EHS Newsletter Issue No. 8: Guest Counts Really Count
FRONT PAGE NEWS
August Keeps Its Cool
August was a steady-as-she-goes month for EHS clients. Sales came in roughly flat compared to last year, with a few strong performers balancing out modest dips at most locations.
Profitability nudged up for the group overall, but it was a split decision: about half our clients grew their bottom line, and half saw it slip.
The bright spot is behind the bar. Beverage cost improved at most restaurants and food cost held steady, a sign that pricing and purchasing discipline is paying off. Hourly labor stayed close to last year, while total labor ticked up slightly.
Our advice: Keep doing what's working. Stay tight on prime costs, keep building your base of regulars, and look for fresh ways to grow sales through events or new revenue centers.
Zooming out: the national picture The National Restaurant Association's July data tells a similar story:
Still, the NRA remains cautiously optimistic in a mixed outlook. In that context, flat is looking pretty respectable.
Butts in Seats: When's the Last Time You Counted Yours?
Legendary restaurateur Danny Meyer has long argued that guest count, not top-line sales, is the truest measure of a restaurant's staying power. In other words: count the butts, not just the bucks. We couldn't agree more.
It's a multiplier, not a vanity stat. Guest count is the baseline your revenue gets built on, for two big reasons:
Each guest is your best marketing hack. Word of mouth is still the most powerful advertising around, and more guests means more recommendations.
Every initiative scales with it. A new menu item or upselling push only works on the people in your seats. More guests, more yield.
The quiet enemy: attrition. Of course, even regulars don't stick around forever. New spots open down the block, routines change, people move. So even if you keep doing the same great work, guest count will likely slip if nothing else changes. Standing still is actually sliding back.
So what's the plan?
Keep the pipeline full. Since regulars will always drift, the job of creating new ones is never done. And marketing can get someone in the door once, but it takes a great experience to bring them back. That means making every visit matter and building a real relationship with everyone who walks in.
Know your numbers. To see if it's working, you have to track it. OpenTable, Toast and third parties like DoorDash and Uber Eats all have this data. Watch returning vs. new guests, not just the total.
Garbage in, garbage out. Those numbers are only as good as the people and systems capturing them. Do your servers and hosts know why it matters? Are you cross-checking sources? Making smart decisions on good data is hard. On bad data, it's nearly impossible.
Set a goal you can actually hit. Once you trust your data, give it a target. After a new restaurant's guest count peaks (usually around year three, though it varies a lot), aim for just 1% growth a year and check in month over month. To maintain is very good. To improve is EXCELLENT.
The math that makes it click.
Increasing guest count by 1% might sound small, but watch what happens when it teams up with a simple upsell and a modest price increase.
Every restaurant's sales come down to one simple equation: Guests × Average Check = Sales
Say you serve 40,000 guests a year at a $25 average check. That's $1,000,000 in sales. Now make three modest moves:
Grow guest count 1%. 40,000 guests becomes 40,400.
Upsell a new menu item that lifts check average 1%. $25 becomes $25.25.
Take a standard 3% price increase. $25.25 becomes about $26.01.
New math: 40,400 guests × $26.01 = roughly $1,050,700.
That's $50,700 more in sales, a 5.1% jump, and not one of those moves was dramatic.
(Why 5.1% and not 5%? Each boost builds on the last, so they stack rather than simply add up.)
Not early retirement on its own, but a clear sign of a healthy business.
High Tech, Human Touch:
AI is here. So are we.
We've been getting a lot of questions lately about AI and what it means for restaurants and restaurant accounting. The short answer: there's a lot to be excited about. AI can speed up data entry, flag trends faster and free up time for the work that really matters. But every number still needs to be checked, every report proofread, and every tool needs a human behind it who knows your business. And as AI anxiety grows, it's worth remembering that hospitality has always been about the human touch. No algorithm can greet a regular by name, and no chatbot will ever replace the connections that keep guests coming back. We encourage folks to let robots handle the busywork, while the humans run hospitality.
EHS: Fifteen Years, One Fabulous Feast
EHS is Fifteen! That's fifteen years of reconciliations, P&Ls, prime cost pep talks and more restaurant meals than we could ever count (though we'd certainly try). We've watched clients open their doors, grow, pivot, weather a pandemic and celebrate their own milestones, and we're endlessly grateful to have been in the trenches with every one of you.
So on September 23, we did what any self-respecting restaurant accounting firm would do: we celebrated at a client's table. Our friends at The Duck Inn rolled out a custom menu that was, frankly, ridiculous in the best way. Smoked burrata with black truffles and Klug Farm stone fruit. Foie gras terrine with spiced fig gelée. Huitlacoche gnocchi, Japanese BBQ duck wings and a rotisserie duck with duck fat potatoes that deserves its own newsletter. And just when we thought we couldn't eat another bite, dessert arrived: a foie gras crème brûlée and a maize tres leches with sweet corn ice cream. We regret nothing.
The night was also a chance to toast a milestone within the milestone: Trina Rials is celebrating 10 years with EHS! A decade of keeping books clean, meeting deadlines and keeping clients happy is no small feat, and we simply wouldn't be who we are without her. Here's to Trina, to the incredible restaurants who trust us with their numbers, and to the next 15 years.
Who says accountants are boring? We love what we do because we love restaurants!
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