Technology is on the menu for many restaurants looking for ways to improve their operations, enhance the customer experience and increase profits. One of the tech tools you may not have considered yet for your restaurant business is a people counting system. These systems are especially popular in the retail industry, but some restaurateurs are catching on to the fact that people counting systems also have some valuable applications in their sector.
These systems can help restaurant owners and managers monitor their occupancy levels for social distancing requirements and provide them with important metrics for managing and improving their businesses. If you’re interested in these major benefits, take a moment to learn more about people counting systems and how you can use them in your restaurant.
Read the full article or skip to a specific section:
- What Are People Counting Systems?
- Using People Counting Systems to Monitor Restaurant Occupancy Limits
- Using People Counting Systems to Improve Restaurant Profitability
- Considerations When Choosing the Right People Counting System for Your Restaurant
What Are People Counting Systems?
If you’re new to the world of people counting systems, there are a few things you need to know. People counting systems can consist of only software or a combination of hardware and software. In either case, they help you monitor the number of people who visit your business. This can help with tracking in real-time to remain within capacity limits and providing data that can help you measure your restaurant’s success.
Let’s look at the most popular types of systems available on the market today:
1. Software-Only Systems
Some systems use software installed on your devices, such as a touch-screen tablet or mobile phone, to facilitate people counting. In these systems, you need employees stationed at each entry point of your restaurant. The employee will indicate on their device each time a person enters or exits the building.
Even if you have several entrances and exits, you can have multiple employees track people coming in or going out. The software will combine the input from all workers to keep an accurate count of the total number of people inside at any given time.
2. Thermal Overhead Sensors
Overhead counting systems with combined hardware and software have some advantages over software-only programs since they automate the process. Thermal overhead systems register when a person walks in your restaurant by sensing their body heat.
These systems are highly accurate, and they have multidirectional sensing. In other words, they can tell whether a person is entering or exiting your restaurant based on the direction they’re moving toward. They can even sense how people move around inside your restaurant.
3. Video-Based Overhead Sensors
Another type of overhead sensor is a video-based system. These processes use video cameras mounted on the ceiling to visually track people entering and leaving your restaurant.
This can help you monitor the number of patrons in your restaurant. These systems can also filter out children and strollers, so you can count only adults if you want. Video systems require adequate lighting to sense people’s comings and goings.
Using People Counting Systems to Monitor Restaurant Occupancy Limits
All restaurants have occupancy limits. Building inspectors set these limits according to guidelines from the National Fire Protection Association (NFPA). If your restaurant is divided into separate rooms, such as the main dining area and a private banquet or set of party rooms, you’ll have distinct occupancy load ratings for each of these spaces. When restaurants purchase tables and chairs and arrange their seating, they should make sure their restaurant’s seating capacity does not exceed their official capacity limits.
Normally, once you’ve arranged your restaurant’s seating, you never have to give your occupancy limits a second thought unless you notice there are areas where too much congestion occurs and people are uncomfortable.
The Importance of Occupancy Limits
In many cases, state and local governmental bodies have imposed new restrictions on restaurants to ensure they avoid overcrowding and encourage social or physical distancing. This practice is defined by the Centers for Disease Control and Prevention (CDC) as remaining 6 feet apart from people who are not in your household. This distance can provide a buffer between occupants that prevents them from passing germs, as they would be more likely to do if they were close together.
For many restaurants, promoting social distancing means adjusting their capacity limits for the time being. Even in the absence of government mandates, restaurants should still adjust their capacities and layouts as needed to follow CDC guidelines and create safe environments for their customers.
How to Measure Restaurant Occupancy Limits
Some local mandates require restaurants to limit their capacity to a certain percentage of their maximum load rating. For example, bars and restaurants in Minnesota must restrict their capacities to a maximum of 50%. If their normal capacity limit was 150 people, it would now be just 75 people. Limiting capacity according to a percentage can be a helpful way forward for restaurants looking to reduce crowding.
However, you may be able to arrive at a more precise calculation by determining the number of customers or parties you can fit in your dining room while maintaining 6 feet between tables. Normally, restaurants should allow at least 18 inches between seats that back up to each other, but this amount of space isn’t enough for physical distancing.
The CDC recommends reworking your restaurant’s layout to allow for adequate social distancing. Once you’ve created an arrangement that enables this, count the number of seats to arrive at your dining area’s new maximum capacity. Keep in mind that this number does not include waitstaff, so it is best to err on the side of allowing a bit of extra space.
You may think that spacing out tables and seats is enough to ensure you stay within your new capacity limits, but that isn’t necessarily the case. You could have people crowded in your lobby, for instance, causing you to exceed your restaurant’s safe capacity limits.
This is where people counting systems can prove extremely useful. Whether by using employees equipped with occupancy counting software or automatic people counting devices, your restaurant can accurately track the total number of people inside at any given time. This way, you can be sure you’re staying within your new maximum capacity rating and encouraging social distancing.
Accurate occupancy tracking is especially critical if you’re trying to follow mandates from your local government. Even without those mandates, though, you want to demonstrate to the public that you care about their well-being and are serious about your social distancing policies. By using a people counting system and enforcing your capacity limits, you can avoid unsafe instances of overcrowding.
Using People Counting Systems to Improve Restaurant Profitability
People counting systems are helpful for more than just monitoring capacity limits. They can also help owners and managers develop strategies to increase sales in restaurants by providing critical data. There are many metrics, also called key performance indicators (KPIs), restaurants can use to measure their profitability.
Some of these metrics involve costs and other things that do not relate to occupancy. Some KPIs, however, deal with foot traffic, conversion rates and other factors associated with the number of people who enter your restaurant and enjoy a drink or meal there. A people counting system can help you track these KPIs, which subsequently gives you enhanced insight into how your business runs and how you can improve your building layout to better serve customers.
Profitability Metrics for Restaurants
Restaurateurs should pay attention to various metrics to gain a full and objective picture of how their restaurant is doing and where they can improve their practices. When you make a change, you can use the data once again to see what effect it had. Simply relying on general impressions and hunches is a poor way to do business since these things can often be wrong. Instead, you should rely on data.
What sort of data? Restaurants should start by establishing variables like their fixed overhead costs and break-even point so they understand the baseline they need to meet to be profitable. Aside from these basic measurements, some KPIs that restaurants should consider tracking include:
- Cost of goods sold (COGS): The cost of goods sold is essentially the cost of your inventory. In this case, those are the ingredients that go into making the dishes you sell. You need to know this cost so you can determine which prices to put on your menu and how much you need to sell to be profitable.
- Labor cost: Another important number you need to know is how much you spend on compensating your employees. Adding your labor costs and COGS together gives you your prime cost. You also want to identify the labor cost percentage. In other words, what percentage of your total sales will pay your employees?
- RevPASH: A helpful way to measure profitability in the restaurant industry is revenue per available seat hour (RevPASH). To calculate your restaurant’s RevPASH, you divide your revenue for a certain time period by the number of seat hours in that same period. This tells you how much money, on average, each seat is pulling in.
- Average ticket size: This KPI is also commonly called sales per head. This metric is a measure of how much the average diner or party spends at your restaurant. You’ll typically want to note these averages separately for different times of day, such as lunch and dinner service.
- Table turn time: You should also know the average amount of time a party spends eating and relaxing around a table in your restaurant. This can help you determine how many people you can host during an average day or lunch or dinner service.
- Occupancy rates: It’s also helpful to know what percentage of your tables or seats are occupied with paying customers at any given time. In addition to the average table occupancy, you’ll want to note which times of day are busiest and which are slowest so you can plan and staff accordingly.
- Conversion rates: One of the most important KPIs you can measure is your conversion rate, especially if your restaurant is in an area with a lot of foot traffic where people come in to check the place out or view your menu. This is the percentage of people who step through your front door who end up making a purchase.
- Gross profit: Gross profit is the money left over after you’ve subtracted the cost of goods sold from your revenue. You can calculate this cost for specific periods to determine the gross profit you made during that time. Keep in mind that some of your gross profit will go to cover fixed overhead costs.
These numbers aren’t very helpful in a vacuum. Restaurants often compare their KPIs to restaurant financial benchmarks to determine the health of their businesses. For instance, understanding the norm for restaurant industry sales can help you know whether yours are on point. You can also use KPIs to compare the performance of various restaurant locations or compare your restaurant’s profitability at different seasons or year over year.
Using a People Counting System to Help You Manage Your Restaurant
Notice that some of the KPIs above require you to know how many people are visiting your restaurant. In some cases, you could use a modern point of sale (POS) system to track sales data, but this will only give you information about tickets. To know the precise number of people in your restaurant and to determine conversion rates, you need a system that accounts for every person who walks into your establishment. You can get this data with a people counting system.
Using a people counting system to measure restaurant traffic has some important benefits for tracking your restaurant’s performance and helping you strategize to improve your business. The data your system provides can help you with:
- Scheduling: Your people counting system could give you valuable insight into what days of the week or times of day are busiest and which are slowest, so you can schedule staff strategically. This can help you avoid under- and overstaffing, which could then lead to reduced labor costs.
- Promotions: Accurately understanding slow times can also help you determine when you may need to offer a special promotion to drive more traffic to your business. If you do create promotions, you can use your people counting system to determine how successful or unsuccessful your initiative was in driving more traffic.
- Conversions: Strategies to increase sales in restaurants must start with an accurate understanding of your current conversion rates. Comparing your people counting data to your sales information will show you any gap that exists in the people who come in and people who are paying customers. These are the potential patrons who decide to leave rather than be seated or order at the counter. If you have a conversion rate that is less than ideal, it’s time to find ways to convert these skeptical walk-ins.
- Traffic trends: You can also use this data to determine whether your restaurant is experiencing growth or a decline in popularity. This could change from quarter to quarter or year to year. You can also compare the traffic levels at different restaurant locations. You may find your marketing strategy needs to focus on how to increase foot traffic to your restaurant.
- Footfall patterns: If you have multiple entrances, you can also use people counting systems to see which entrances your patrons use most, which could differ depending on the time of day or other factors. This can help you decide where to place host podiums or signs directing customers to seat themselves or telling them where they need to go.
- Customer experience: Ultimately, tracking foot traffic numbers and patterns in your restaurant can help you deliver an improved customer experience. Whether through better staffing decisions, an adjusted layout or any other improvement you’ve made, customers can enjoy a better experience at your restaurant.
Considerations When Choosing the Right People Counting System for Your Restaurant
According to an industry report from Toast, a provider of hardware and software solutions for restaurants, 95% of restaurateurs believe restaurant technology improves their business efficiency. What holds restaurant owners back from purchasing new technology for their businesses? In many cases, it’s the overwhelming nature of all the tech options out there today. How can you know what you really need?
In addition to important tools like POS systems, digital menu screens and online ordering features, you should also seriously consider investing in a people counting system. As we’ve seen, this simple addition to your restaurant can pull in valuable data to help you manage your company more successfully. It could help you significantly as you monitor occupancy levels. The question then becomes, how can you choose the best people counting system for your restaurant?
Consider each of these questions to determine what type of system is best for your application:
- What is your budget? One practical concern you’ll need to consider is your budget. If you want to invest in a people counting system, but you’re working within a tight budget, you may want to consider a software-only solution. Keep in mind, however, that this means employees have to monitor entrances. Alternatively, you could start by leasing a system and then make a purchase later when your budget allows.
- Do you have an outlet near your entrance? If you’re looking at wired systems, make sure you have an electrical outlet near your entrance. If not, stick to wireless ones.
- Do people tend to linger at your entrance? If you have a large entrance where people tend to linger or congregate to wait to order or wait on tables, an overhead video system is probably the best option since it can detect people’s presence even if they are standing still.
- Does your entrance double as an exit? If you have people entering and exiting through the same doors, which is typical for most restaurants, then you will need multidirectional — or bidirectional — sensors that can tell whether someone is coming in or leaving. Multidirectional systems, such as thermal overhead programs, are beneficial for giving you an accurate count of how many people are inside your restaurant.
- Do you have more than one entrance? If you have more than one entry point to your restaurant, you’ll need a system with multiple sensors that coordinate using the same software. This way, you can combine the data from each door to get an accurate count.
Get a Free Quote From Traf-Sys
Some restaurants are installing people counters to meet the challenges associated with the industry. However, as we’ve seen, people counting systems can deliver a whole host of benefits to restaurants by providing valuable data on traffic quantity and patterns. For these reasons, people counting systems will maintain a strong presence in restaurants well beyond the COVID-19 pandemic.
If you’re interested in equipping your restaurant with a people counting system, trust Traf-Sys. We offer a range of hardware and software solutions to help you accurately track occupancy and foot traffic patterns in your restaurant. To get started, reach out to us to request a free quote.