Running a restaurant requires lots of work, and increasing sales is not always easy with the ever-changing economic conditions. However, with the help of forecasting software, anyone can learn how to increase revenue and grow the bottom line in no time.
By calculating labor projections and necessary inventory levels, forecasting software can show you how to drive sales by cutting down on unnecessary costs while optimizing operations.
How Your Restaurant Benefits
With the help of automation, business owners are able to not only produce more accurate short- and long-term predictions but also transform their workplaces to become more efficient. By basing important decisions on carefully calculated projections and accurate data, restaurants can become better equipped to deal with the trials and tribulations in their future.
Having control over the supply chain is a key component of operating any restaurant business. As food inventory generally has a shorter lifespan in comparison to other industries such as retail, over-estimating demand and over-stocking can lead to excessive waste and food costs.
Internal control is another benefit of forecasting as the anticipation of future sales can inform businesses when to or when not to hire, when to expand, and when to develop marketing plans.
By anticipating peak times, restaurant managers can hire the appropriate number of employees and ensure they are trained in time to meet the surge in demand. This will also inform them when sales and demand may experience lags, which will allow them to schedule fewer employees than usual.
Sources of Bleeding Costs
Many restaurants are completely unaware of the extra revenue they could be bringing in by cutting down on unnecessary costs in their day-to-day operations. With a forecasting strategy in place, they will gain a clear picture of exactly where these bleeding costs may be coming from.
Possible sources could include-
- High turnover rates - Turnover rates can be especially higher in the restaurant industries to keep up with seasonality in demand. However, this can be limited by cooperating with employees to keep them happy. It's important for managers to remember that keeping trained and valued staff members on board will be significantly cheaper than regularly hiring and training new employees.
- Ineffective scheduling - Scheduling too many employees than necessary can decrease productivity as there won't be enough tasks to keep everyone busy. On the other hand, being short-staffed during moments of high demand can lead to poor customer service as clients are forced to wait in long lines while the employees are overwhelmed by the workload. Creating demand-based employee schedules is an important component when finding ways to attract and retain loyal customers.
- Poor inventory management - Poor inventory management is a drain on resources as it can lead to food shortages or excess waste, which will ultimately affect customer satisfaction. Popular items on a restaurant menu should always be kept in stock; otherwise, customers may become frustrated and look elsewhere the next time they dine. On the other hand, over-ordering can lead to excess waste and the money spent on this surplus inventory would have been wasted.
- Not investing in proper technologies - While there are many new technologies that can help optimize day-to-day practices, it would be a poor investment to purchase products that don't contribute to the bottom line. Remember that these costs can add up quickly so evaluate which technologies will benefit profits before making the purchase.
Solutions of Forecasting
Although there will always be roadblocks that can't be avoided, the problems listed above can be at least minimized by using forecasting software. To get the most out of this technology, it's important to keep some things in mind-
The restaurant industry is fast-paced and ever-changing, so sticking to forecasts that are too rigid can cause more problems than they solve. There will be unexpected changes and adjustments that need to be made based on external factors such as changes in weather or economic conditions. Adjusting for these shifts will keep customer satisfaction levels high while keeping staff members happy.
Stop relying on spreadsheets
With new technologies utilized by businesses all the time, it's important to stay current and move on from outdated methods like spreadsheets. These older solutions can take up too much time and leave room for human errors. Switching to cloud-based forecasting systems can keep business data secure, save time and resources, and increase the accuracy of projections.
After producing reliable forecasts based on data, businesses should use this information to budget accordingly. Most companies have individual budgets for labor, inventory, and several other necessities. By using the predictions from a forecast, businesses can gain better insight into budgeting for these different categories. Restaurant managers will be able to remain confident that every item is in stock and ordered at the optimal level to limit waste and over-spending.
All branches of the business are important and keeping an open line of communication for the whole team is essential. Once the forecasting strategy is in place, owners can also keep this line of communication open with employees and managers for information regarding future forecasts. This will allow them to have a better grasp of smaller issues they may have missed in the past, and keep the operational and organizational strategies aligned.