Business Accountants: Optimizing Financial Metrics for Restaurants and Cafes in New Zealand


Achieving financial fitness for your hospitality business requires a focused strategy and clear-cut goals, akin to achieving personal fitness goals with a dedicated trainer. As a hospitality business coach, I’ve assisted enterprises in devising “fitness plans” with metrics that are instrumental in their financial success.

Key Financial Metrics for Success in Hospitality:

Establishing and controlling critical financial metrics is pivotal for sustained success in the hospitality industry. Here are some best practice metrics that successful businesses should aim for:

  1. Overheads: Target a range of 25-30% to optimize profitability.
  2. Prime Cost: Aim for a 60% ratio between the cost of goods sold (COGS) and labor expenses.

Sadly, many hospitality businesses in New Zealand fall short of these benchmarks, often exceeding 70% in prime cost. This inefficiency in managing costs significantly impacts the net operating profit, akin to a sinking ship.

Improving Prime Cost:

To enhance prime cost and boost profitability, here’s a strategic approach:

  1. Establish a 60% Prime Cost Goal: Setting a target primes your business for better cost management, enhancing financial performance.

  2. Determine the Ratio: Depending on your establishment’s style, select an appropriate COGS-to-labor ratio (e.g., a cafe might aim for 25/35, a pub for 28/32).

  3. Implement Effective Systems: Utilize comprehensive systems like Loaded to efficiently manage prime cost, leveraging its full potential.

  4. Seek Expert Guidance: Surround yourself with industry experts who can mentor and guide you toward optimal financial practices, ensuring your business stays on track.

Achieving Best Practice Results:

Belief in your ability to achieve these metrics is crucial. By implementing the right systems, fostering the correct culture, and seeking guidance, your hospitality business can attain industry best practice results. This proactive approach will transform your enterprise into a thriving, sailing venture, benefiting both you and your team.

Financial fitness is achievable with the right strategy and commitment to effectively manage key metrics. By leveraging these insights and implementing robust systems, your restaurant or cafe can navigate toward sustained financial success in New Zealand’s competitive hospitality landscape.


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