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Restaurants | Ultimate Guide

Restaurant Forecasting: Expert Advice for Success

Published December 14, 2023

Published Dec 14, 2023

REVIEWED BY: Mary King

WRITTEN BY: Ray Delucci

This article is part of a larger series on Restaurant .

• 1 What Is Restaurant Forecasting?
• 2 Why Is It Important?
• 3 Types of Restaurant Forecasts
• 4 How To Conduct A Restaurant Sales Forecast
• 5 How To Forecast For New Restaurants
• 6 Restaurant Forecasting Strategies
• 7 Restaurant Forecasting Tools
• 9 Bottom Line

Restaurant forecasting is one of the most important parts of managing a restaurant—it allows you to predict revenue at any given time period so you can make decisions on how much food to order or how you will write your staff schedule. It also lets you spot opportunities to create more business. Restaurants typically perform various forecasts; if you are a newer restaurant, I recommend figuring it at least once for the month ahead.

In this article, we will look at what restaurant forecasting is, exactly how it affects your restaurant, how to find an accurate forecast, and other basics surrounding this important aspect of food business management .

What Is Restaurant Forecasting?

Restaurant forecasting—or restaurant sales forecasting—simply put, is the process of projecting your expected revenue for a given time period, using past sales and other historical data. While a majority of different factors can affect what happens to a restaurant day-to-day, an accurate forecast is something that can really help shape how you manage your restaurant and what kinds of costs you will have in relation to food costs, labor costs, and overall overhead.

Why Are Restaurant Forecasts Important?

Restaurant forecasts help you strengthen your business—think of them as the foundation on which you can build a successful food business. Accurate restaurant forecasting allows you to prepare for expected events, preventing potential blind spots and making your restaurant more resilient when the unexpected does happen.

If you are a chef, you no doubt have heard of the term “mise en place.” This translates into the phrase “everything in place.” I like to think of restaurant forecasting as the mise en place of managing your business. Like setting up a station before service, restaurant forecasting gives you a framework that you can build off of and lets you plan how exactly you will execute in many different avenues.

Types of Restaurant Forecasts

There are four major types of restaurant forecasts: inventory, labor, trend, and profit. I recommend figuring them all. But if you are just starting your restaurant forecast and have limited bandwidth, commit to performing at least one forecast for the month ahead, starting with the area where you think your restaurant has the most potential to improve. You can add more forecasts as you move forward.

Inventory Forecasting

How you manage your inventory is also a big factor in your food cost and meeting your financial goals. Restaurant forecasting helps with:

• Preventing food wastage: On average, restaurants waste 4%–10% of their purchased food before it even goes out to a customer. Having historical data for certain days, months, or seasons lets you make an educated guess on how much food you should have on hand for the upcoming days or weeks you are ordering for. This keeps food cost tight and avoids food wastage.
• Seasonal menu planning: Restaurant inventory forecasting also shows what items you should put on the menu more if your menu stays relatively similar season to season. For example, say a butternut squash risotto you served last year often sold out due to higher-than-average sales compared to other menu items. You’ll know to plan to order a little more ingredient-wise and also communicate to your staff that this dish is a successful sale in order to drive more business. You can also work backward, trying to nail down better food costs on this dish to make it even more profitable.
• More efficient planning: Proper forecasting lets you order food inventory more efficiently. You can build out order sheets for each ingredient, with each ingredient showing the amount you should order based on historical sales. You can also get a head start with local vendor orders to ensure you have the proper amounts you need while also being able to bargain for better prices knowing the rough quantity you are working with.

Labor Forecasting

Another key way in which restaurant forecasting can help you plan your business is with staffing plans and labor costs. Your restaurant forecast will include data on seasons, holidays, business driven by local sports games, and much more. For example, say your local professional football team drives customers to your business during football season when they play home games. You can look back at historical data and see what business volume was like, which can give you an accurate example of how you should expect to staff your restaurant in the future.

Restaurant forecasting allows you to accurately predict how much staff you need. You can rely on this data a lot more than just guessing about your staffing levels, and this can make your labor costs and guest experience better in the long run. Staffing cost is another factor in your profit and loss (P&L) that needs to be accounted for. On the flip side, understaffing leads to costs in loss of business or unsatisfied guests that can really hamper a dining experience and drive repeat guests away.

Seasonal Trend Forecasting

One of the other big business data points you can gain from sales forecasting is the ability to see seasonal trends and different revenue periods within a year for your business. Trends such as how temperatures affect your business volume, how seasonal ingredient variability affects dish success, and how much of certain menu items you sell based on time of year are all really important. This is especially true if you change your menu based on the seasons, or if different menu items become available due to weather changes.

Another factor in restaurant forecasting is the fact that you can break down how dishes do during respective seasons, allowing you to tweak your menu and increase profit. For example, say a French onion soup does very well in the Fall and Winter but drops by 70% in sales volume in the Spring and Fall. You can plan to either make much less of this soup in the warmer months, or you can swap it out for a new item. This may sound obvious, but maybe you make a killer chili that the data shows sells a lot year-round. You wouldn’t remove this item and you’d actually find ways to sell more of it. This is how forecasting data on seasonal trends can help your business.

Expected Profit Forecasting

The last major data point you can gather from restaurant forecasting is expected profit for a year, month, or certain given time. This is useful for a couple of reasons. Say some minor reservations need to be made in a given business year. You could easily forecast and find the time of year when closing for a light renovation will have the least amount of impact on your earnings and revenue.

Another important way you can use the expected profit from a forecast is when you need to make bigger purchases. Say you need more cash on hand for new equipment or restaurant updates. You can plan out when your expected revenue and subsequent profit are greatest so that you can keep your business financially healthy while also improving upon it. This can also help you know when to offer promotions, lean into new ventures, and when you can help build out your team with more staff and other necessary costs.

How to Conduct A Restaurant Sales Forecast

Conducting a restaurant sales forecast is very simple. It does require a few key numbers, but the following formula is the industry standard for conducting this task:

• Number of tables: The count of individual tables you have in a restaurant
• Seats per table: The number of individual seats per table in your restaurant
• Average check size: The average amount you expect customers to spend
• Average table turn: The average number of times new guests are seated in a service

Number of tables x Seats per table x Average check size x average turn of table = Sales Forecast

To calculate a restaurant sales forecast, you first need to know the amount of tables you have in your restaurant and how many seats you have per table. You can determine your average check size from historical data. Finally, an average dinner service table will have 2–3 turns. Below is a breakdown of this formula in action.

15 tables x 4 seats per table x $50 average check size x 2 turns per table = $6,000

As you can see, this starts to be important as it almost gives your business a goal of sales to hit. For my time in restaurants, our forecast was our way of trying to figure out if the business we were operating was successful or not. Say your sales forecast for a month of business is $530,000, and you come in at $490,000. Something within the month happened that made you miss your goal. You then have the ability to use historical data to see what impacted sales. You are also given the opportunity to make any necessary changes to get back on track with where you need your sales to be.

In regards to our example above, this final expected forecast would change based on a few reasons. One would be your adjustment of anticipated sales based on historical data. So for example, on a weekday like Wednesday, you may only do 1 “turn” or seating of your tables. So being sure to go day by day in a week is the key to getting the most accurate results. Furthermore, once you get historical data that is accurate, you can set targets on each day of the week so that forecasting runs more smoothly on a month-to-month basis.

How to Forecast for New Restaurants

Forecasting for new restaurants is a typical part of a restaurant business plan. Forecasting for a new restaurant will naturally be less exact than with an established restaurant as there is no historical business data to pull from. With a new restaurant, you are basically using the information you have like:

• Your operating hours
• How many guests you expect to come into your establishment
• How many days you are open
• Estimated average check

These numbers may change—as you could see a lot of business on days you didn’t expect or have slow periods before the neighbors learn of your business—it is good to generate a forecast to reference when starting to write staff schedules and order your first couple of inventories. Your forecast can also help you calculate how much money to set aside for contingency funds.

This formula will give you a rough estimate of sales forecast for a new restaurant:

Number of days open x Average amount of customers expected x Average expected check size per customer = Estimated Sales Forecast

For the formula above, you will also need to set it in a certain window of time. So, for example, you could do a week, a month, or even a quarter. This is the best way to create an estimate for your expected sales when you do not have any historical data, and you are starting out as a new restaurant operator.

To estimate your customer traffic, look at your market research. If you performed market research as part of starting your restaurant (and you should have), then you observed the customer traffic at competing restaurants near your location. Use these figures to inform your proposed forecast. To get your average expected check size per customer, calculate the most likely order for different day parts based on your actual menu and proposed menu prices, along with anticipated customer spending amounts.

Restaurant Forecasting Strategies

There are a few different strategies you can use to get good data from your forecast that will allow you to be ready to execute your business goals. Below are some of the top strategies to keep in mind for your next restaurant forecast.

Look at Historical Data

One of the benefits of tenure in a restaurant is being able to have data through your point-of-sale (POS) system or other sales reporting tools that will give you the ability to look at sales over a large period of time. Say you are a restaurant lucky enough to be five years into your business. You have four full years of data to help you understand business ebbs and flows, non-common busy seasons for your restaurant, and how much revenue you can expect through any time you view throughout the year.

While numbers year-to-year may not match up exactly, you can start to find trends that help you better manage the business. For example, you may notice that your revenue and business volume increase by 10%–15% every year from August to September. This is a perfect way to know that September is a very busy month for you each year, so more focus on adjusting your inventory and staffing levels is key during this time of the year.

Identify Customer & Business Trends

One of the crucial ways to forecast your business is to use the found data you have in order to capitalize on trends that your customers tend to stick to. I worked in a restaurant once where a certain appetizer would sell 35%–50% more during weekdays for whatever reason. It was a unique item that just saw more volume during business lunch hours and other weekday dining occasions. Once we knew this information, we could plan ahead for this item and the busier time periods in which we knew we could expect to sell more.

Other business trends could include season changes and how your business is affected by them. You may also live in a city that has seasonal weather that may affect travel and other ways for your customers to get to your restaurant. Forecasting allows you to guess the future by looking at the past. Finally, you can see overall trends in where your food revenue is coming from. You might find out that your vegetarian item sales have risen by 18% in a financial year. This is all relevant to how you operate, and it all comes from forecasting in order to find the trends you can capitalize on or prepare for.

Focus in on Holidays, Weather Events

Holidays are some of the busiest times for those working and operating in restaurants. They can drive business volume to max capacity and can be very stressful on a business if not prepared properly. With sales forecasting, you can anticipate the volume you should expect based on years past, and you can also find what kinds of foods are being sold most frequently during these holiday services. You can staff up and prepare your cooks for these specific menu items to have a lot of volume. Maybe you need to have more holiday beer on hand for your bartenders to pour. Or maybe you might see that truffles did not sell a lot last year so you save on the cost of bringing them through the kitchen door.

Additionally, many restaurants do have the added challenge of determining weather events and other problems that may come up that impact business but are not in direct control of the restaurant operator. If you work in an area that is affected by snow, you may want to find data on days when more snowfall took place just in case you have an unexpected storm. You can find what customers ordered, how revenue was impacted, and you can gauge how much or how little staff you actually need in these circumstances.

Tune in on Menu Performance

Annual or quarterly audits on how your menu is performing are key in forecasting the business you can expect to do in the coming days, weeks, and months. With sales forecasting, looking at individual dishes, drinks, or dining experiences and seeing the data on how they have sold and performed overall is key in not only restaurant forecasting, but also on what you need to do in order to operate a better business.

You may find some items need to be removed, as they are not moving and not helping your restaurant make a profit. You may also find menu items that do exceptionally well, and you then will go ahead and highlight them more to the customers you are serving. This is a crucial way to look at your business volume in a granular way in order to adjust and pivot into more revenue-earning opportunities.

Restaurant Forecasting Tools

There are some different tools to help you be successful in restaurant forecasting. It can seem to be a daunting task at first, but using some of the resources listed below can help you make sense of your data and build out actionable steps to improve your business.

• The most helpful tool is one you likely already have; your restaurant point of sale (POS) . The reports contained in your POS can show you a wealth of historical sales, labor, and customer traffic information to help you build future projections.
• Lineup.ai has a great Google Sheet spreadsheet  you can download in order to have a basis on how to execute your restaurant forecasting.
• Zoho CRM has a cheap forecasting tool  you can use for your business.
• Crunchtime offers its own financial assistance solutions for restaurants, and its sales forecasting tool  is one of them.
• 7shifts offers an automated scheduling tool  that includes forecasting data in order to help staff your restaurant to where it needs to be without breaking the bank.
• Lastly, 5-Out is a service that also offers forecasting, and some operators will tie this service in with Toast POS to tie their financial picture for their business together.

Frequently Asked Questions (FAQs)

Here are some of the most common questions about restaurant forecasting.

What happens if your forecast is incorrect?

It is important to know that a sales forecast for your restaurant is not a written-in-stone prediction of the sales you will accumulate. There are literally hundreds of factors that can determine whether or not you achieve your sales forecast, either by earning less or more revenue in that given time period. What you will do once you see how you performed against your sales forecast is either make changes or double down on what worked for you, depending on the results of your business. An incorrect forecast is not a bad thing, as it gives you the option to pivot and continue to evolve your business into a healthier and more successful state.

How often should you do a restaurant forecast?

Anytime you make a menu change, pricing change, renovation, or other major change to your restaurant, you should do a forecast. A lot of restaurant groups will do them month-to-month to anticipate the next month of business. This is a great practice if you really want to track your finances and try and hit the financial goals you may have set for your business. But any major change should be reason enough for a forecast, and a monthly cadence is one we recommend in order to truly manage your staffing and inventory levels for each month.

Who in a restaurant should run a forecast?

An owner or senior manager, along with any employee tasked with managing financial duties, should run a restaurant forecast. This information and data is very high-level and can give a very large picture of how the business can be expected to perform and how it has performed in the past. A senior manager can use the data we described above to make decisions that help affect food inventory and ordering, staffing, menu creation, and other decisions that will shape the business.

Bottom Line

Restaurant sales forecasting is a truly important job that will help you not only anticipate the future, but also let you look at the past through historical data to see where your business can improve. It also helps with tasks such as inventory ordering, staff scheduling, and overall decision-making in your business day-to-day. Be sure to use the article above to become a master at sales forecasting so that you can improve your business and offer your customers the best experience possible.

About the Author

Ray Delucci

Ray Delucci is a graduate of The Culinary Institute of America with a Bachelor’s in Food Business Management. He has experience managing restaurants in New York City, Houston, and Chicago. He is also the host of the Line Cook Thoughts Podcast, where he interviews and shares the stories of foodservice workers. Ray currently works in food manufacturing and food product development.

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How to Forecast Restaurant Sales

Accurate sales forecasting is a key to success in the restaurant industry. It enables restaurateurs to anticipate demand, plan strategically, manage finances efficiently, control inventory, and schedule staff optimally.

Every restaurant owner knows that running a successful business is like a high-stakes culinary dance - a delicate balancing act of ingredients, timing, and presentation. However, one key ingredient often overlooked is the power of accurate sales forecasting . Just as a chef uses a recipe to create a culinary masterpiece, restaurateurs can use sales forecasting to drive business success, optimize resources, and boost profits. When drafting your business plan, incorporate an accurate forecast of restaurant sales, which should reflect a meticulous analysis of past sales data, current market trends, competition, seasonality, and promotional activities.

What Is Sales Forecasting

Before we dive into how sales forecasting can shape the future of your restaurant, restaurant owners first need to understand what restaurant sales forecast means, its importance, the elements involved, and the different types it comes in.

Definition and Importance of Sales Forecasting

Sales forecast is the process of estimating future sales. Accurate restaurant sales forecasts enable businesses to make informed business decisions and predict short-term and long-term performance. For restaurants, sales forecasting is not just about predicting sales. It's a strategic necessity that influences everything from food ordering, and staff scheduling, to growth planning, and budgeting.

An accurate sales forecast can provide a restaurant with a clear perspective of its revenue potential, help identify peak and off-peak periods, reduce food waste by more precise ingredient purchasing, and ultimately, enhance profitability.

Elements Involved in Sales Forecasting

Several elements come into play when forecasting restaurant sales.

1. Historical Data : This refers to your restaurant's past performance, which includes daily, monthly, and yearly sales. It provides a baseline for future forecasts.

2. Seasonality : Certain times of the year, such as holidays, can have a significant impact on restaurant sales. It's crucial to take these seasonal patterns into account.

3. Market Trends : Changes in customer preferences, new dining trends, or even shifts in the overall economy can impact your sales. Staying abreast of market trends can help you make more accurate sales forecasts.

4. Promotions and Marketing Efforts : Any planned advertising or promotions can lead to an increase in sales and should be factored into your sales forecast.

Types of Sales Forecasting

There are two primary types of sales forecasting: quantitative and qualitative.

1. Quantitative Forecasting : This method uses numerical data and statistical techniques to predict future sales. It's typically used when historical data is available and assumes that future patterns will resemble past patterns. Examples of quantitative forecasting include time series analysis and regression analysis.

2. Qualitative Forecasting : This type of forecasting is subjective, based on expert opinion and intuition rather than hard data. It's commonly used when there's a lack of historical data or when external factors, like market trends or competitive environment, are expected to significantly impact future sales. Examples of qualitative forecasting include the Delphi method and sales force composite.

Remember, there's no one-size-fits-all approach to sales forecasting. Depending on your restaurant's specific circumstances and the availability of data, you might find one method more suitable than the other, or you might use a combination of both.

Gathering Data for Restaurant Sales Forecasting

Data is the backbone of accurate sales forecasting. In order to make reliable predictions about future sales, you need to collect, organize, and analyze the right data in an efficient manner.

Importance of Data Collection

Collecting data allows you to establish trends, identify patterns, and gain a comprehensive understanding of your restaurant's operations. With robust data, your sales forecasts will be more precise and your decision-making will be more informed. Without it, you're essentially making educated guesses about your future sales, which can lead to costly mistakes.

Types of Data to Collect

Different types of data are relevant to sales forecasting. Here are the main ones:

1. Historical Sales Data : This is the most critical type of data for sales forecasting. It includes information about your daily, weekly, monthly, and annual sales, as well as data about the most and least popular items on your menu.

2. Customer Data : This includes data about your customer demographics, preferences, peak dining times, and average spending.

3. External Data : This includes information about local and global events, changes in the competitive landscape, and broader economic trends.

4. Marketing Data : This includes information about the success of past marketing campaigns and promotions, which can help you predict the impact of future marketing activities.

Tools and Methods for Data Collection

Thankfully, collecting this data is easier than ever, thanks to modern technology. Here are some tools and methods you can use:

1. Point of Sale (POS) Systems : Modern POS systems don't just process payments; they also track sales data, customer data, and inventory levels in real-time.

2. Customer Relationship Management (CRM) Systems : CRM systems can provide valuable data about your customers, including their dining habits and preferences.

3. Web and Social Media Analytics : These tools can provide insights into the effectiveness of your online marketing activities.

4. Economic and Industry Reports : These can provide useful data about broader market trends and economic conditions.

Principles of Data Organization and Analysis

Collecting data is just the first step. You also need to organize and analyze it effectively. Here are some principles to guide you:

1. Clean and Validate Your Data : Ensure your data is accurate and free from errors. Inaccurate data can lead to misleading forecasts.

2. Organize Your Data : Structure your data in a way that makes it easy to analyze. This might involve categorizing it, entering it into spreadsheets, or importing it into a data analysis tool.

3. Analyze Your Data : Look for trends and patterns in your data. This might involve calculating averages, identifying peaks and troughs, or using more advanced statistical analysis techniques.

4. Review and Update Your Data Regularly : Data is constantly changing, so regular reviews and updates are essential to maintain the accuracy of your forecasts.

By effectively collecting, organizing, and analyzing data, you can create sales forecasts that are not only accurate but also incredibly valuable for your decision-making processes.

Utilizing Technology in Sales Forecasting

In today's digital age, technology plays an increasingly crucial role in sales forecasts. Advanced software and tools can dramatically simplify the process, provide more accurate predictions, and deliver actionable insights that manual methods cannot.

Overview of Technological Solutions

There are numerous technological solutions available for sales forecasting. These range from comprehensive restaurant management systems that include sales forecasting as part of their offerings, to specialized software focusing solely on forecasting.

These tools generally leverage historical data, use sophisticated algorithms to detect patterns and trends, and consider a variety of external factors to deliver detailed projected sales. Some of these software solutions even incorporate machine learning to continually refine their forecasting models for improved accuracy over time.

Key Features to Look for in Forecasting Software

When considering which sales forecasting software to use, there are several key features to look out for:

1. Data Integration : The software should easily integrate with your existing systems (like POS or CRM) to seamlessly pull relevant data.

2. Real-Time Updates : It should provide real-time updates to reflect changes in data as they happen.

3. Easy-to-Understand Outputs : The software should present forecasts in an easy-to-understand format, with clear charts, graphs, and tables.

4. Customizable Parameters : The ability to adjust the parameters of your forecast can help you fine-tune your predictions to better match your specific circumstances.

5. Scalability : As your restaurant grows, your forecasting tool should be able to grow with you.

Recommendation: 5-Out Sales Forecasting Software

When it comes to sales forecasting software that's tailor-made for restaurants, 5-Out is an absolute game-changer. This state-of-the-art tool harnesses the power of artificial intelligence (AI) and machine learning (ML) to scrutinize both internal and external data, resulting in remarkably accurate forecasts of your restaurant's future demand. In fact, it's proven to deliver up to 98% accuracy.

As straightforward as it is powerful, 5-Out is a breeze to set up - you can be up and running within just five minutes. It smoothly integrates with your existing restaurant management system, be it POS, inventory management software, or labor scheduling software. What sets 5-Out apart, however, is how it utilizes these sales projections to offer actionable insights. By guiding labor scheduling and inventory purchasing decisions, it helps you trim unnecessary food and labor costs and optimize profit.

Here's what you can expect from 5-Out:

1. AI and ML-Driven Forecasts : Utilizes advanced AI and ML methods to analyze a wide array of data and predict future demand with impressive accuracy.

2. Easy Setup : Get your forecasting system up and running in a mere 5 minutes, allowing you to start reaping its benefits almost immediately.

3. Seamless Integration : Effortlessly combines with your existing restaurant management systems such as POS, inventory management software, and labor scheduling software.

4. Data-Informed Insights : Provides valuable insights for labor scheduling and inventory purchasing based on sales forecasts, helping you reduce waste, cut costs, and increase profit.

5. High Accuracy : Offers a level of precision that is second to none, with forecasts proven to be up to 98% accurate.

By leveraging the capabilities of 5-Out, restaurateurs can take the guesswork out of forecasting, make more informed decisions, and drive their establishments toward increased profitability and success.

Request a demo today to see how 5-Out can help you predict future sales and increase profitability!

Step-by-Step Guide to Forecasting Restaurant Sales

Conducting a sales forecast might seem complex, but by breaking it down into steps, it becomes more manageable. Let's explore a step-by-step approach to forecasting restaurant sales.

Historical Sales Data Analysis

The first step in any restaurant forecasting is to analyze your past data. Start by gathering sales data from your Point of Sale (POS) system. Look at daily, weekly, monthly, and yearly sales figures, as well as the sales volumes of different menu items. This will give you a clear idea of how your sales vary over time and between different products.

Identify and Analyze Relevant Trends and Patterns

Next, identify trends and patterns in your sales data. This might include:

• Peak times of day, week, or year for sales
• The impact of holidays or events on sales
• The popularity of different menu items

Also, analyze external factors that could impact sales, such as economic trends, local events, and changes in the competitive landscape.

Creating and Adjusting Sales Projections

Now you can start creating your sales projections. Based on your historical data and identified trends, estimate your future sales. Remember to factor in any planned changes, such as new marketing initiatives or menu changes.

Initially, these projections will be rough estimates. However, you should adjust them as more data becomes available or as circumstances change. For example, if you launch a new marketing campaign that increases sales, you should adjust your forecast upwards to account for this.

Testing the Forecast Model

Before you rely on your forecast for decision-making, you should test its accuracy. Compare your forecasted sales with actual sales over a certain period, and measure the difference. If your forecast is consistently off by a large margin, you may need to refine your model or reconsider your assumptions.

Regular Updates and Reviews

Sales forecasting is not a one-time exercise; it requires regular updates and reviews. As new sales data comes in, you should update your forecast to reflect this. Similarly, if there are significant changes in your business or the external environment, you should review and adjust your forecast.

Remember, the goal of sales forecasting is not to predict the future with perfect accuracy but to provide a solid basis for decision-making. Regularly updating and reviewing your forecast will ensure it remains as accurate and useful as possible.

By following this step-by-step guide, you can create a robust sales forecast for your restaurant that supports strategic planning and contributes to your business's growth and success.

Sales forecasting is a crucial component of successful restaurant management. It provides valuable insights into future demand, facilitating strategic planning, financial management, inventory control, and staff scheduling. While the process may seem daunting, understanding the basics, recognizing the importance of data collection, and leveraging advanced technology can make it much more manageable and accurate.

Tools like 5-Out , which integrates AI and ML into their forecasting model, are incredibly useful in this process. They offer precise forecasts, seamless integration with existing systems, and user-friendly interfaces. Utilizing such tools not only simplifies sales forecasting but also enhances decision-making processes, ultimately driving profitability and growth.

Now, you're equipped with the knowledge to forecast your restaurant's sales accurately. But why not take it a step further? Experience the power of precision forecasting with 5-Out, and let its advanced, user-friendly features guide your restaurant toward greater success.

Book a demo today !

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May 3, 2024

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A Guide to Conducting Precise Restaurant Sales Forecasts

5 Min Read 3.24.2022 By Grace Lau

Sales forecasting is always tricky in the restaurant world. Partly, this is because the industry is inherently unpredictable. Under normal circumstances, you could use previous years’ sales figures to forecast the upcoming year – but, as we emerge from two years of COVID closures, staffing shortages, and general turmoil, previous sales’ figures definitely can’t be trusted. 

For many restaurants, forecasting upcoming sales  in a post-pandemic world  is just as hard as forecasting sales for an entirely new venture.

So, perhaps it’s worth going over exactly how you’d forecast sales for a new venture.

Let’s follow the case of a fictional restaurateur. Her name is Chloe, and her dream is to open a bistro by the sea. She’s picked what could be the perfect spot – a recently vacated cafe on the seafront. She hopes to renovate it and turn it into the fish bistro of her dreams, catering to happy beachgoers all year round. 

However, before she can do this, she has some  startup costs . She needs to upgrade the property, get the relevant certificates, and so on.

And before she can do any of that, she needs a business loan.

Chloe’s plan is charming, and she’s very enthusiastic – but lenders do not deliver on charm and enthusiasm alone. They will want to see returns on their investment. So, Chloe has to present them with a sales forecast.

Forecasting restaurant sales isn’t always easy. There are a whole host of factors that can come into play like economic conditions, the weather, eating trends, or even our old friend the pandemic. 

All in all, you can’t rely on things like an average ecommerce conversion rate when forecasting sales for a restaurant.

However, our Chloe is no amateur. She has a background in restaurant management, so she already has a decent understanding of the industry and market she’ll be working in. She’s confident that she can come up with a reasonably precise sales forecast.

How does she do that? Let’s take a look:

1 – Capacity Calculations

First, Chloe sits down and works out her baseline capacity. That is, the average amount she should be able to take each day. 

Chloe’s bistro will be opening for drinks and small lunches in the daytime and providing a limited number of hot meals (booking only – it’s a small place!) in the evening. 

She has faith in her food and her staff, and she’s good at things like  outbound lead generation , so she’s confident that she can build up a loyal following. But she needs more than confidence to take to the lenders. So, she starts doing some calculations.

Assuming that 80 percent of seats are filled for both sittings and that each customer orders something of average price, Chloe can establish a rough baseline calculation for a day’s trading. She can then multiply her day’s trading average by the number of typical workdays in a month to reach an average monthly capacity estimate.

She can also add in the cost of additional extras, like puddings, side dishes, and so on, into her baseline capacity calculation – whether she does so or not depends on how hard she intends to push them

Now, these estimates are all very good – but what’s to say that Chloe didn’t pluck the figure of 80 percent of seats filled from thin air? What’s she basing her estimates on?

Well, it’s largely educated guesswork.

Luckily, the banks understand that educated guesswork is the best tool at Chloe’s disposal when it comes to a baseline capacity calculation. And, as Chloe knows the industry well, her educated guesses are more educated than most.

However, there are things Chloe can do to make her forecast a bit more precise and, therefore, a bit more appealing to lenders.

2 – Expectation Adjustment

If you’re experienced in the restaurant industry, you’ll have immediately spotted a problem with Chloe’s baseline capacity calculations: not all days are alike. Not even close.

For example, during the summer, Chloe’s seaside bistro is likely to be a lot busier than during the winter. Similarly, she will likely do more trade on weekends than on workdays. And certain holidays ( Valentines Day, for example ) may be busier than average, while others (Christmas, for example) will leave the bistro empty.

This is where adjustments come in.

To get an idea of when she can expect the most custom, Chloe buries herself in market research. She digs out year-on-year trends for restaurants in the area and studies average monthly takings for her closest competitors.

Chloe’s offering is not identical to those of the other eateries along the seafront, but that doesn’t matter. What she’s looking for here isn’t precise numbers – it’s things like footfall estimates, the amount of passing trade, the busiest and slowest times, and so on. She can use things like the local chamber of commerce statistics, area research, competitor research, and even good old-fashioned observation to draw accurate conclusions.

Using all of this, she can start to get a bit more precise with her baseline calculations. For example, if she discovers that the beach is busy on a Saturday afternoon but virtually empty on a Monday, she can adjust her day-by-day calculations accordingly to come up with a more tailored average weekly calculation.

Then, she has to bring this to bear on her monthly baseline calculation. Which means it’s time to get even more precise.

3 – Predicting the First Year

Just as each day in the week is different, each month is also different. Chloe will have to adjust her monthly calculation to account for the complexities of each individual month. This is particularly important for the first year.

For example, even if Chloe opens on the busiest potential day in summer, it’s likely that her bistro will take a while to get established. So, for the first few months, she will need to lower her baseline calculation to account for this.

Then she will have to take the particulars of each month into account. For example, February might see a spike in trade over Valentine’s Day, while September is notoriously slow for restaurants all over the world.

At this point, it’s wise to start getting techy. Luckily, Chloe is a bit of a geek. She loves a spreadsheet and regularly browses the B2B ecommerce sites for good restaurant software. 

Opening up her tech deck, she inputs her estimates into a sales forecasting template. She adds things like average prices, specific prices (for example, she plans to do a set Valentines menu, so adds this into her February row),  overheads, soft and hard costs , footfall estimates, and so on. 

She gets pretty granular as she works, accounting for things like increased heating overheads in winter months and increased staff costs during busy months. 

However, she doesn’t get so granular that she’s accounting for every tiny thing. For example, rather than listing “fish pie,” “chicken sandwich”, etc., for her daily lunchtime menu, she just puts “lunch” and an average price. Her sales forecast doesn’t have to account for every little detail – it’s a big picture kind of deal.                                                     

Once she’s got her annual sales forecast/estimate, all Chloe has to do is convince her lenders to pay up. We’ve got confidence in her – she’s smart, and she’s got a great business plan. They’re bound to love her.

Her forecast isn’t just useful for wowing lenders, though. It’s got a lot of applications beyond that. For example, if she’s not sure how much inventory to order in June, a glance at her sales forecast could prevent her from over-ordering or under-ordering. The same goes for things like seasonal staffing.

If she’s feeling clever, Chloe could even factor things like seasonal produce into her forecast. After all, she’s pretty focused on fish, and the catch of the day is likely to change a lot with the seasons. Sometimes, she’ll be paying more, sometimes less – so her sales forecast could help her a lot in working out whether or not the cost of certain catches will be repaid in sales.

Grace Lau is the Director of Growth Content at Dialpad , an AI-powered cloud communication platform for better and easier team collaboration. She has more than 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content.

• Financial Planning

Forecasting Restaurant Sales Before You Open

Before you forecast your restaurant sales, let’s break down a few myths about preparing a financial forecast spreadsheet:

• You need to be a mathematics wizard to forecast your sales
• Your financial forecast will give you exact numbers
• You only have to prepare your sales forecast spreadsheet once after you know your concept, and you never go back to revise the numbers

Now, for the truth:

• You just need some simple math and some informed assumptions about your business to forecast your sales
• Complete accuracy is unrealistic because you can’t predict the future, like the weather or the competition you’ll face (or not face)
• You’ll always be re-working your forecast, especially in the beginning as your restaurant is taking shape

Think of forecasting your sales as a puzzle: as pieces of your restaurant are added, its financial picture – and future – will become clearer.

The best way to prepare a proper financial forecast is to:

• Get help from restaurant experts
• Make informed assumptions about your business – while remaining realistic
• Know the basic math you required to properly forecast your sales
• Review your forecast at the right times

Getting Help with Forecasting Your Sales

Remember to ask for help before drafting any financial document related to your business. Your restaurant experts team is there to make sure you’re forecasting your sales correctly the first time rather than after you’ve wasted precious time trying to hack together a financial forecast spreadsheet yourself. Unless you were an accountant in a past life, no one expects you to know how to do it right!

Here are two experts to lean on when forecasting your revenue before you open your restaurant.

Restaurant Consultant

Before you forecast your sales, you want to make sure you’re asking the right questions and making realistic assumptions about your business. A restaurant consultant is a necessary sounding board to fill in any blanks in information before you get started on the numbers.

A restaurant consultant will dissect your business plan and discuss your concept to glean all the information necessary to forecast your sales as accurately as possible. A great consultant will put together a list of factors that can affect your future sales, which you’ll then consider and cross-reference when working with an accountant on your financial forecast spreadsheet.

After you’ve determined the variables that are most likely to influence your sales, your accountant will help translate those factors into numbers for your financial forecast spreadsheet. Your accountant also has access to knowledge and market research that shows how similar restaurants have performed in the past, which will help ground your financial forecast in reality during those theoretical stages of your business.

Business Assumptions That Inform Your Restaurant Sales Projections

So – your business doesn’t exist yet. You’re not making any sales, so how can you predict your future restaurant sales projections?

The answer: informed assumptions. You may not yet know how diners will react to what you’re offering, but you probably do know how much space you want for seating, a general price range for menu items, and which days you’re more likely to be at full capacity.

Market research can also tell you the average time it takes for customers to know about a new restaurant so you don’t overestimate or underestimate how long it will take for people to really start walking through the door.

Before forecasting restaurants sales, here’s what you should know about your venue:

• Square footage: how much space do you have for diners vs. the kitchen?
• Seats: how many people will be able to eat at your restaurant at any given time?
• Prices: how much are you charging per menu item?
• Hours of operation: are you open for breakfast, lunch, dinner, and late night?
• Market trends: when a similar restaurant opened in a similar location, how long did it take for that restaurant to operate at 100% capacity?

How to Be Realistic

The best way to be realistic about your business assumptions is to talk to other people who have opened restaurants! After you’ve mapped out what you think is realistic for a restaurant of your size, concept , and location, bounce your assumptions off someone else who has lived through what you’re about to.

Learn from other people’s mistakes as early as possible, so you start your restaurant on the right foot. Other restaurant owners will be able to point out whether you’re charging too much or too little for your menu items or whether to bother opening for breakfast right away.

Remember, you don’t want to have to scale back on your hours or your prices once you open. downgrading your concept sends a signal to the market that your business is in trouble, so you want to get things right as soon as you open. it’s always better to scale up once you’ve started small.

The Formula for Forecasting Restaurant Sales

Once you’ve fine tuned your business assumptions, you’re ready to do some math to forecast your sales.

Say your restaurant has 32 seats, and your average lunch would cost £12 for food and £3 for a drink. So you know that at full capacity, your restaurant would expect food sales of:

• 32 units x £12 per unit (lunch food) = £384
• 32 units x £3 per unit (lunch drink) = £96
• = £480 at full lunch capacity

How long does it take to have lunch at your restaurant? If it takes about an hour and you see your restaurant only being able to accommodate one lunch service, then £480 would be your final estimate for the day at full capacity.

What about dinner? If you’re charging £20 for food, £5 for a drink, and you’re likely to serve two seatings, you would end up with:

• 32 units x £20 per unit (dinner food) = £640
• 32 units x £5 per unit (dinner beverage) = £160
• = £800 at full dinner capacity
• x 2 seatings = £1,600 at full dinner capacity

But … your restaurant won’t be operating at full capacity every day. So based on what you now know about your sales at full capacity, you can calculate a baseline average for the week and then the year.

Let’s say you anticipate selling at half your capacity on slow days (Mondays and Tuesdays) vs. full capacity on busy days (Fridays and Saturdays). You’re not open on Sundays, so your sales for that day would appear at zero. Your anticipated sales for lunch per week might look something like this:

• Monday: £240
• Tuesday: £240
• Wednesday: £360
• Thursday: £360
• Friday: £480
• Saturday: £480
• Weekly average = £308.57/day for lunch

You’ll want to scale this process by multiplying an average week times 52, then divide by 12 to get an average month. This would be your baseline month, when your restaurant has been operating for a while and has “found its groove”.

But since your restaurant is just starting up, you need to assume you won’t reach full capacity for quite some time. Most restaurateurs slice their average estimates in half to come up with their final sales forecast numbers for when they are just starting out.

When to Rework Your Sales Forecast

The rule of thumb is to revise forecasting restaurant sales once a month after you’re open. But when you’re starting a restaurant , you should be reviewing your forecast when anything big changes.

Let’s say your restaurant consultant does market research that indicates your prices are too low compared to your competitors and you could be selling yourself short on sales: you’ll want to change the numbers to reflect a higher unit cost. Or maybe a property deal falls through and you’re suddenly facing a reduction in square footage and therefore seats.

The point is, when any of your major forecast variables change, your numbers need to change along with them. Here are some key factors that would warrant a review of your sales forecast.

Your seating changes.

A large contributing factor to that baseline sales average is the number of seats in your restaurant. If you’ve projected sales with a certain space in mind and that space changes – whether because of a real estate deal gone wrong or a great opportunity that has presented itself – one of the first things you need to do is recalculate your projections based on your new seating capacity.

Your prices change.

If you’ve projected your sales and then find out a competitor has opened down the street and is offering similar menu items at a fraction of the cost, you may want to revise your unit cost. Competitive analysis may also reveal that you need to add a differentiating feature menu item, and you might decide to keep your prices the same as before but offer your speciality item at a specific price point – which may affect average meal cost if you think that item will be popular.

Your hours change.

You may have planned to open for brunch and then discovered the added labour throws off your ideal labour cost ratio, or that ingredients are too expensive to justify the added operational costs. If you projected sales based on being open for brunch, you’ll need to recalculate based on the decision not to open.

Remember, it’s better to start small and add once you’ve mastered your core speciality. If you decide to open for brunch only to discover it wasn’t worth opening and you need to shut down, the market will see that you’ve scaled back and wonder why. It’s a lot better to create demand little by little with what you do best and then wow customers by opening for brunch once they’ve expressed the desire for it.

You have real results.

After you’ve been open for a month, you’ll have one of the most important pieces of forecasting restaurant sales: reality. How well do your actual results match your theoretical projections? You won’t yet be in a position to gauge seasonal results, but you’ll have a much more informed vantage point to revise your projections for the next few months.

You have more real results.

It can’t be stressed enough how important it is to keep reviewing your financial forecast spreadsheet as you gain more insight into the realities of owning your restaurant. As you’re open longer, you’ll start to recognise patterns such as how the weather affects sales, what your competitors are offering that you aren’t, which promotions work better than others, etc.

Every new piece of information is an opportunity to refine your projections until voila! – they start to match reality.

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The Ultimate Guide to Restaurant Forecasting

Facing the ever-evolving challenges of the restaurant business, the ability to predict and prepare for future events is not just an advantage – it's a necessity. This is where the art of restaurant forecasting comes into play, a critical tool that enables restaurateurs to navigate the complexities of their business with greater confidence and strategic insight.

Forecasting in the restaurant industry goes beyond mere guesswork; it involves a systematic analysis of past and present data to make informed predictions about future trends and events . Whether it's estimating the number of guests on a Friday night, determining the quantity of ingredients needed for the week, or projecting the annual revenue, effective forecasting touches every corner of restaurant operations.

The impact of accurate forecasting is profound . It ensures that the right amount of staff is scheduled, helps in maintaining the perfect balance of inventory, and aids in making informed financial decisions. In essence, it's about being prepared - whether for a sudden surge in customers, a shift in dining trends, or even an unexpected global event.

With forecasting, restaurant owners and managers can optimize their operations, reduce waste, enhance customer satisfaction , and ultimately, drive their business towards greater profitability and success.

In this comprehensive guide, we delve into the various facets of restaurant forecasting, exploring its different types, its significance, and how to implement effective forecasting strategies. Understanding and applying these principles can be a game-changer for your business.

What Is Forecasting for Restaurants?

Restaurant forecasting is a method that involves analyzing historical data, market trends, and current business metrics to make informed predictions about various aspects of restaurant operations. This process encompasses everything from estimating future restaurant sales and customer footfall to determining inventory needs and staffing requirements.

The essence of restaurant forecasting lies in its ability to transform raw data into actionable insights .

By examining past patterns in sales, customer behavior, and seasonal trends, restaurant managers can forecast future demand with a higher degree of accuracy. This predictive power is not just about reacting to upcoming trends; it's about proactively shaping business strategies to align with these anticipated changes.

Without forecasting, restaurants operate blindly, making it difficult to make necessary changes and adjustments.

However, even managers who look at their past sales volumes can miss important factors like the weather , local events, or gradual trends that are harder to spot. That is why is extremely important to get it right.

The Different Types of Restaurant Forecasting

It's important to recognize the diverse range of forecasting types that play a pivotal role in restaurant management . Each type offers unique insights and strategies for optimization. Let's explore these various forecasting methods and understand how they contribute to the overall success of a restaurant .

Sales Forecasting

Restaurant sales forecasting is the process of estimating future sales. By analyzing historical sales data, seasonality, local events, weather factors and more, restaurants can predict future sales volume, helping them predict revenue, manage inventory and staffing, guide financial planning and expansion , and thus enhance operational efficiency and profitability.

Utilize tools like Lineup.ai's AI-powered sales forecasting for accurate predictions. Its algorithm continuously learns and identifies patterns, improving the precision of future forecasts.

Customer Demand Forecasting

This type of forecasting predicts the number of customers expected to visit the restaurant. It's essential for managing customer flow and enhancing service quality. By anticipating busy times , restaurants can adjust staffing levels, optimize table turnover , and ensure they meet customer expectations without compromising on service.

Lineup.ai can automate demand forecasting, helping you schedule staff efficiently based on predicted customer volumes.

Inventory Forecasting

Inventory forecasting involves predicting the amount of food and supplies needed. Accurate forecasting helps in ordering the right quantity of ingredients, reducing food waste , and controlling costs. It ensures that the restaurant has enough stock to meet customer demand without over-purchasing, which can lead to spoilage and increased expenses.

Implement Lineup.ai to analyze past sales data and predict inventory needs , ensuring you have the right amount of stock. Contact us to find out more about this feature.

Labor Forecasting

Labor forecasting is about predicting the number of staff required to operate the restaurant efficiently. It helps in scheduling the right number of employees for each shift, ensuring that the restaurant is well-staffed during peak times and not overstaffed during slower periods. This balance is key to maintaining operational efficiency and controlling labor costs .

Use Lineup.ai's labor forecasting software for insights on staffing needs per location and shift, reducing under- or overstaffing.

Menu Item Forecasting

This forecasting predicts the popularity of different menu items . Understanding which dishes are likely to be in high demand helps in menu planning and inventory control. It also aids in identifying less popular items that might be removed or improved, optimizing the menu for customer satisfaction and profitability.

Tools like Lineup.ai offer simple AI-powered menu forecasting features for restaurants , enabling precise demand prediction and inventory management to meet customer expectations, minimize waste, and control food costs effectively.

Financial Forecasting

Financial forecasting involves predicting the restaurant's overall financial performance, including revenue, expenses, and profit margins . This type of forecasting is vital for budgeting, financial planning, and making strategic decisions about investments and growth.

Trend Forecasting

Trend forecasting focuses on identifying broader market and consumer trends. It helps restaurants stay ahead of the curve by adapting to changing customer preferences, dietary trends, and industry innovations. This foresight is crucial for menu development, marketing strategies, and overall business positioning.

What Are the Two Components of Forecasting Restaurant Sales?

There are two components to forecasting restaurant sales:

• Looking at quantitative data. This means the use of information like past sales, customer counts, check averages.
• Looking at qualitative data. This includes information like customer surveys, weather reports, and event bookings.

Why Should You Conduct a Restaurant Forecast?

Restaurant forecasting is one of the most important responsibilities of a restaurateur.

Effectively analyzing restaurant data is a crucial element in making informed and intelligent decisions for your business. By delving into the analytics derived from your past sales reports, you gain valuable insights that can guide you in various aspects, such as staffing, inventory management, expansion strategies, and beyond. Let's explore some key areas where forecasting is important in the restaurant industry .

Enhanced Inventory Management

Forecasting can help you avoid over-ordering or under-ordering food and supplies. It gives restaurant owners and managers a clear picture of future sales, so they can order the correct amount of inventory.

Restaurant margins are often very tight, so you don’t have money to waste on spoilage or 86s. This is especially valuable if you’re planning to order costly ingredients for special menu items.

When your supplier has a great sale, check your forecast to see if it makes sense before you splurge on that extra inventory. After all, you don’t save any money if all the food you bought on sale ends up as spoilage.

Check out our free restaurant inventory sheet .

Easy Profit Estimation

You need to know how much you’ve already made, but it’s even more important to plan around the profit you’re likely to make in the future.

Fortunately, forecasting can help restaurants estimate their future profits. This information is crucial for planning investments, expansion, and other financial decisions that go above and beyond your daily operation costs.

This helps you avoid disasters like not having the cash in the bank to cover payroll. You can make more responsible decisions and manage your risks when you have a more accurate prediction of your profitability.

Informed planning

The heart of forecasting is the ability to plan for the future. Your forecast data can be used to make decisions about menu changes , staffing, marketing, or even your hours. For example, if you know that the next 6 weeks are going to be slow, you can optimize by closing between lunch and dinner or streamlining your lunch menu to reduce food waste.

In addition, forecasting can help restaurants plan for future seasons and events.

Imagine that you forecast that your sales will increase during the holiday season . This is the perfect time to hire additional staff and train them before the peak season starts and your trainees will affect service levels. Anticipating an increase in the number of employees and being able to plan for it can help you have a realistic outlook on sales and profits.

You know how to adjust your restaurant operations to volume needs. The key is to get your forecasts as accurate as possible before you start making those strategic decisions.

How Do You Create a Restaurant Forecast

Creating a restaurant forecast involves considering multiple factors, such as historical data, market trends, and business assumptions. While there isn't a one-size-fits-all formula for restaurant forecasting, here's a general outline of the steps involved:

Sales Forecast

Calculate the average sales for specific time periods (daily, weekly, monthly) based on historical data. Analyze any seasonal trends or fluctuations and adjust the forecast accordingly. Consider factors like special events, holidays, or promotions that might impact sales.

You can use our free sales forecast template for restaurants .

Cost Forecast

Estimate the cost of goods sold (COGS) for each menu item based on ingredient costs and portion sizes. Project other operating costs like labor , rent, utilities, marketing, and other overhead expenses. Consider any expected changes in costs due to inflation or other factors.

Check out our cost forecast calculator for restaurants .

Profit Forecast

Subtract the total forecasted costs from the forecasted sales to calculate the expected profit. Evaluate different scenarios to understand potential profit fluctuations.

Cash Flow Forecast

Analyze the timing of cash inflows (revenues) and cash outflows (expenses). Determine when revenue is expected to be received (e.g., immediate payment, credit sales) and when expenses must be paid. Ensure that the restaurant maintains a healthy cash flow to cover expenses and invest in growth. Learn about cash flow projection and use our free template .

Menu Engineering

Use menu engineering principles to identify high-profit items and forecast their potential impact on overall sales and profitability.

Market Research (Optional)

Gather data on market trends, customer preferences, and competitors' performance to inform your forecast.

Scenario Analysis (Optional)

Consider different scenarios and variables (e.g., best-case, worst-case, optimistic, conservative) to prepare for various outcomes.

Regular Review and Adjustment

Regularly review actual performance against forecasted figures. Adjust your forecasts and assumptions as new data becomes available or circumstances change.

Remember, the accuracy of your forecast will depend on the quality of data and assumptions used . Historical data and market insights will help improve the reliability of your forecasts, but it's crucial to be flexible and adaptive as the restaurant industry can be affected by unforeseen events and fluctuations.

When Is the Best Time To Implement Restaurant Forecasting?

Forecasting happens all the time. Every time you build your staffing schedule , plan your menu, or order supplies, you’re making a prediction about the future. Do you look at your metrics each time you do these things?

The easiest way to implement forecasting is to install specialized software to make it easier. Looking back at your POS data and actual sales takes too much time to be a practical way to operate. External variables like weather, neighborhood foot traffic, and local road closures might not even make it to the table for consideration, much less their fluctuations in real-time. You need a way to take those historical data into account without manually pulling reports. That’s where automation comes in.

The best time to install that software is as soon as you’re ready to cut out waste in your restaurant.

Tools To Automate Restaurant Forecast

There are two ways you can choose to automate your restaurant forecast.

1. Use Excel/Google Sheets

If you're looking for a more hands-on approach, you can create your own forecasting system.

This option may be more time-consuming, but it will allow you to customize the system to fit the specific needs of your restaurant.

There are a few things you'll need to consider when creating your system.

First, you'll need to decide what data you want to include in your forecast.

This may include sales data, customer data, and inventory data.

Next, you'll need to choose a forecasting method. There are a number of different methods you can use, including trend analysis, regression analysis, and time-series analysis.

Keep in mind that you’ll need to do this manually every time you place a supply order or create a schedule. If you’re good with formulas and like doing data analysis, this is fine.

Also, be aware that your forecasts will be about 35% less accurate than an AI-powered software because you are more likely to miss some of the external factors that affect your sales volumes.

Check out our restaurant sales forecasting template that is free to download.

2. Use a Software

Restaurant forecasting software is the fastest and most accurate way to handle restaurant data. Most good software options will also help you with staff management, saving more administrative time.

The downside to the software is that it usually has a monthly cost. However, this cost is generally low, and the money you save on spoilage and other waste can turn that investment into a higher profit margin for your restaurant.

There are a number of software programs that can be used to automate forecasting.

One popular option includes Lineup.ai.

Lineup.ai can be used to input data, create accurate sales, labor and demand forecasts, and generate reports.

It can also be customized to fit the specific needs of your restaurant regardless of location and order channel. Lineup.ai will combine your restaurant's historical data while at the same time considering real-time external factors such as weather and events to generate dynamic hourly, daily, and weekly sales forecasts. Learn more about Lineup's features .

Bottom Line

Forecasting is an important tool for all restaurants, both new and established. It can help you set goals, make plans, and track progress. Perhaps most importantly, it enables you to make more money.

By following the steps in this guide, you can develop a realistic forecast for your business. And by automating your forecasting process with tools like lineup.ai, you can save time and make more accurate predictions.

A restaurant is struggling to accurately staff for the different daily customer volumes. What to do?

To accurately staff for varying daily customer volumes, consider using restaurant forecasting software like Lineup.ai. This software uses advanced algorithms and historical data to predict restaurant labor and sales needs, helping you optimize schedules and reduce labor costs. Additionally, stay open to employee feedback, cross-train staff, and regularly monitor and adjust your staffing strategies to enhance efficiency.

A restaurant has noticed many popular dishes are running out early in the day. What to do?

Ensure you use historical data as a part of restaurant forecasting to predict popular dish demand accurately. Adjust your inventory and prep schedules accordingly to prevent running out early in the day.

A restaurant has noticed that customers often wait longer in line than in previous years, what to do?

Incorporate restaurant analytics software to optimize staffing levels, streamline kitchen operations, and reduce customer wait times in your restaurant.

What measures to take to get the appropriate cooks in to work as soon as possible?

To promptly address staffing needs in the kitchen, use real-time forecasting software like Lineup.ai, implement staffing alerts, cross-train staff, maintain flexible scheduling, ensure efficient communication , utilize kitchen technology, and monitor performance based on data and demand. These steps, combined with restaurant forecasting, enhance kitchen efficiency.

What are the slowest days at restaurants?

The slowest days at restaurants are typically Mondays and Tuesdays. The "post-weekend blues" and people generally settling into their workweek routines are common reasons cited for the reduced restaurant traffic during these days. It's a trend observed in many places, although there can be exceptions depending on the type of restaurant, local demographics, and marketing strategies.

What forecasting method does KFC use?

KFC uses a combination of methods, including historical data analysis, POS systems, market research, seasonal adjustments, and technology to forecast demand and manage operations effectively. The exact methods may vary by location and evolve with technology.

What forecasting techniques does McDonald's use?

McDonald's restaurants employ a blend of qualitative and quantitative forecasting techniques. Typically, they utilize customer data and sales statistics to predict the quantities needed to meet customer demand for their products and services.

How does Starbucks use forecasting?

Starbucks , like many other retailers, is increasingly leveraging predictive analytics and artificial intelligence (AI) to enhance its operations and provide a more personalized customer experience.

Further read:

• 7 Strategies to Improve Restaurant Holiday Sales
• Step-by-step Guide To Forecast Restaurant Sales

The team at Lineup.ai is composed of seasoned professionals who hold deep insights into the unique challenges and pain points of the restaurant industry, and are equally skilled in artificial intelligence, machine learning, and data analytics. This fusion of expertise enables Lineup.ai to create cutting-edge AI solutions specifically tailored for the restaurant sector. The technical and analytical prowess of the team, combined with a deep understanding of the unique challenges faced by restaurants, forms the cornerstone of the company's innovation. The team at Lineup.ai also excels in communicating the benefits and applications of AI and machine learning to businesses, ensuring clients fully leverage the capabilities of these solutions.

How to Create a Sales Forecast

11 min. read

Updated October 27, 2023

Business owners are often afraid to forecast sales. But, you shouldn’t be. Because you can successfully forecast your own business’s sales.

You don’t have to be an MBA or CPA. It’s not about some magic right answer that you don’t know. It’s not about training you don’t have. It doesn’t take spreadsheet modeling (much less econometric modeling) to estimate units and price per unit for future sales. You just have to know your own business. 

Forecasting isn’t about seeing into the future

Sales forecasting is much easier than you think and much more useful than you imagine.

I was a vice president of a market research firm for several years, doing expensive forecasts, and I saw many times that there’s nothing better than the educated guess of somebody who knows the business well. All those sophisticated techniques depend on data from the past — and the past, by itself, isn’t the best predictor of the future. You are.

It’s not about guessing the future correctly. We’re human; we don’t do that well. Instead, it’s about setting down assumptions, expectations, drivers, tracking, and management. It’s about doing your job, not having precognitive powers. 

• Successful forecasting is driven by regular reviews

What really matters is that you review and revise your forecast regularly. Spending should be tied to sales, so the forecast helps you budget and manage. You measure the value of a sales forecast like you do anything in business, by its measurable business results.

That also means you should not back off from forecasting because you have a new product, or new business, without past data. Lay out the sales drivers and interdependencies, to connect the dots, so that as you review plan-versus-actual results every month, you can easily make course corrections.

If you think sales forecasting is hard, try running a business without a forecast. That’s much harder.

Your sales forecast is also the backbone of your business plan . People measure a business and its growth by sales, and your sales forecast sets the standard for  expenses , profits, and growth. The sales forecast is almost always going to be the first set of numbers you’ll track for plan versus actual use, even if you do no other numbers.

If nothing else, just forecast your sales, track plan-versus-actual results, and make corrections — that process alone, just the sales forecast and tracking is in itself already business planning. To get started on building your forecast follow these steps.

And if you run a subscription-based business, we have a guide dedicated to building a sales forecast for that business model.

• Step 1: Set up your lines of sales

Most forecasts show several distinct lines of sales. Ideally, your sales lines match your accounting, but not necessarily in the same level of detail.   

For example, a restaurant ought not to forecast sales for each item on the menu. Instead, it forecasts breakfasts, lunches, dinners, and drinks, summarized. And a bookstore ought not to forecast sales by book, and not even by topic or author, but rather by lines of sales such as hardcover, softcover, magazines, and maybe categories (such as fiction, non-fiction, travel, etc.) if that works.

Always try to set your streams to match your accounting, so you can look at the difference between the forecast and actual sales later. This is excellent for real business planning. It makes the heart of the process, the regular review, and revision, much easier. The point is better management.

For instance, in a bicycle retail store business plan, the owner works with five lines of sales, as shown in the illustration here.  

In this sample case, the revenue includes new bikes, repair, clothing, accessories, and a service contract. The bookkeeping for this retail store tracks sales in those same five categories.

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• Step 2: Forecast line by line

There are many ways to forecast a line of sales.

The method for each row depends on the business model

Among the main methods are:.

• Unit sales : My personal favorite. Sales = units times price. You set an average price and forecast the units. And of course, you can change projected pricing over time. This is my favorite for most businesses because it gives you two factors to act on with course corrections: unit sales, or price.
• Service units : Even though services don’t sell physical units, most sell billable units, such as billable hours for lawyers and accountants, or trips for transportations services, engagements for consultants, and so forth.
• Recurring charges : Subscriptions. For each month or year, it has to forecast new signups, existing monthly charges, and cancellations. Estimates depend on both new signups and cancellations, which is often called “churn.”
• Revenue only : For those who prefer to forecast revenue by the stream as just the money, without the extra information of breaking it into units and prices.

Most sales forecast rows are simple math

For a business plan, I recommend you make your sales forecast a detailed look at the next 12 months and then broadly cover two years after that. Here’s how to approach each method of line-by-line forecasting.

Start with units if you can

For unit sales, start by forecasting units month by month, as shown here below for the new bike’s line of sales in the bicycle shop plan:

I recommend looking at the visual as you forecast the units because most of us can see trends easier when we look at the line, as shown in the illustration, rather than just the numbers. You can also see the numbers in the forecast near the bottom. The first year, fiscal 2021 in this forecast, is the sum of those months.

Estimate price assumptions

With a simple revenue-only assumption, you do one row of units as shown in the above illustration, and you are done. The units are dollars, or whatever other currency you are using in your forecast. In this example, the new bicycle product will be sold for an average of $550.00. 

That’s a simplifying assumption, taking the average price, not the detailed price for each brand or line. Garrett, the shop owner, uses his past results to determine his actual average price for the most recent year. Then he rounds that estimate and adds his own judgment and educated guess on how that will change. 

Multiply price times units

Multiplying units times the revenue per unit generates the sales forecast for this row. So for example the $18,150 shown for October of 2020 is the product of 33 units times $550 each. And the $21,450 shown for the next month is the product of 39 units times $550 each. 

Subscription models are more complicated

Lately, a lot of businesses offer their buyers subscriptions, such as monthly packages, traditional or online newspapers, software, and even streaming services. All of these give a business recurring revenues, which is a big advantage. 

For subscriptions, you normally estimate new subscriptions per month and canceled subscriptions per month, and leave a calculation for the actual subscriptions charged. That’s a more complicated method, which demands more details. 

For that, you can refer to detailed discussions on subscription forecasting in How to Forecast Sales for a Subscription Business .

• But how do you know what numbers to put into your sales forecast?

The math may be simple, yes, but this is predicting the future, and humans don’t do that well. So, don’t try to guess the future accurately for months in advance.

Instead, aim for making clear assumptions and understanding what drives your sales, such as web traffic and conversions, in one example, or the direct sales pipeline and leads, in another. Review results every month, and revise your forecast. Your educated guesses become more accurate over time.

Experience in the field is a huge advantage

In a normal ongoing business, the business owner has ample experience with past sales. They may not know accounting or technical forecasting, but they know their business. They are aware of changes in the market, their own business’s promotions, and other factors that business owners should know. They are comfortable making educated guesses.

If you don’t personally have the experience, try to find information and make guesses based on the experience of an employee,  your mentor , or others you’ve spoken within your field.

Use past results as a guide

Use results from the recent past if your business has them. Start a forecast by putting last year’s numbers into next year’s forecast, and then focus on what might be different this year from next.

Do you have new opportunities that will make sales grow? New marketing activities, promotions? Then increase the forecast. New competition, and new problems? Nobody wants to forecast decreasing sales, but if that’s likely, you need to deal with it by cutting costs or changing your focus.

Look for drivers

To forecast sales for a new restaurant, first, draw a map of tables and chairs and then estimate how many meals per mealtime at capacity, and in the beginning. It’s not a random number; it’s a matter of how many people come in.

To forecast sales for a new mobile app, you might get data from the Apple and Android mobile app stores about average downloads for different apps. A good web search might also reveal some anecdotal evidence, blog posts, and news stories, about the ramp-up of existing apps that were successful.

Get those numbers and think about how your case might be different. Maybe you drive downloads with a website, so you can predict traffic from past experience and then assume a percentage of web visitors who will download the app.

• Estimate direct costs

Direct costs are also called the cost of goods sold (COGS) and per-unit costs. Direct costs are important because they help calculate gross margin, which is used as a basis for comparison in financial benchmarks, and are an instant measure (sales less direct costs) of your underlying profitability.

For example, I know from benchmarks that an average sporting goods store makes a 34 percent gross margin. That means that they spend $66 on average to buy the goods they sell for $100.

Not all businesses have direct costs. Service businesses supposedly don’t have direct costs, so they have a gross margin of 100 percent. That may be true for some professionals like accountants and lawyers, but a lot of services do have direct costs. For example, taxis have gasoline and maintenance. So do airlines.

A normal sales forecast includes units, price per unit, sales, direct cost per unit, and direct costs. The math is simple, with the direct costs per unit related to total direct costs the same way price per unit relates to total sales.

Multiply the units projected for any time period by the unit direct costs, and that gives you total direct costs. And here too, assume this view is just a cut-out, it flows to the right. In this example, Garrett the shop owner projected the direct costs of new bikes based on the assumption of 49 percent of sales.

Given the unit forecast estimate, the calculation of units times direct costs produces the forecast shown in the illustration below for direct costs for that product. So therefore the projected direct costs for new bikes in October is $8,894, which is 49% of the projected sales for that month, $18,150.

• Never forecast in a vacuum

Never think of your sales forecast in a vacuum. It flows from the strategic action plans with their assumptions,  milestones , and metrics. Your marketing milestones affect your sales. Your business offering milestones affect your sales.

When you change milestones—and you will, because all business plans change—you should change your sales forecast to match.

• Timing matters

Your sales are supposed to refer to when the ownership changes hands (for products) or when the service is performed (for services). It isn’t a sale when it’s ordered, or promised, or even when it’s contracted.

With proper  accrual accounting , it is a sale even if it hasn’t been paid for. With so-called cash-based accounting, by the way, it isn’t a sale until it’s paid for. Accrual is better because it gives you a more accurate picture, unless you’re very small and do all your business, both buying and selling, with cash only.

I know that seems simple, but it’s surprising how many people decide to do something different. The penalty for doing things differently is that then you don’t match the standard, and the bankers, analysts, and investors can’t tell what you meant.

This goes for direct costs, too. The direct costs in your monthly  profit and loss statement  are supposed to be just the costs associated with that month’s sales. Please notice how, in the examples above, the direct costs for the sample bicycle store are linked to the actual unit sales.

• Live with your assumptions

Sales forecasting is not about accurately guessing the future. It’s about laying out your assumptions so you can manage changes effectively as sales and direct costs come out different from what you expected. Use this to adjust your sales forecast and improve your business by making course corrections to deal with what is working and what isn’t.

I believe that even if you do nothing else, by the time you use a sales forecast and review plan versus actual results every month, you are already managing with a business plan . You can’t review actual results without looking at what happened, why, and what to do next.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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How to Write a Restaurant Business Plan in 2024 (Step by Step Guide with Templates)

A restaurant business plan is a framework that guides you to plan and forecast every element of restaurant management and operations.

This includes anything from your restaurant's menu design , location, financials, employee training , and a lot more.

Creating a solid business plan is important, as it helps:

• Transform your restaurant ideas into reality.
• Boosts entrepreneurial success by 16% (Harvard Business Study) .
• It equips you to navigate challenges before they arise.
• Attracts potential investors.

Planning is key to restaurant success. Without a plan, you're more likely to join the 26% of restaurants that fail within a year.

Create a business plan to set yourself up for success.

Here's how to get started. 

What is a restaurant business plan? 

Before writing a business plan, it is important to understand its fundamentals.

It serves as a roadmap for starting and running your restaurant , making it easy for outside parties, such as investors, to understand your objectives, vision, and plan of action for your restaurant.

The length and level of detail of business plans vary, ranging from brief synopses to large papers. Investors can benefit from clear insights and additional information provided by beginning with a concise plan and working their way up to a detailed one.

In short, a thorough description of the resources allocated to the success of your restaurant should be included in your business plan.

Steps to include in your business plan 

Your restaurant and mission statement needs to reflect your brand and goals, but you don't have to start from scratch.

The Eat App Restaurant Business Plan template , created by industry professionals and packed with insider information, is your go-to manual for creating a profitable business plan.

Your finalized business plan should have 11 essential elements, no matter how you write it. Continue reading below. 

1. Executive summary

A restaurant business plan should always begin with an executive summary. Why?

• 80% of venture capitalists say they read the executive summary first.
• 62% of investors say they would not continue reading a business plan if the executive summary did not capture their interest.
• A strong executive summary can increase the likelihood of securing funding by up to 40%.

An executive summary not only acts as the introduction to your restaurant business plan samples but also as a summary of the entire idea.

The main aim of an executive summary is to draw the reader (oftentimes an investor) into the rest of your business plan.

The executive summary also helps you envision the identity of your restaurant which essentially shapes the customer experience and sets you apart from competitors.

To establish a distinct identity, you need to focus on c ommon elements of an executive summary, including:

• A mission statement  
• Proposed concept development
• Cuisine selection
• The overall execution
• The potential costs
• Expected return on investments (ROI)

Let's take a more in-depth look at the concept development, cuisine selection, and mission statement.

Further reading

• How to write a restaurant executive summary

Concept Development

Selecting the type of restaurant, service style, and atmosphere is the first step towards creating a unique dining experience. Whether you envision a sample menu for a:

• cozy, intimate bistro
• bustling quick-service deli
• fast-casual restaurant
• fine dining establishment

Your concept should reflect your passion and expertise in the industry.

Cuisine Selection

The cuisine you select for your restaurant can significantly influence its success.

Choosing the appropriate cuisine is vital for distinguishing your establishment from competitors and attracting your target market.

To make an informed decision, consider factors such as:

• Market demand
• Expertise and passion
• Ingredient availability
• Competition
• Profitability
• Cultural fit
• Seasonality
• Dietary restrictions and trends

In the highly competitive restaurant industry, keeping track of current and emerging cuisine trends can be a significant advantage.

Creating a mission statement

A well-constructed mission statement communicates the purpose, values, and goals of your restaurant to potential investors and customers alike.

A mission statement serves as a guiding light for decision-makers and employees, fueling their efforts to achieve your restaurant’s objectives.

To create an impactful mission statement, consider the following steps:

• Identify the purpose of the restaurant.
• Contemplate the brand’s image.
• Account for the target audience.
• Incorporate company values.
• Ensure brevity and comprehensiveness.

Related content:  How to Write a Restaurant Mission Statement  

Remember, your mission statement should not only differentiate your restaurant from competitors but also resonate with your target market .

2. Company description

This is where you carefully introduce the company in the restaurant business plan. Include the name of the restaurant you are launching in this field along with its address, phone number, and other important information. Then, also include the owner's information as well as a synopsis or explanation of their background. The restaurant's legal position and its short- and long-term objectives should be outlined in the second section of the company description. To demonstrate your understanding of the changes in the local food business and the reasons why the most independent restaurant investors will be successful in this market, please submit a brief market research.

Here's an example of the page layout:  

Company Description

Restaurant Name: [Restaurant Name]

Location: [Restaurant Address]

Contact: [Restaurant Phone Number] | [Restaurant Email Address]

Owner: [Owner Name]

Experience: [Owner Name] has over [Number] years of experience in the restaurant industry. They have worked in various roles, including [List of Roles]. They are passionate about food and creating a memorable dining experience for their guests.

Legal Standing: [Restaurant Name] is a [Type of Legal Entity] registered in [State/Province].

3. Market analysis

The market analysis portion of the restaurant business plan is typically divided into three parts.

3.1 Industry analysis

What is your target market? What demographics will your restaurant cater to?

This section aims to explain your target market to investors and why you believe guests will choose your restaurant over others.

Comprehending your target market is key to customizing your restaurant offerings to their preferences and needs.

By diving into demographics, preferences, dining habits, and trends, you can fine-tune your concept and marketing strategy to reach and appeal to your target audience effectively.

An example of analyzing your target market

  Comprehending your target market is key to customizing your restaurant offerings to their preferences and needs.

Demographics and preferences

Identifying your primary target market involves considering factors such as:

For example, a neighborhood with a high concentration of families might prefer a family-friendly restaurant with a diverse menu catering to various age groups and dietary preferences.

Conversely, a trendy urban area with a predominantly young and affluent population may gravitate towards upscale dining experiences and innovative cuisine.

Cultural and ethnic backgrounds also have a significant impact on restaurant preferences, with people from different backgrounds having distinctive tastes and customs that influence their dining choices.

By thoroughly understanding the demographics and preferences of your target market, you’ll be better equipped to create a restaurant concept that resonates with them and ultimately drives success.

Dining habits and trends

As the restaurant industry continues to evolve, staying informed about dining habits and trends is crucial for adapting your offerings and attracting customers.

For example, the rise of online ordering and delivery services has significantly influenced dining habits, with many consumers seeking the convenience of having their meals delivered to their doorstep.

Health trends have also had an impact on dining habits, with an increasing number of individuals seeking healthier options when dining out.

• How to find your restaurant's target market

3.2 Competition analysis

It's easy to assume that everyone will visit your new restaurant first, so it is important to research your competition to make this a reality.

What restaurants have already established a customer base in the area?

Take note of everything from their prices, hours, and service style to menu design to the restaurant interior.

Then explain to your investors how your restaurant will be different.

3.3 Marketing analysis

Your investors are going to want to know how you plan to market your restaurant. How will your marketing campaigns differ from what is already being done by others in the restaurant industry?

How do you plan on securing your target market? What kind of offers will you provide your guests? Make sure to list everything.

The menu is the most important part of a restaurant's debut. Your restaurant wouldn't be able to operate without it.

You most likely don't have a final draft at this time, but you should aim to create a mock-up for your restaurant business plan. You can choose a design that you can envision yourself using and add your logo to the mock-up.

• Top Free Restaurant Menu Makers

There are several resources available online if you need assistance with menu design or don't want to hire a designer.

But the price should be the most important component of your sample menu. The cost research you've completed for investors ought to be reflected in your prices. They will have a clearer idea of your restaurant's intended price range as a result.  You'll quickly see how important menu engineering can be, even early on.

5. Employees

The company description section of the restaurant business plan briefly introduces the owners of the restaurant with some information about each. This section should fully flesh out the restaurant's business plan and management team.

The investors don’t expect you to have your entire team selected at this point, but you should at least have a couple of people on board. Use the talent you have chosen thus far to highlight the combined work experience everyone is bringing to the table.

6. Restaurant design

The design portion of your restaurant business plan is where you can really show off your thoughts and ideas to the investors. If you don’t have professional mock-ups of your restaurant rendered, that’s fine.

Instead, put together a mood board to get your vision across. Find pictures of a similar aesthetic to what you are looking for in your restaurant.

The restaurant design extends beyond aesthetics alone and should include everything from restaurant software to kitchen equipment. 

7. Location

The location you settle on for your restaurant should be well aligned with your target market (making it easier to cater to your ideal customer) and with your business plans.

At this stage in the process, it's not uncommon to not have a specific location in mind - but you should at the very least have a few options to narrow down.

Pro Tip: When you approach your investors about potential locations, make sure to include as much information as possible about each venue and why it would be ideal for your brand. 

Example for choosing an ideal location

Choosing the ideal location for your restaurant is a pivotal decision that can greatly influence your success. 

To make the best choice, consider factors such as foot traffic, accessibility, and neighborhood demographics.

By carefully evaluating these factors, you’ll be better equipped to maximize visibility and attract your target market.

Foot traffic and accessibility

Foot traffic and accessibility are important factors in selecting a location that will attract customers and ensure convenience.

A high-traffic area with ample parking and public transportation options can greatly increase the likelihood of drawing in potential customers.

Additionally, making your restaurant accessible to individuals with disabilities can further broaden your customer base and promote inclusivity.

Neighborhood demographics

Analyzing neighborhood demographics can help you determine if your restaurant’s concept and cuisine will appeal to the local population.

Factors such as income levels, family structures, and cultural diversity can all influence dining preferences and habits.

By understanding the unique characteristics of the neighborhood, you can tailor your offerings and marketing efforts to resonate with the local community.

Conducting a market analysis can be a valuable step in this process.

To gather demographic data for a particular neighborhood, you can utilize resources such as the U.S. Census Bureau’s American Community Survey and reference maps.

Armed with this information, you can make informed decisions about your restaurant’s concept, menu, and pricing, ensuring that your establishment is well-positioned for success within the community.

Conducting market research will further strengthen your understanding of the local demographic.

8. Market overview

The market overview section is heavily related to the market research and analysis portion of the restaurant business plan. In this section, go into detail about both the micro and macro conditions in the area you want to set up your restaurant.

Discuss the current economic conditions that could make opening a restaurant difficult, and how you aim to counteract that. Mention all the other restaurants that could prove to be competition and what your strategy is to set yourself apart.

9. Marketing

With restaurants opening left and ride nowadays, investors are going to want to know how you will get word of your restaurant to the world.

The next marketing strategy and publicity section should go into detail on how you plan to market your restaurant before and after opening. As well as any plans you may have to bring a PR company on board to help spread the word.

Read more: How to write a restaurant marketing plan from scratch

10. External help

To make your restaurant a reality, you are going to need a lot of help. List any external companies or software you plan on hiring to get your restaurant up and running.

This includes everything from accountants and designers to suppliers that help your restaurant perform better, like POS systems and restaurant reservation systems .

Explain to your other potential investors about the importance of each and what they will be doing for your restaurant.

11. Financial analysis

The most important part of your restaurant business plan is the financial section . We would recommend hiring professional help for this given its importance.

Hiring a trained accountant will not only help you get your own financial projections and estimates in order but also give you a realistic insight into owning a restaurant.

You should have some information prepared to make this step easier for the accountant.

He/she will want to know how many seats your restaurant has, what the check average per table will be, and how many guests you plan on seating per day.

In addition to this, doing rough food cost calculations for various menu items can help estimate your profit margin per dish. This can be achieved easily with a free food cost calculator. 

• Important restaurant metrics to track

A well-crafted restaurant business plan serves as a roadmap to success, guiding every aspect of the venture from menu design to employee training.

By carefully considering each component of the plan, aspiring restaurateurs can increase their chances of securing funding, attracting customers, and achieving their long-term goals.

Remember, a restaurant business plan is not just a document to satisfy investors; it is a living tool that should be revisited and updated regularly as the business grows and evolves.

By staying committed to the plan and adapting it as needed, restaurateurs can ensure that their culinary dreams have a solid foundation for success.

Growth Marketing Manager at Eat App

Saif Alnasur used to work in his family restaurant, but now he is a food influencer and writes about the restaurant industry for Eat App.

Reviewed by

Nezar Kadhem

Co-founder and CEO of Eat App

He is a regular speaker and panelist at industry events, contributing on topics such as digital transformation in the hospitality industry, revenue channel optimization and dine-in experience.

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Forecasting for Restaurants: Implications for Inventory and Labor

Operating a successful restaurant requires restaurant owners and managers to focus not only on managing day-to-day operations, but also evaluating ways to reduce costs and grow future sales. Currently, some of the most powerful restaurant management systems on the market feature predictive tools around food and labor costs.

Forecasting won’t lead to perfectly accurate results every day but forecasting for restaurants is vital to recognizing trends and responding proactively. Forecasting based on historical data can provide insight into your two largest costs, food and labor, and help you make essential decisions about where to put your resources, when.

What is forecasting for restaurants?

Forecasting for restaurants is estimating key metrics like future sales, customer traffic, or menu item ordering mix based on historical sales data, economic trends, or market analysis. Sales forecasts , based on integrated POS data pulled from your restaurant operations software , are particularly powerful tools in the restaurant industry.

Projected sales and customer traffic data can be used in different areas of restaurant operations, primarily in controlling prime costs . Inventory forecasting is calculating the precise amount of future inventory and production needs for your restaurant, and it also takes into account historical consumption patterns and the shelf life of finished goods. Labor forecasting, ultimately, is delivering a positive customer experience with the optimal lowest labor budget, and it takes into account labor matrixes and the right mix of labor skills.

The best forecasting depends on how you manage information, how much data you have access to, and the unique factors that influence the day-to-day of your business plan. Diving into the specifics of forecasting for restaurants can help you see the usefulness of these tools.

How to forecast your restaurant labor cost

How much of my total costs should be labor.

Forecasting your restaurant labor costs can help you optimize one of your restaurant’s biggest expenses, labor costs .

Commonly, restaurateurs allocate around 60% of their total sales to their prime cost — food and labor. Industry standard recommends that around 30% of your total sales goes toward labor costs. This number can fluctuate depending on the type of restaurant, with quick-service or full-service restaurants requiring different labor percentages.

Key drivers for restaurant labor costs

Restaurant labor costs primarily depend on your particular restaurant industry needs and unique mix of required labor skills. You don’t want too many staff for a quiet dining room, giving you a high labor cost, or too few staff on a full capacity evening, which could lead to poor customer service. In order to optimize costs as well as customer satisfaction, your restaurant labor scheduling should have the right people, in the right place, at the right time.

Calculating restaurant labor costs

Forecasting your restaurant labor costs can be broken down into a basic four-step process. 1. Break the sales forecast down into periods

First, break down your sales forecast into the smallest period of time impacted by a shift in sales. This primarily depends on ticket times: a QSR may have shorter time periods of 15 minutes, while a full-service restaurant with longer ticket times may need to go by day part. 

Think about the difference between a Friday happy hour versus a Sunday brunch. By reviewing historical sales in each time period, you can see how sales fluctuate throughout the day, allowing you to have labor applied when it is needed the most. This will require gathering historical average sales amount data per time period, which can be extremely labor intensive and tedious to do without restaurant operational reporting software .

2. Translate the period sales forecasts into labor

Next, you will need to translate the period sales forecasts into how much labor is required for that amount of business. Labor calculations are not always a black and white formula. It may take a minimum of three employees to run a small restaurant, regardless of sales. But labor becomes more efficient as it increases, so while an increase of $70 in sales per hour may mean you need to add a fourth employee, you may not need to add a fifth employee until you have an additional $100 in sales per hour.

When you’ve defined how much staff you require at different sales data periods, you should also reference visiting your sales per labor hour (SPLH) and labor percentage goals. With these considerations, you can create a labor matrix or labor guide to help you understand optimal labor in relation to future sales levels.

3. Schedule accordingly

Once you know your labor matrix, consider employee data when working to meet your labor cost goals. Employee preferences are a factor to keep in mind, as increased employee satisfaction can lead to reduced turnover, further lowering your labor costs. By using collected employee availability to match projected sales , you can use up-to-date information to create schedules informed by forecast restaurant sales data. 

Scheduling software can help simplify this process.

4. Manage the labor cost in real time

Finally, you will want to use sales forecasting , along with your labor guide, to review your work and determine how much labor you need in real time during each period of the day. Your actual sales will not perfectly line up with your sales forecasting every day, which means your sales won’t always match your labor matrix. But by using managerial restaurant industry experience and up-to-date restaurant reporting to smooth out forecasts, you can adjust to stay close to optimal labor, regardless of scheduled labor, through using tools like breaks, cuts, and call-ins.

How to forecast your restaurant inventory

Forecasting for restaurants can also help optimize your other main cost, food. 

Inventory Projections

Your inventory projections should start with sales data forecasting , tracking your daily sales trend between this year and last year. First, by averaging sales by day of the week for the prior eight weeks, you can compare those numbers to the average sales by day of the week for the same eight weeks the previous year. From there, you can determine the trend increase (or decrease) in sales this year. Finally, you can apply that trend percentage by day of the week in the period for which you are forecasting.

Looking at Past Years and Seasonal Trends

These forecasts should also consider past years and seasonal business growth trends. As a restaurant owner or operator, you can analyze the core components of your forecast by using your own experience and knowledge. Take a look at the growth trend, but also consider weekly fluctuations and annual historical sales seasonality. In addition, consider other unique real-time variables, such as weather, events, and traffic.

Profit expectations

You can forecast your inventory needs by tracking and analyzing inventory purchasing with sales data in mind. By analyzing your stock usage compared to stock counts, you can see trends to forecast future menu item orders. Understanding your projected sales volume can help you create profit expectations and strategically plan for your future business growth . By understanding sales projections, as well as other key metrics from your restaurant accounting software , you are better informed to make large decisions, from big equipment purchases to loans and investments.

Using Historical Sales Data to Drive Your Decisions

Applying forecasting to operations uses historical data to drive your decisions and helps inventory control in three main ways.

First, because if it’s not on your shelf, you can’t waste it, sales forecasting can help limit food waste. By adjusting your inventory to reflect how busy you will be and what menu items guests will order, you can streamline your prep process and accurately forecast your stocking needs to attain a low percentage of error.

Next, forecasting can facilitate automated ordering. You can increase efficiency and accuracy with your food and beverage orders, calculating ideal usage from your menu item mix. 

Finally, forecasting allows you to take advantage of suggestive ordering. This smart tool leverages historical consumption patterns and sales forecasts to automate configurable par levels and suggest optimal on-hand inventory levels. By predicting actual usage, you can reduce staff time spent on ordering.

Why conduct a restaurant sales forecast?

When you forecast restaurant sales , you can streamline operations and optimize costs, both in your inventory and labor.

An accurate restaurant sales forecas t can help you meet the inventory demand of projected customer traffic. Forecasting can help you spot errors in your inventory, such as receiving mistakes, incorrect portioning, or employee theft. By maintaining an optimal level of inventory, you ensure you don’t run out of customer favorites or high margin items.

Forecasting for restaurants can also optimize your guest experience while ensuring streamlined labor costs . With schedules informed by forecasting, you can ensure proper staffing levels and a mix of labor with the right skills, delivering an optimal guest experience at the lowest cost. Although restaurant sales forecasting is not 100% foolproof, the more often you complete restaurant sales forecasting, the better you will become. Complete accuracy isn’t feasible, because you can’t predict the future, the weather, or what your neighboring restaurant may do. But forecasting can help keep your business growth on track, by documenting how you performed within the same time frame previously. Forecasting can help you spot trends and anomalies, allowing you to recognize patterns and react proactively. 

By reviewing and comparing sales forecasts, your sales forecasting will become more accurate as time goes on.

Forecasting for restaurants helps you get the most out of the data available to you, both in day-to-day decisions and long-term planning. For restaurant owners and operators always thinking two steps ahead, forecasting restaurant sales can be a key tool for meeting future challenges.

Restaurant365 incorporates restaurant accounting software and restaurant operations software into an all-in-one, cloud-based platform. For 10 tactics you can start implementing today to reduce your prime costs, download the prime cost e-book,   Guide to Reducing Restaurant Prime Costs .

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Plan Projections

ideas to numbers .. simple financial projections

Home > Industry Templates > Restaurant Business Revenue Projection

Restaurant Business Revenue Projection

The restaurant business revenue projection template provides a quick and easy method to estimate revenue generated by a new restaurant for the next 5 years.

The restaurant financials template starts with the number of seats in the restaurant and estimates food revenue based on the daily customer turnover and average cover price. The template estimates drink revenue using total customers including bar customers, at an average drinks price.

The template also allows for banquets, and up to five other sundry income categories such as gaming machines, to give a complete picture of the projected revenue.

The restaurant business revenue projection is useful for any type of restaurant business wanting to estimate revenue based on seat numbers and cover prices.

Restaurant Business Revenue Template Download

The restaurant business revenue projection template is available for download in Excel format by following the link below.

About the Author

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.

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How to Write a Restaurant Business Plan + Free Template

You have cracked the recipe for good food & great ambiance and are planning to start a restaurant, fantastic!

Whether starting a cozy corner cafe, a theme-based fine dining restaurant, or growing an existing one, you will need a restaurant business plan as a roadmap for your business success.

But writing a business plan is complex, isn’t it? That is why we are here with our comprehensive restaurant business plan template to help you in writing yours.

Key Takeaways

• Highlight the concept of the restaurant along with the ambiance, types of cuisines, customer base, and USPs of the restaurant in the plan.
• Utilize tools for SWOT analysis to assess your strengths, weaknesses, opportunities, and threats for making informed decisions.
• Craft an impactful executive summary that outlines your restaurant’s concept, marketing approach, financial outlook, and team expertise to attract potential investors and partners.
• Conduct thorough market research to understand market trends, consumer preferences, and the needs of your target market.
• Analyze the competitive landscape, and identify direct & indirect competitors, to develop strategies that maintain your restaurant’s competitive advantage.
• To ensure efficient daily operations, provide in-depth operational plans that incorporate staffing, additional services, inventory control, and customer service.
• Create realistic financial projections for sales revenue, expenses, and profit forecasts while considering contingencies & emergencies.

Why is a restaurant business plan important?

Crafting a restaurant business plan is daunting but its significance cannot be underestimated. It is essential to drive your business toward success.

In the competitive atmosphere where there are 700,000+ restaurants in the USA, having a proper plan will help you get funding and better adaptability in a constantly changing business environment.

Even if funding isn’t a primary concern, a plan provides the restaurant owner or manager with clear direction on how to create actionable strategies for reaching business goals.

Your business plan will also help solidify the viability of the restaurant’s idea and concept.

In short, think of it as a guide for running all the aspects of the business smoothly.

How to write a restaurant business plan: Step-by-Step Guide

Since we are talking about a restaurant business plan; let us walk you through this restaurant business plan outline step-by-step without any delay:

1. Executive summary

An executive summary is the first section and the most significant section of any business plan. It captures the essence of your whole plan summarizing it for a quick understanding of your business.

Think of it as a sneak peek for the readers that draws their attention to the entire restaurant business plan.

You should start your summary with a compelling introduction with the name of your restaurant. It should also focus on the essence of your restaurant concept.

Give a brief overview of your unique selling points, emphasizing what makes your restaurant special. It might be the signature dishes, innovative ambiance, prime location, or some new cuisine experience.

Apart from the above essential points, your executive summary should include:

• Mission statement
• Vision statement
• Execution structure
• Potential costs
• Expected return on investment

Many readers will read the executive summary before making a judgment, so if this is all they read, make every word count.

Also, SBA advises to include financial projections in your executive summary if you’re using your business plan to request funding.

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2. Company Overview

Company overview is a part where you fully introduce your restaurant business including legal business structure, location, and your restaurant’s proposed concept.

Here you have the liberty to be a little more creative in describing your restaurant in the whole business plan.

Here are some points to incorporate in the company overview:

• Detailed vision and mission statement
• Type of restaurant (fine dining, small restaurant, bistro, cafe, etc.)
• Legal business structure
• Service style
• History and background of the restaurant (if existing)
• Owners’ names and qualifications
• Cusinies & menu highlights
• Restaurant size and seating capacity
• Operating hours & meal plans
• Related service availability (delivery, catering, etc)

Mainly emphasize the chosen location because easily accessible locations with high foot traffic will attract more walk-in customers. And if you haven’t decided on a specific location yet, then mention the type of place you are looking for to give an idea about it to your readers.

Besides, mention the short-term and long-term goals of your restaurant business in the later part of the company description. Along with that mention regional industry trends and your USPs.

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3. Market analysis

The market analysis section provides you with a clearer picture of your target market, competitors, and industry trends.

Based on the above details, one can make informed decisions while creating strategies. Therefore, make this section precise and concise to understand.

Here are some steps to follow to write an engaging market analysis section of the restaurant business plan:

• Define your customer base: Identify and describe whom you are going to serve. Make a consumer base after considering the demographics, location, and concept of your restaurant.
• Competitive analysis: List out the names of other restaurants in your location and do the SWOT analysis. You can get the competitive advantage of your restaurant this way.
• Market trends: Discuss any shift in consumer behavior like healthy choices, an increase in vegan food consumption, or technological breakthroughs that might affect your restaurant.

Consider conducting market research, TAM-SAM-SOM analysis , and SWOT analysis to get insights for this section.

Remember, this section helps your readers and potential investors understand your target market, restaurant market overview, market size, and growth potential, so make sure you play your cards right.

4. Sample Menu

The most vital step in launching your restaurant business is the menu. A well-curated menu design will sell itself for your restaurant. Even if you are a new restaurant, then present the sample menu with the name and logo of your restaurant on it.

The menu will showcase all the unique offerings your direct competitors might not provide. Not just the list of cuisines but the pricing is also crucial. This way potential investors and readers can understand your restaurant’s target price point.

Plus your menu should be in sync with target customers; for example, a restaurant near the university should contain more beverages and delicious food options for brunch as students prefer those things more.

Consider your menu as a part of branding, choose the same theme for the menu as for the restaurant.

5. Restaurant Design

Restaurant design is the part where you can show your restaurant concept to potential investors and readers practically. Moreover, create a mood board to explain things smoothly.

Utilize this section to show the uniqueness of your restaurant, and how it is different from competitors.

Explain how your design represents your restaurant’s branding and visual identity. Furthermore, mention how your target market will enjoy and appreciate the ambiance you plan to provide.

Note that restaurant design is one of the key elements to running a successful restaurant, so match the theme and cuisines accordingly.

In this section, you also have to provide a detailed description of how many seats are going to be there along with the floor plan of your restaurant.

6. Management Team

As the name suggests, the management team section of your restaurant’s business plan introduces restaurant owners, key executives, and the management team. It also incorporates the experience, qualification, and restaurant industry knowledge of every individual who is on the team.

A strong management team section can be essential to weigh authority and help potential investors be confident about your restaurant’s idea and vision.

You might consider including the following information in the management team section:

• Business owner or founder’s information
• Executive chef and culinary team
• Front-of-house manager
• Operations and back-of-house team
• Advisors/consultants
• The organizational structure of the team

Showcase how each member fits and what roles & responsibilities they will play.  You should include a resume-styled summary for each person in the restaurant’s management section.

7. Operations Plan

The operations plan section outlines the daily business processes and activities centered on achieving the restaurant dream and objectives described in the rest of the plan.

A detailed operations plan helps you and your team define your responsibilities, daily tasks, and short-term goals you need to achieve, keeping track of your long-term objective.

Here are a few key elements to include in your operations plan section:

• Staffing and training
• Operating hours
• Operational process
• Tools and equipment
• Inventory control
• Technology and software
• Quality control measures
• Customer service policies

Remember it should incorporate all important daily tasks. Also, an operations plan is a living document, you can change it often according to the change in the dynamics of the work.

Read More: The Ultimate Guide to Restaurant Operations Planning

8. Marketing Plan

Even with great food, prices, and ambiance, you won’t attract enough diners without marketing.

Thus, a well-crafted restaurant marketing plan is necessary to spread awareness and build a strong brand presence.

The marketing plan can help you streamline your marketing efforts and create impactful and effective marketing campaigns while keeping track of the projected budget and maximizing return on investment.

Hence, this is the section in which you give an idea to your potential investors about how you will acquire new customers and retain existing ones. This section should include:

• Target market and their dining habits
• Branding and positioning
• Marketing strategies (website, social media accounts, etc.)
• Marketing Calendar
• USPs of your restaurant (unique ambiance, amiable staff, new cuisines in the local area)
• Your marketing goals
• Customer retention strategies (loyalty program, giving coupons or discounts on bulk orders or events)

Even if you are going to hire a PR agency for marketing, then mention it and the reason why you chose them.

After taking care of marketing, let us move further to finances.

Read More: Step-by-Step Guide to Restaurant Marketing Plan

9. Financial Plan

The financial plan is the most crucial and demanding section of any business plan. It is one of the deciding factors for potential investors, banks, or any financial institute to invest in your restaurant business.

This section of your plan details your restaurant’s financial information and how it will reach its financial goals or how much revenue potential it has.

Here are key components and statements that you should include in your financial plan section:

• Pro forma profit and loss statement
• Break-even analysis
• Balance sheet
• Sales forecast
• Detailed cost analysis
• Cash flow projections
• Business ratios
• Funding request
• Tax considerations
• Exit strategy

Before you create financial projections, know how many seats the restaurant will have and what services you plan to provide. This will help you in making realistic financial projections if you are going to start a new business.

Also, if you are asking for funding, then mention where you will utilize your funds.

We hope that this sample restaurant business plan will provide you with an idea for writing a successful plan.

Restaurant Industry Highlights 2024

• Growth forecast : National Restaurant Association predicted US restaurant sales to reach $898 billion in 2022 which would further grow by 4% yearly to reach $1.2 trillion by 2030.
• Technology is everywhere : Automation is helping staff maximize their efficiency by handling orders, deliveries, and communication effectively.
• Sustainability & ethical sourcing : Eco-friendly practices such as minimizing food waste, avoiding single-use plastics, and ethical plus local sourcing are encouraged by customers.
• Delivery is the new deal : People prefer deliveries over dining out as they are time-saving. So, there is an incline in the number of delivery apps and delivery services providing restaurants.
• Kiosks are the preference : The number of people who prefer ordering and paying through kiosks is increasing due to the convenience.

How to Refine & Present a Restaurant Business Plan

Once you have written your entire business plan, it is time to read and re-read it and make it error-free. You have to be confident about every aspect of the plan before you present it in front of your audience.

Moreover, alter your plan to suit different audiences to enhance your communication. For instance, keep your plan professional and include all the growth potential, profitability, and ROI data when you present your restaurant business plan for seeking funding.

Also, when you present your restaurant business plan to potential partners or vendors, emphasize collaboration benefits and how it can help in their individual growth.

Apart from the above points, make sure your plan has various engaging visuals, interactive elements, and enhanced storytelling to present all the data interestingly. Thus, make a digital presentation of your plan to incorporate all the above things clutter-free.

Once you are confident, it is time to email your plan to the people already on your mind. And give a pat to yourself for finally taking that step.

Download a sample business plan for a restaurant

Ready to kick-start your business plan writing process? And not sure where to start? Here you go, download our free restaurant business plan pdf , and start writing.

This intuitive, modern, and investment-ready template is designed specifically for restaurants. It includes step-by-step instructions & examples to help in creating your own restaurant business plan.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Related Restaurant Resources

• Restaurant Marketing Plan
• Restaurant Financial Plan
• Restaurant Operations Plan
• Restaurant Industry Trends

Discover how Upmetrics can help you write a business plan

With Upmetrics, you will receive step-by-step guidance, customizable templates, 400+ sample business plans , and AI assistance to streamline your business planning process.

In fact, if you are not adept with finances, the financial forecasting tool Upmetrics provides will help you create realistic financial forecasts for 3 or more years.

Whether you’re starting a new venture or looking to grow one, Upmetrics offers the resources and insights you need to develop a successful & professional business plan that aligns with your goals.

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Frequently asked questions, why do you need a restaurant business plan.

A solid business plan is an essential tool for anyone looking to start or run a successful restaurant business. It helps to get clarity in your business, raise money, and identify potential challenges while starting and growing your business.

How to get funding for your restaurant business?

There are several ways to get funding for your restaurant business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

What is the easiest way to write your restaurant business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of restaurant business plan samples and edit it as per your needs. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

Can a good restaurant business plan help me secure funding?

Indeed. A well-crafted restaurant business plan will help your investors better understand your business domain, market trends, strategies, business financials, and growth potential—helping them make better financial decisions.

What's the importance of a marketing strategy in a restaurant business plan?

Marketing strategy is a key component of your restaurant business plan. Whether it is about achieving goals or helping your investors understand the return on investment—an impactful marketing strategy is the way to do it!

Here are a few pointers to help you understand the importance of having a marketing strategy:

• It provides your business an edge over your competitors.
• It helps investors better understand your business and growth potential.
• It helps you develop products with the best profit potential.
• It helps you set accurate pricing for your products or services.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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DoorDash Posts Better-Than-Expected Q1 Sales but Shares Fall on Cost Concerns

DoorDash reported higher-than-expected revenue in the first quarter as strong growth in U.S. grocery orders helped make up for slowing restaurant demand

FILE - The DoorDash app is shown on a smartphone on Feb. 27, 2020, in New York. DoorDash will reports earnings on Wednesday, May 1, 2024 (AP Photo)

DoorDash reported higher-than-expected revenue in the first quarter as strong growth in U.S. grocery orders helped make up for slowing restaurant demand.

But the company's shares fell more than 15% in after-hours trading Wednesday as investors appeared concerned about rising costs.

DoorDash said its net loss narrowed to $23 million in the first quarter, compared to a loss of $161 million in the same period a year ago. The loss, of 6 cents per share, was higher than the 3-cent loss Wall Street had forecast, according to analysts polled by FactSet.

DoorDash said it increased both marketing expenses and research costs during the quarter. The company, which laid off 1,250 people at the end of 2022, is also hiring again to improve its products, DoorDash Chief Financial Officer Ravi Inukonda said Wednesday during a conference call with investors.

“Our goal is not just to drive strong growth in 2024, but for many years to come,” Inukonda said.

DoorDash also said it expects pretax earnings between $325 million and $425 million in the second quarter. The midpoint of that range — $375 million — is less than the $394 million that analysts are forecasting. Inukonda said he expects pretax earnings to improve in the second half of this year.

Photos You Should See - April 2024

The San Francisco-based delivery company said Wednesday its revenue rose 23% to $2.51 billion in the January-March period. That was higher than the $2.45 billion Wall Street was expecting, according to analysts polled by FactSet.

DoorDash said its total orders climbed 21% to 620 million. That also surpassed expectations; analysts were forecasting 607 million orders.

The value of U.S. grocery orders doubled from the same period last year. DoorDash began offering grocery delivery in 2020 and continues to add grocery options. In March, Giant Eagle expanded the number of stores offering same-day DoorDash delivery in Pennsylvania and other states. In April, DoorDash added some West Coast grocers to its offerings, including Haggen and Vallarta Supermarkets.

DoorDash said U.S. restaurant order value also grew, but at a slightly slower pace than last year. DoorDash said its U.S. restaurant business remains healthy, and it saw record order frequency from users during the first quarter, but it's not growing as quickly as newer businesses like grocery.

Still, investors were clearly rattled this week by McDonald’s and Starbucks , which both reported lower store traffic in the most recent quarter as inflation-weary customers in the U.S. and other markets shift from dining out to eating at home.

“I do understand that there are some headwinds that certain merchants face when it comes to in-store traffic,” DoorDash CEO Tony Xu said. “But I think on the digital side, we tend to see pretty strong demand.”

DoorDash said new rules in New York and Seattle establishing minimum wage requirements for delivery drivers has increased prices for consumers, resulting in reduced sales. It estimated that the new rules will result in $110 million in lost sales annually for its merchants in New York and $40 million in lost sales in Seattle.

DoorDash absorbed some of those increased costs in the first quarter but expects those costs to decrease as the year progresses. The company said the rules had a minimal impact on its business, lowering total orders by less than 1% in the first quarter.

Xu said he doesn't expect similar regulations to pass in many other cities, either in the U.S. or abroad.

“I mean, think about the billions of dollars or tens of billions of dollars that you’re adding to the local economic GDP or the fact that you’re offering a service that consumers love and a place where anyone can really earn extra income on their own time,” Xu said. “Who wouldn’t want that? I think most governments think like that.”

Copyright 2024 The  Associated Press . All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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• Food guides for travelers /

Top-5 Restaurants in Moscow-City business district

Table of contents

• 1. Burgers with healthy buns
• 2. Beef, cocktails, and karaoke
• 3. A slice of Bali in Moscow
• 4. The highest restaurant in Europe
• 5. Lobster and octopus with a view

The Moscow-City business district is known for the headquarters of Russian and global companies as well as for the newest landmarks of Moscow, the skyscrapers, and one of the biggest malls in the city, Afimall , full of fashion and beauty stores, cafes, and leisure activities. Here is our list of 5 best restaurants in Moscow-City. Leading Moscow chefs and bartenders serve food and drinks to remember, from burgers with avocado to grilled octopus, from sweet potato waffles to matcha tea with a piña colada flavor. These restaurants also offer great entertainment like music shows, karaoke, and parties with DJs. You may take a break here after sightseeing Moscow from above, relax after shopping, and make friends with people from tech startups. At lunchtime, and in the evenings CEOs and business leaders gather there making Moscow-City restaurants the best place for networking in the city.

Burgers are made with meat, cheese, tomatoes, onions, pickles and are seasoned with ketchup, mustard, or another sauce. The ingredients are placed between two halves of a bun. Typically, burgers are made with beef, but other types of meat, such as turkey, chicken, and salmon can be used as well.

The Misha Fisher in Jaffa restaurant’s chef replaces burger buns  with avocado halves making the kosher version of this street food. Try here also sorrel soup, hummus, and falafel. There are no dairy dishes on the menu, it’s a kosher and halal certified meat restaurant. But the cuisine is not Jewish only. In their reviews, people praise Misha Fisher in Jaffa’s Peruvian ceviche, a Thai tom yum soup, and Maki sushi rolls with vegan cheese. The restaurant works in the Afimall shopping center and is closed on Saturdays.

Steaks and shrimp pasta are the highlights of Six Floor Restaurant on the 6th floor of the Oko tower. The bartender here flavors his cocktails with essential oils making them one-of-a-kind drinks. Reviewers on Restaurant Guru laud the restaurant’s karaoke club, City Voice , for its acoustics and futuristic design. In-house backing vocalists help City Voice’s guests to perform most tricky pop songs and rock ballads. The restaurant is open 24 hours a day, they start serving breakfasts at 6:30 am. 

Matcha tea served in Touch of matcha cafe in the IQ Quarter tower is believed to be the best in the city. Definitely, the matcha menu here is the longest in Moscow, with 13 versions of tea, from Matcha Latte to Matcha Piña Colada . The cuisine is Indonesian and vegetarian, on Restaurant Guru you may find positive feedback about poke and buddha bowls , cereal dishes, and avocado toasts. Waffles get special mention, try those made of sweet potato and served with a poached egg as well as waffles with coconut ice cream, caramel and strawberries.

It is a popular seafood meal with a buttery savory flavor. Crabs may be boiled, grilled, deep-fried, stewed, or steamed. There is a wide range of dishes with crabs.

Birds self-described as the highest city restaurant in the world is located on the 84th floor of the Oko tower at a height of 354 meters. At least, it is listed in the Russian Book of Records as the highest restaurant in Europe. You will see breathtaking views of Moscow here together with getting fresh crabs  and yummy ice cream. One of the restaurant’s rooms is called Secret Garden and looks like a genuine conservatory. It opens at 6 pm. There is also a karaoke room with a separate entrance and a club famous for its music stage shows.

Reviewers on Restaurant Guru note great views of Moscow from the terrace of Bamboo.Bar , a restaurant located in the City of Capitals tower. Guru Vibes parties on Saturday nights are also highly praised for starring leading Russian DJs and electronic music performers. The restaurant’s signature dishes are seafood salad with Thai tomatoes and green tapioca chips as well as lobster miso soup  and grilled octopus. Restaurant rooms are decorated with natural elements and antiquities. A 12-meter-long bar counter is Instagram-worthy.

The Moscow-City business district restaurants have become new places-to-see on their own. Visit them if you want to get a special gourmet experience and to discover a new side to the Russian capital.

I am absolutely fascinated by the Misha Fisher in Jaffa restaurant! As someone who loves to experiment with food, this burger featuring avocado buns is definitely on my to-try list. Additionally, I am intrigued by the fact that this restaurant serves kosher and halal certified meat, but also has Peruvian, Thai, and vegan dishes on the menu, making it a perfect place for foodies looking for a diverse range of culinary experiences.

Great food and best restaurants in Moscow

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