How to Properly Forecast for Restaurants

The Value of Forecasting in Restaurants

The information provided by sales forecasting is greatly beneficial for restaurant industry businesses. Forecasting sales assists with a variety of important business processes, ranging from inventory management to new restaurant expansion efforts.

Benefits offered as a result of proper restaurant sales forecasting include-

1. Optimized decision making- A restaurant forecast uses historical sales data to predict future sales that a restaurant may anticipate. Although a completely accurate forecast is close to impossible to achieve, knowing the general range of sales projections is immensely helpful for restaurant industry professionals to make better decisions.

For example, you may be wondering if a sharp increase in sales projections means that it is a good idea to open a new restaurant location. Instead of basing this important decision on intuition or emotions, your restaurant sales forecast allows you to make data driven decisions that are much more likely to result in long term success.

Or perhaps your sales projection predicts that you will not break even until many months down the line. Having a more realistic idea about your available finances decreases the likelihood of making a catastrophic investment that your business cannot afford.

2. Labor costs management- Labor costs heavily affect restaurant profitability and should therefore always be a business plan priority. Forecasting helps restaurant owners to anticipate their scheduling needs and make sure they have enough employees on staff.

If the decision is made to open a new restaurant, restaurant owners can use sales forecasting data to make better staffing decisions. Restaurant forecasting analyzes average daily seat turnovers and anticipates any seasonal variations that may require a modification of staffing requirements. It helps to forecast future sales that could be coming in to the business.

If your restaurant is understaffed the likelihood of bad customer service experiences is increased. If your restaurant is overstaffed, your labor costs will be wasteful and negatively affect your bottom-line profitability.

3. Inventory management- A proper sales forecast assists with inventory management optimization. Accurate sales forecasting helps avoid underordering or overordering inventory products.

Underordering can leave your kitchen staff unable to create certain menu items and overordering can result in wasted food that can gnaw away at long term profits.

How to Conduct a Forecast for a Restaurant

Restaurant sales forecasting should be reviewed at least on a monthly basis to make sure that your sales projections and actual sales are accurately matching up. Restaurant owners may also choose to update their sales forecasts whenever a major change occurs.

A major change could range from newly implemented menu items to labor costs fluctuating. As restaurant business professionals become more comfortable with sales forecasting they will be better equipped to use the information provided for their business plan and operations.

While many restaurant POS systems can automatically generate a restaurant sales forecast, some businesses may choose to create their sales forecasts manually. The steps for creating a restaurant sales forecast include-

1. Calculation of sales data- Understand how many customers are at your restaurant at full capacity and how much projected revenue you expect to receive. Of course, only assume your restaurant would be operating at full capacity if that is realistic.

Depending on what capacity you anticipate your restaurant will be at, you can estimate the profit generated by the average check size per person. Use this sales data to estimate sales for the best and worst case scenarios.

Finding a balance between high and low sales estimations will provide a better idea about your restaurant's daily, weekly, and monthly sales projections. Make sure to consistently compare your sales forecast with the actual sales data in order to better understand your forecasting process and ideally improve your forecasting accuracy overtime.

2. Sales data utilization- If you choose to analyze sales data manually, you may spend a lot of time sorting through complex data. Unfortunately, this can result in wasted labor costs and decrease the overall productivity of your employees.

Alternatively, a restaurant POS system can easily summon and sort sales data for your review. Some POS systems even incorporate inventory management automatically, which majorly streamlines your business operations.


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  • Restaurant sales forecasting provides restaurant owners with important sales data that can be used to make better, data driven decisions.
  • Sales forecasts help with a variety of business processes, ranging from inventory management to labor costs reductions.
  • Data driven decisions are more likely to be sustainable long term, restaurant industry professionals should carefully consider decisions ranging from opening a new restaurant location to renovating existing locations.
  • Sales forecasts should be at least reviewed monthly to forecast future sales projections with actual sales and may need to be revised for any business changes.
  • While some restaurant owners may choose to manually predict their sales projections, others use the data within their restaurant POS system to automatically create restaurant sales forecasts. Various POS systems even offer inventory management software to even further streamline restaurant industry operations.

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