Labor and inventory forecasting help save money, reduce waste, and enable effective restaurant growth in a highly competitive landscape.
Running a profitable restaurant can be challenging. On top of balancing employee schedules, back-of-house management, customer experience, and maintaining inventory, a restauranteur is also tasked with the less-pleasant job of bookkeeping and managing funds. This difficult work balance is part of the reason that 60% of new U.S. restaurants fail within their first year of opening, and why most restauranteurs only manage a profit margin between 2% and 6%.
Labor and inventory forecasting provide a way to keep your restaurant open through that uncertain first year, and profitable for long afterward.
What is Forecasting?
Restaurant forecasting is the process of using data to make cost-effective decisions when it comes to labor and inventory expenses. Restaurant labor forecasting allows you to cut down on the financial waste that comes with overscheduling, and restaurant inventory forecasting provides essential insight into how you can save money throughout your ordering process. By making informed decisions in these key areas of your business, you’ll set your restaurant up for success.
Here are three great reasons why you should make restaurant forecasting a priority for your business:
1. Forecasting Saves Money
As the old adage goes, a penny saved is a penny earned. By implementing restaurant labor forecasting into your business plan, you can more effectively schedule and hire your workforce in a way that keeps your employees happy and saves you money.
Restaurant labor forecasting is an excellent way to combat rising labor costs that threaten to whittle away at profitability. Finding an advanced, easy-to-use cloud-based platform will help you view hour-to-hour reports that compare sales to labor costs, making it easy to view trends and put an end to excessive staffing expenses. Not only will your team be able to work more effectively, but you’ll also be able to keep more money in your restaurant – where it can do more good for your business.
2. Forecasting Reduces Waste
Ordering inventory for your restaurant can be a risky business. By over-ordering, you waste both food and money—a costly mistake that can become the undoing of an otherwise successful restaurant.
Use restaurant inventory forecasting to combat over-ordering – currently one of the largest sources of waste in the entire food-service industry. The right back-of-house software provider can give users a powerful tool that monitors food waste and spoilage, provides real-time inventory tracking, and reduces manual error when placing orders by eliminating the need for data re-entry.
Worried about underordering? Your inventory platform should offer inventory level alerts so you can know when to place your next order.
3. Forecasting Enables Effective Restaurant Growth
Knowing when to hire more staff, invest in new equipment, or open a second location is essential to successful restaurant growth. A misstep in one of these areas can prove fatal to your business. Thankfully, by implementing restaurant inventory and labor forecasting, you can make these decisions with confidence.
Tracking your average labor vs. sales cost makes gauging when to hire a new manager, cook, or server easier than ever. Then you can use the money saved by monitoring your inventory and minimizing annual waste to invest in new equipment and understand when your restaurant is ready to expand.
In the end, restaurant inventory and labor forecasting allow restauranteurs to stabilize their business, experience improved profitability, and take calculated risks that will pay off down the road. All this forecasting talk may sound like a lot of work that could take time you don’t have, but fortunately the SynergySuite restaurant management platform offers an array of cloud-based tools that will save time and help your restaurant flourish.