for
increasing sales in the business.
Financial Management Techniques
Learning how to manage finances is a critical skill that helps to ensure financial stability
in the future. There are positive steps that can be taken to streamline the techniques
you use to manage your money. No matter how good or bad your current finances are
there are always room for improvement.
Setting Goals
It is hard for anyone to begin implementing financial management techniques unless they
have concrete goals for their Financial future.
Budgeting Skills
It is essential to manage the financial performance, creating a budget is the most
effective way to keep the business and its finances on track. Budgeting is the most
efficient way to control your cashflow, allowing you to invest in new opportunities at the
appropriate time.
Budgets are a vital tool in ensuring that you stay in control of your expenditure.
A budget is a plan to
Control your finances
Ensure you can continue to fund your current commitments
Enables you to make confident financial decisions and meet your objectives
Ensure you have enough money for your future projects
It outlines what you will spend your money on and how that spending will be financed.
Benefits of budgets
There are a number of benefits of drawing up a business budget, including being better able to
Manage your money effectively
Allocate appropriate resources to projects
Monitor performance
