In a restaurant's case, capacity refers to the number of diners that can be served at a time without diminishing the guest experience given the current space and other resources.
Like every other business, effective capacity management is a crucial part of a restaurant's success - it helps determine how well the traffic is actually being managed. No matter how big or small, you want to make sure that every bit of your restaurant space is being used to its maximum potential to provide revenue.
The consequences of poor capacity management at a restaurant are dire - either they will have difficulty in accommodating every diner that walks through their doors, or end up with empty tables, both leading to loss of revenue and customers. Think about it in this way - the more you optimize your capacity, the more guests you can serve, the more revenue you earn.
Capacity vs. Guest Experience
The aim of capacity management is not just to serve as many people as possible, but to do that without compromising on the guest experience.
Let's say you walk into a restaurant stacked with endless tables. Although you are more likely to find a seat, are you going to be happy with the overall experience? Probably not, because with such a large number of people to serve, it's unlikely that the restaurant staff will be able to give you proper time and attention. Plus, the limited space between tables also takes away from the diner’s privacy. No one enjoys when the next table is uncomfortably close.
When restaurants get overcrowded, it strains both the BOH & FOH staff and makes it difficult to manage the floor and even move around in the restricted space without bumping into tables and guests. Servers will not be able to provide a personalized experience, kitchen staff will be too stretched to provide high-standard of food, and over all, the whole experience will be mismanaged and likely unpleasant for the diner.
The key is finding that sweet spot between capacity and the guest's dining experience - you do want to serve them, but you also want them to come back.
There is no "one perfect way" of finding the right balance, it's a trial-and-error strategy. When experimenting with different capacity levels, focus on these factors.
- Look at past data and identify patterns: How were the guest reviews after a packed night? What was the average wait time? How many diners returned after dining at maximum capacity? These data points can help determine whether your capacity management strategy is working or driving diners away so that you can make further changes accordingly
- Ask your servers: Your FOH staff is a treasure chest of important guest information, they know what's happening on the floor better than anyone else. Get a lay of the land from them after a shift to understand whether customers were happy, agitated, felt rushed or were at ease during their meal.
- Be patient: Don't rush through the process - finding the right balance takes time. You're most likely going to miss important steps if you're moving too fast. Doing it slow will ensure you're doing it right
- Evolve with time: Developing your capacity management strategy is not a one-time process, it should constantly evolve to fit your diners' demands and other external factors.
Factors that affect your restaurant capacity
A restaurant's capacity is not just about the number of tables it houses, it goes way beyond that. Factors like your restaurant’s floor plan, time slot management, and table turnover are crucial for creating an effective capacity management strategy.
Your restaurant concept
Fine-dining restaurants operate very differently than casual ones - the same goes for their capacity. As they charge higher prices for exclusive features like ambiance, atmosphere, and guest experience, people expect their visit to be worth the premium they’re paying, as opposed to a casual restaurant where diners go for a quick meal and don't pay much heed to the service. This is where finding the perfect balance between capacity and dining experience becomes more important than ever.
While a casual restaurant can potentially have tables upon tables, diners in fine-dining restaurants demand exclusivity and attention, which can only be provided with limited capacity.
For fine dining restaurants, it's quality over quantity. If you're charging a higher price, you have to give them the bang for their buck.
A restaurant's floor plan is the number of tables and how they are set. The more tables you have, the more people you can serve, but as mentioned earlier, maximizing quantity is not always the right route to take.
The floor plan of a fine-dining restaurant needs to be a lot more open and sophisticated than that of a casual joint, which means fewer tables with better seating facilities. Increasing the number of tables in this case can be counterintuitive, as it affects the guest experience and may lead to a drop in diners.
While your restaurant's regular floor plan is set-up to accommodate as many diners as possible without compromising on guest experience, time-to-time you can also add a few extra seats and tables to create your restaurant's "stretched capacity" to accommodate more diners while still keeping the experience at an acceptable level.
Draw out strategies for your restaurant's stretched capacity in advance to ensure that you don't cross the line into over-capacity while taking in diners. This is especially important when you are taking double bookings at your restaurant.
When used correctly, stretched capacity can help increase your revenue per sq. ft over time.
If you’re unsure about how to get started on creating your floor plan, a lot of online tools exist to assist you with the process. These floor plan creators can help you design it from scratch and visualize changes virtually before you put them into effect.
Revenue per sq ft.
This metric helps restaurateurs find out the value of their business and compare it to industry standards to better understand restaurant performance.
The revenue per sq. ft is determined by the amount of revenue earned by a restaurant in a given period of time. First, pick a time period to measure, and find out the total revenue over that time period. Then divide the same by your restaurant's square footage.
Monthly Revenue/Restaurant sqft = Revenue per sq. ft
The average industry benchmark for revenue per sq ft for fine-dining restaurants is $150-$250. Measuring your restaurant’s turnover rate against this benchmark can help you determine whether it’s performing well or faltering below average. In case of the latter, you may want to look back at your capacity management strategies to identify pain points and improve performance.
The average amount of time customers spend on a table, i.e. table turnover is one of the most important metrics to consider when trying to maximize capacity.
Finding the sweet spot between emptying the table without making your diners feel rushed can help optimize your restaurant's capacity and revenue significantly.
How to calculate table turnover rate for your restaurant
Calculating your restaurant's table turnover rate is simple. First, pick a time period you want to measure, for example the lunch shift, a day, a week, or even a month. Then, find the number of parties served at each table during the chosen time period. The final calculation is done by dividing the number of parties served by the number of tables.
No. of customers served in a given time period/No. of tables = Table Turnover Rate
The average restaurant table turnover rate for most restaurants is 3. However, don't hinge on that number as there is no "one-size-fits-all" approach here. A good turnover rate differs from restaurant to restaurant, depending on various factors. Fine-dining restaurants, for example, usually have a lower turnover rate as guests are paying a premium charge for the dining experience, in which case, the focus should be on increasing the bill size for each table rather than increasing the table turnover rate.
Restaurants with larger tables would also have lower turnover rates as bigger tables take longer to serve than smaller ones.
Knowing your restaurant's average table turnover rate is important to understand how its performance changes over time, and what strategies need to be adopted moving forward. A bad table turnover rate can cause big losses, so make sure to pay attention to this number.
Understand what's more important for your restaurant - quality or quantity. This can help you determine whether trying to improve table turnover rate is the right decision, or if you need to take a different approach for improving revenue.
How to Improve Table Turnover Times at Your Restaurant
When it comes to improving table turnover rates, even the smallest changes can make a big difference. Following are a few tried and tested methods that will surely help you boost your restaurant's profit per table.
- Train your staff: Help your staff provide highly-efficient service throughout the guest's dining experience, starting from the seating process till the check drop. It's simple - the quicker guests are attended to and served, the sooner they are likely to leave. Plus, a well-trained server is also likely to provide a better guest experience. However, make sure that your diners won’t feel like they can't stay. Remember, it's all about finding that balance.
- Handle Volume Gracefully: Although volume can be the key to unlock high turnover rates, not handling it well can lead to disappointment and frustration for both the diner and the restaurant. Find creative ways to deal with increased volume that help you capitalize on it, like setting up a bar space for diners in the waiting line, using the wait to advertise your menu and take pre-orders so that their food is ready by the time to get to their table. Using online waitlists is another great way to keep diners happy - with real time updates and accurate estimated wait times. Make your restaurant's wait time enticing enough that no one wants to leave.
- Don't seat incomplete parties: Incomplete parties can cause a major setback to your service. Request your diners to be seated in your waiting area instead of a table and make a policy to not serve incomplete parties. This policy can also be used flexibly - more rigid during peak times and relaxed during not-so-busy shifts.
- Modify your restaurant design & ambience: Your restaurant's atmosphere, design & layout significantly impact how long diners stay. The type of tables and chairs, the lighting, music, placement - all of it makes a difference. Loud music, bright colors, and using rigid chairs instead of sofas or booths are all likely to encourage diners to leave early. The more relaxing and comforting your environment, the more likely they are to camp out and overstay their welcome.
- Use time slots: By splitting the day into specific time slots (e.g. having two seating intervals for the dinner shift: 8:00pm-10:00pm, and 10:00pm-12:00am), capacity can be more controlled and easier to manage. This sets clear expectations to your diners about how long they can stay and takes away from the hassle of assigning tables. However, there is a flip-side to it. Setting time slots limits your restaurant’s availability. It also means that all your diners will arrive at the same time, making it harder for your staff to maintain a streamlined flow of operations. If used correctly, time slots can significantly improve table turnover rates.
- Optimize your overall restaurant operation flow: A good table turnover rate is the product of overall restaurant operational efficiency. Look at every aspect of your restaurant - FOH, BOH, management, and other smaller processes - to identify pain points and blockages in the pipeline that may be hurting your table turnover rates.
Using technology to improve your restaurant capacity
Digitalization has made capacity management easier than ever. Table management systems with advanced features have increased operational efficiency across restaurants and resulted in a more streamlined and efficient table turnover rate while also improving guest experience.
Here are some ways table management systems help improve revenue for restaurants:
- Customizable live floor plan: Systems like Eat App allow you to create your customized floor layout and update it in real time to allow your staff to understand the current situation of the floor with a quick glimpse.
- Online reservations: Making online bookings easy and accessible through booking widgets encourages people to pre-book their tables, helping restaurants be better prepared and reducing wait times for diners.
- Virtual waitlists: Online waitlists allow diners to enlist themselves on a restaurant's waitlist virtually, just like making an online reservation, which helps reduce long wait queues at your restaurant and improves the overall guest experience.
- Quick service: Table management systems record in-depth guest details and history including allergy information and preferences, making it easy for staff to provide a quick and efficient service to repeat customers.
- Advanced guest reports: Table management systems also help track restaurant performance over-time with in-depth guest and reservation data including customer retention reports, guest review reports, average wait times, and a lot more.
- Time-slot management: The in-built shift management capabilities make it exponentially easier to handle capacity and set-up time slots and seating intervals for both walk-in and online reservations.
- Easy turnover rate calculation: Restaurant staff can also easily record the amount of time spent by each party on a table on the system, simplifying the final turnover rate calculation.
- Online menu & payments: Many of these systems come equipped with digital menu, and contactless dining and payment tools which can help improve efficiency as people don't have to wait around for the server to place their orders or make payment.
- Overall efficiency: Table management systems provide restaurants with one central system for overall management - reservations, waitlists, walk-ins, floor planning, server management, reporting, and so much more, enabling a cohesive management experience eventually leading to streamlined operations and improved table turnover rates.
Wondering if a table management system is a good fit for your restaurant?
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