Restaurant forecasting for your pizzeria is as vital to your restaurant’s health as your recipes or your customer service. To not forecast is as reckless as driving an 18-wheel truck with a blindfold on. It’s imperative not only to know where you are going but to plan for the pitfalls along the way proactively. You’ve dealt with these pitfalls before, but this time you can inform your future self on how to prepare for them.
Proper forecasting breaks down into several categories. The most predominant is sales forecasting, and typically you’re going off of last year’s sales. But to be more proactive about it, look at last year’s sales along with whatever else could affect that trend. COVID significantly
affected the trend this year; nonetheless, it is still a trend. Depending on how much you were producing in revenue this time last year, you might adjust it by a set percentage less. While on a typical year, you would want to have a minimum of three percent above the previous year in line with the average national GDP.
Forecasting is best done on a spreadsheet, applying your point of sales computer’s previous sales records. Additionally, take into account last year’s weather and then use notes of large events related to the pop or decline in sales. For example, if there was an ice storm last year, and the weather this year looks sunny, you don’t want to budget the same and assume a lackluster week. Meanwhile, if you had a massive event last year that won’t occur this year, then that sales pop should be out of the forecast.
The forecast, in and of itself, doesn’t do anything if not put into practice. The forecast must get utilized by all managers to gauge how much to spend on payroll and food costs. This forecast needs to be a real legitimate sales expectation, not overly confident or overly negative. This expected revenue can’t be a hunch because you will decide how many hours you schedule based on this figure. Your food ordering will have to fall in line with that sales figure as well.
Labor and Schedule Forecasting
The beauty of most modern online schedulers is they take your forecast and tell you the exact amount of hours and labor you can afford to schedule. My POS integrates with my online scheduler program, which is a fantastic asset. I’ve wanted a highly functioning integration between a POS and scheduler for the last decade, and it finally exists. Now I can see what our payroll number should be and how far from it we land daily. We can now match up projections to actuals and avoid a large variance. This allows us to dependably hit our labor targets.
Food Cost Purchase Planning
You need to decide your set percentage ideal food cost. Once you know how much you plan to sell, you’ll know exactly how much you can afford to spend. Take your budget and break down how many days of the week you plan to purchase and what you can afford for each invoice. Have whoever places the order know what the number is and where the purchase for that invoice will land. If you purchase online, this is simple; if you don’t, you’ll need your vendor to tell you the full invoice cost before you approve the order. Not purchasing this way will kill your budget early in the week with an overspend invoice. Overspend doesn’t always fix itself by less spend in the next week. Instead, overspend leads to staff acting wasteful with an excess of product on hand. Riding the line and budgeting daily is how you save from waste and a mismanagement of funds.
Utilities and Misc. Random Costs
Forecasting is a tool for your staff and your finance supervisor as well, which is most likely you. Forecast and plan for large spending events on your calendar. Events like large insurance bills, new menu printing, Christmas gifts, equipment maintenance, and every other random quarterly, bi-yearly or annual costs you incur. Budget appropriately to avoid a surprise you should have seen coming because you didn’t appropriately forecast. Use a calendar in tandem with your spreadsheet to be aware of all these events ahead of time.
Three Tier Planning
I find it easiest to break the expenses down into a typical week, a busy heavy week and a slow week. By going with tiers of what kind of week we’re planning for, staff can plan correctly for food purchases and labor schedules. Each year right after Labor Day, we’re flying high with tons of sales and labor hours, then boom, next week school is back on, and it’s dead. If we don’t predict that and assume each week will be like the one before, we will blow out our budget. With three tiers, you’ll find yourself saying things like this to staff, “This is a heavy week we’re coming into, so don’t understaff.” OR “I know last week was bonkers, but this week is historically one of our slowest, budget for a slow, low tier week.” This way, YOU decide your fate, lead the charge, and are proactive instead of reactive.
A 13-Month Operating Calendar vs. 12-Month Accounting Calendar
Accounting software like QuickBooks runs on a 12-month calendar. You need a 12-month fiscal profit and loss for your accounting, reporting, and taxes. You’ll need to have solid books in this format, but this is not what you will or should use for staff. You also need an operating profit and loss statement and forecast that runs off a 13-month calendar. Comparing a February with four Fridays to a January with five Fridays will always skew the metrics. That’s why it’s essential for any operational forecasting to be in a 13-month calendar with 13 sets of four, seven-day periods. My business operates with each week starting on Monday and ending on Sunday. We base our budgeting for labor and food cost on these seven-day & four-week increments. That way, we can compare apples to apples and not apples to
oranges. To do it on a 12-month calendar is skewed before it even starts.
Doing the proactive work of calendar planning, event planning and weather comparison will maintain order. Never allow yourself to forget planning large utility expenses either. Demand your staff abide by the forecast for food cost and payroll based on a 13-month operational budget. This will allow you to create a clean accountant-ready, 12-month calendar you’ll be proud of. If you do all these things, you’ll have your books tight and your head above water.
MIKE BAUSCH is the owner of Andolini’s Pizzeria in Tulsa, Oklahoma.