Wouldn’t it be great if you could wave a magic wand and predict exactly how your restaurant sales will look in the future? Think how easy it would be to manage your inventory, plan your rotas, and just generally manage every aspect of the business 🪄
Unfortunately, there’s no such thing (sorry to be the bearer of bad news).
However, there are ways you can improve the accuracy of your restaurant sales forecasts to get a better idea of how things might pan out in the future.
In this article, we’ll show you how you can make your forecasts as accurate as possible. But first, let’s clarify what a sales forecast actually is.
What is a sales forecast for a restaurant?
A restaurant sales forecast estimates how much revenue you hope to make over a certain period. It uses historical data (like your previous sales and revenue) to predict how much you’ll make in the future.
When done well, sales forecasting helps you track sales performance and make informed decisions about your business. Here’s how:
- Improve your inventory management. When you know how many sales you’re going to make over a certain period, you can align inventory with customer demand. This means ordering the right amount of ingredients, preventing overspending and minimising food waste.
- Optimise your labour scheduling. Sales forecasting helps you predict busy and quiet periods in your restaurant. As a result, you can create demand-based schedules to ensure you have enough staff on the roster during busy periods, but that you’re not overstaffing quiet periods. This means you don’t overspend on wages, keeping your bottom line as healthy as possible.
- Maximise your resources. With accurate sales forecasts, you can improve your budget and resource allocation to get the best results. For example, you might allocate more staff to the front-of-house to handle orders and ensure timely service during peak periods.
All of these things improve your entire restaurant operation, putting you in a strong position to increase your bottom line.
Nory success story 🥳 Find out how Masa used Nory to accurately predict sales forecasts within a 3% margin in just three months. As a result, the restaurant has improved its financial planning, budget optimisation, and improved labour scheduling.
“Constantly being able to see what your sales are, what your cost of labour is — and trusting that is really valuable.”
Shane Gleeson, owner and founder at Masa
How do you calculate sales forecasts for restaurants?
Here’s a simple sales forecasting formula using historical data:
Expected number of diners in x Average food and drink sales = Simple sales forecast
This calculation allows you to:
- Review your historical data
- Identify sales trends
- Use this information to predict future revenue, profit margins, and more
Seems pretty simple, right?
Well, that’s because it is — but it’s not 100% foolproof. There are hurdles that can impact the accuracy of this formula.
Let’s say Taylor Swift’s in town for a show. Think about how many more customers you might get when her concert is in the same city as your restaurant. Those numbers will likely increase.
But Taylor hasn’t been in town before, so you don’t actually know how this event can impact your revenue. This means your historical data isn’t accurate when forecasting sales.
So what’s the solution?
Let’s find out.
How to improve your sales forecasting methods to increase accuracy
The first step is to think about the external factors that can influence your future revenue (like T. Swift coming to town). Then, you’ll incorporate the impact of these factors into your forecast alongside your historical data.
Here are some topics to analyse when you want to increase the accuracy of your sales forecasting methods.
Consider seasonality
Different times of the year can influence how many people come into your restaurant. Think about the Christmas period as an example. You might see an increase in restaurant sales because more people are eating out at festive parties or work events.
Hot tip 🔥 Use Nory’s AI features to predict how busy you’ll be at different times of the year, like bank holidays or festive events. That way, you don’t have to worry about figuring it out yourself!
Think about your location
The location of your restaurant can impact revenue in different ways. A city centre location vs. a suburban area, for example, will experience different trends in customer demand. Chances are, the city centre picks up a lot more walk-in customers being in such a central and busy spot.
But a smaller, local restaurant might have a higher number of regular, returning customers. Plus big cities can be subject to travel issues (like train strikes) that can impact the number of dine-in customers.
Check the weather
Believe it or not, the weather can impact how many customers walk through your door. So, if you have a cold, damp week on the horizon, you might want to take that into account for your forecast (excuse the unintentional pun).
Use technology
With the right tools in place, you can make pretty accurate forecasts. Take a look at Nory as an example.
With our AI performance management features, you can predict hourly sales with 90-95% accuracy. This gives you incredible insight into real-time performance of your restaurant, helping you create detailed and accurate sales forecasts.
If you don’t believe us, look at how Clean Kitchen increased its gross profits by 4% with our sales and performance insights.
“Nory will be essential in the next phase of our business. We believe in the system, and we’ve seen how it fits what we need to grow as a business.” – Adam Jefferies, Head of Operations at Clean Kitchen
Track and manage restaurant performance with Nory
As awesome as it would be, no one can predict the future. But with the right skills, knowledge, and technology, you can get pretty darn close.
Use Nory to track your sales performance in real-time, creating accurate forecasts and optimising your operations to increase profit margins and boost your bottom line.
FAQs about forecasting restaurant sales
What type of forecasting do restaurants use?
Restaurants use different forecasting methods to predict sales, including qualitative (reviewing customer behaviours and preferences) and quantitative (analysing the numbers).
Combining these methods is the best way to get a well-rounded picture of your performance, predicting future sales with as much accuracy as possible.
To improve your predictions even further, use a restaurant management platform like Nory to handle the forecasting for you.
How do you estimate sales for a new restaurant?
If you don’t have any historical data to analyse, don’t worry — you can create sales forecasts with other types of data and insights. Performing market research, understanding local demographics, and analysing competitors are good places to start.
Why is forecasting important in restaurants?
Forecasting plays an important role in anticipating demand, which informs so many other crucial aspects of your restaurant operation. It helps you improve your inventory management, optimises your labour schedules, and prevents overspending. As a result, you have a better chance of increasing profit margins and growing your business.
