Sales Forecast Template- What it is, What it Can do & do You Really Need One?
What is a Sales Forecast?
Sales forecasting is the process of determining the quantity of a good or service that a business will sell in a given period. It is a vital part of the sales cycle, and without it, most businesses would fail before they even got started.
Sales forecasting takes into consideration a business's products, its target market segment, its sales channels, seasonality, and other factors, to determine the most likely quantity of sales it can expect in the coming period. Forecasting is an important aspect of the sales process. When a business plans its sales efforts, it needs to know whether it can produce a sufficient number of sales to turn a profit.
In a restaurant business, the sales forecast is a tool that helps managers plan for the team and set realistic sales goals throughout the year. It helps estimate key metrics like future sales, guest traffic, and menu management as per economic trends, past sales data, and market checks.
The sales forecast is an essential part of any restaurant manager's job and it is vital for any restaurant that's looking to grow its business. Sales Forecasts become even more important as a company scales up.
Why is Sales Forecast Important?
A sales forecast is important because it helps a company plan its sales activities and allocate its resources. Once a company has a sales forecast, it can plan how to achieve its sales targets. Sales forecasting predicts how much revenue an organization, a team, or a person makes at a specific period. It can be a week, a month. quarter, or a year. When you forecast sales, it helps the company's management plan and run its day-to-day operations effectively.
In a restaurant, a sales forecast helps owners understand when is a good time to open a new location, what inventory to order, and the number of employees to be scheduled for a shift. Inaccurate sales forecasting may end up in wasted money on inventory, labor, and other operating costs.
Forecasting your sales is about understanding your sales pipeline and understanding how your sales process works. The process of forecasting can be broken down into two key phases- the demand phase and the supply phase. The demand phase involves understanding your customers and their needs, which is the sales forecasting you need to look into. Once you know what your customers want, you need to understand your sales pipeline and how that changes over time. Your sales pipeline is the series of steps you take to make a new sale, and understanding this involves a detailed analysis of your sales process.
Why Sales Forecasting Matters:
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How to Create a Sales Forecast Template
A sales forecast template is an Excel spreadsheet that allows managers to compare and analyze multiple products and services by providing monthly units sold, the price of each unit, and the cost of goods sold. When you add these metrics to an Excel sheet, it calculates the growth rate, total revenue, margin per unit, and gross profit.
When it comes to creating a sales forecast template for a restaurant, you have to include the number of dishes sold, the price of each dish, and the total cost of food sold in the restaurant. An Excel sales forecast template is suitable for small businesses and eateries since they need to manage only a small volume of sales data. But when it comes to large restaurant chains, it's good to opt for a hardier sales forecasting software like Zip Forecastingavailable on Hubworks, a specialty app store for restaurants.
A restaurant owner makes use of sales forecasts to produce maximum sales and keep costs in check. An accurate sales forecast helps restaurant owners make sure they have enough inventory and employees to serve everyone and, in turn, boost sales. It uses a restaurant sales dashboard template to break down forecasted sales and visualize them with charts and graphs. A spreadsheet template is also used to break down your menu by item and run individual forecasts for each dish.
Template Tips: Before creating a sales forecast template you must-
1. Estimate the restaurant's monthly unit sales
The first step is to make a list of how many units you plan to sell each month. Make sure to specify the number of units of each menu item that you believe will generate sales.
2. Make future predictions for new menu items
As a restaurant manager, you should be able to make calculated predictions based on your previous restaurant experience or by researching competing eateries in the area.
3. Keep a track of outside factors
Various outside factors play a role in the restaurant industry. For example, if you own a restaurant near a college or school, sales will reduce over the summer vacation. If your restaurant is located on a busy street, holidays will be busier than other days.
4. Project dish prices
You can project the future price of menu items by multiplying a dish's current price by the number of plates sold. This calculation can be repeated for each dish on the menu. You may find the total revenue by adding all of these numbers together.
Downside of Using a Sales Forecast Template
Some small businesses still use spreadsheets to create their sales forecast templates and to work out their budgets and financial reports. However, using a spreadsheet to build a sales forecast template has its drawbacks.
Time is valuable, especially when you're handling multiple outlets and need to maximize sales through the year. A restaurant manager spends more than 12 hours per month correcting and modifying spreadsheets, according to data. In some cases, forecasting can consume up to 20% of an employee's working week on non-revenue generating activities.
2. Prevents collaboration
Spreadsheets are disconnected, comparmentalizing information into silos. Spreadsheets allow limited collaboration, making it difficult for restaurant managers and sales teams to communicate effectively.
3. Multi-user editing
A spreadsheet in Excel can be edited by multiple individuals. The Sales Forecasting Technique becomes more complicated when two different users change the template sheet and reconcile it with different facts.
Why Forecasting Software Scores Over Spreadsheets
You may have observed that a particular week of the previous year was particularly active when reviewing your sales data. Was it the result of a local festival or the weather? When you have this kind of knowledge, you can plan ahead for increased sales in the coming year. While it is possible to create sales forecasts manually, sales forecasting software will provide you with better analytics and more accurate and consistent predictions.
Algorithms are used by sales forecasting software to produce forecasts. The software generates automatic sales forecasts based on the restaurant's historical data, which saves managers a great deal of time.
Sales forecasting software analyzes historical POS sales data from your restaurant's POS system to provide you with facts on previous sales. It is easier for restaurant managers to make appropriate decisions and spot patterns when they have precise data. This is not possible when using the spreadsheet method because the spreadsheet cannot be integrated with the POS system.
The data is more detailed with sales forecasting software. It provides daily, weekly, hourly, and monthly sales figures. For example, during the summer, customers are more likely to visit the restaurant in the evenings, as indicated by the software. This helps managers make future decisions regarding menu and inventory. A manual spreadsheet can provide day-to-day sales information, but the technique is inefficient and prone to errors.
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Top 3 Forecasting Software for Restaurants
Zip Forecasting is a cloud-based sales forecasting software that allows restaurant managers to make sales projections, and track sales data from the past and daily sales. It also helps users identify business problems and forecasts future trends. It integrates with the restaurant's point-of-sale system to extract sales and transactional data to offer better insights and on-point sales forecasts.
This software takes note of expected weather changes and prompts you to account for it in your staffing and inventory plans. Zip Forecasting will correctly recommend the number of staff you need for any given shift, making sure you always have the right number of cashiers, waiters, and chefs on hand. This eliminates the problems that arise from understaffing or overstaffing, and helps you control your labor costs.
a4ERestaurants is a sales forecasting software that helps restaurant managers make accurate sales forecasts by studying historical sales data. Its weather-sensitive capabilities inform a business of how the weather may affect sales. It also keeps track of other factors such as holidays, calamities, and other events to properly forecast future sales.
Tenzo is a sales forecasting software that centralizes all sales and transaction data from your POS and employee management system. It also tracks weather and events at each restaurant location to provide precise sales forecasting data. Tenzo uses machine learning to forecast future sales. This software solution has an intuitive dashboard that consolidates all notifications in one place. Managers receive reports via email and app alerts.
Sales Forecast FAQs
Q. What is a sales cycle?
A. A sales cycle is a step-by-step procedure that begins with the initial customer interaction and ends with the closing of the deal and subsequent follow-ups. It is a customer's journey from the moment they realize they require a product, to the moment they complete the purchase.
Q. What is a sales projection?
A. A sales projection is the total revenue that a company anticipates in the future. It's a prediction that's similar to a sales forecast. The health of a company is regulated by sales projections and sales forecasts.