What is sales forecasting software?
Sales forecasting software reviews the historical data of a business to generate reports of expected sales on the basis of seasonal, local and on-site trends.
5 Best Sales Forecasting Software Solutions for Small Restaurant Businesses
What is Sales Forecasting?
Sales forecasting refers to the practice of estimating the number of goods that an organization could sell in the coming days, weeks, months, or even the coming quarter and the year, and the revenue that is expected to be generated from it.
Sales forecasting draws from critical business intelligence data like current and past sales data as recorded in the point of sale (POS) system, consumer demand patterns, research reports, and even seasonal data. It also weaves in demand planning to predict and be better prepared for both, a sudden spike or a sudden drop in demand, in view of impending events like a big game, year-end festivities, a disease outbreak, or the onset of winter.
An organization must estimate the volume of sales that can be achieved by each unit, whether it is an individual sales representative or a sales team. A sales forecasting software makes the job of an entrepreneur much easier.
How Does Forecasting Software Work?
A sales forecasting software integrated with the POS system provides entrepreneurs with a wealth of data on sales and revenue, labor, customer demand patterns, discounts, customer footfall, the density of ordering through the restaurant's website and third-party apps. Sales data is recorded and inventory is adjusted by the POS system every time a customer completes a purchase. The sales pipeline, which also entails opportunities for sale, is taken into account too.
This data warehouse is then seen through the lens of sales analytics, and business owners are provided with actionable insights in real time, which they can view from anywhere, at any time of the day, using a handheld device, while having a drink with friends or while relaxing on the couch after a hard day's work!
Technology allows business owners to monitor critical business metrics and take decisions on the fly. Sales analytics software provides sales teams a fair degree of visibility into sales activities, helps in performance management of employees, identifies the sales performance of goods, and anticipates future sales numbers. Sales analytics is used to gauge the success of a sales drive and predict the performance of future campaigns.
Restaurant sales data, menu data, and costs of food and packaging may be harnessed with the help of the POS software to identify the products that generate the highest amount of revenue and produce the biggest profits.
Sales forecasting software solutions look at vital historical data to reveal best-selling menu items and also those that hardly have any takers. Likewise, restaurants operating units across multiple locations will be provided data on which units are doing better than others.
This can then be seen in terms of factors like difference in customer tastes from one location to another and the financial wherewithal. These factors also influence the performance of a particular menu item vis-a-vis another.
A sales analytics software is able to provide restaurants with a thorough interpretation of these trends and prepare the business for the future. It will, for example, help the business determine which menu item to retain and which to remove to maximize profits. A similar decision can be taken on restaurant chains or franchise stores with the assistance of POS, sales forecasting, and sales analytics systems.
A sales analytics software will also see how sales are impacted following the launch of a new promotional campaign, for example, and help in forecasting how and to what extent customer purchasing decisions may be influenced by the loyalty program that the restaurant has been running.
Sales forecasting and demand planning look up past trends to let the restaurant owner estimate the exact amount of stocks he/she needs to buy and retain so that the restaurant is always adequately stocked, and at the same time does have a pile of deadstock that may rot on the shelves. It helps in controlling unnecessary expenditure on food and prevents wastage.
Sales forecasting and analytics software solutions significantly reduce the efforts and time that restaurant policymakers have to invest and ensure that the entire restaurant management exercise becomes efficient. Sales forecasting and sales analytics solutions make sure that guesswork, which is often a recipe for disaster, is stamped out.
Trying to forecast sales for a new business is difficult. You need to know how much inventory you will need, how many customers are likely to visit your restaurant, and what the average cost per customer is.
There are several sales forecasting software solutions that can help you manage your inventory and forecast sales accurately. This article rounds up the best in the market.
Essential Features of Forecasting Software
1. Multiple forecasting metrics- The best restaurant sales forecasting solution enables business owners to easily view the most important Key Performance Indicators (KPIs) for their business. Sales predictions are typically developed using historical data and then calibrated to current variables.
However, restaurant owners may choose to use sales data, transaction counts, or customer counts over different time periods to create sales projections. Some users, for example, may want to see current trends using data from the previous four weeks.
Another operator may prefer to look at data from the year before in order to factor in seasonal fluctuations or holidays. The ubiquity of Big Data systems has resulted in machine learning tools and predictive analytics becoming more and more accessible.
2. Integration across systems- Many restaurants still utilize spreadsheets to anticipate sales, which can lead to errors. These mistakes can dent the bottomline.
However, this can be reduced if the software solution used by the restaurant is able to integrate sales predictions across several systems. To develop an accurate sales estimate, an integrated software interprets information from labor schedules, inventory and ordering, production systems, and so on.
The right software also lets restaurant owners make real time modifications for keeping the restaurant properly supplied and staffed. Sophisticated forecasting software that melds with production systems can handle granular data like product shelf life, thaw times, and hold durations.
3. Back-office automation- The menu data of a restaurant should be connected to a forecasting system, which will recommend a purchase order automatically by reading the menu data, while taking into account the prediction and inventory available at the moment.
A restaurant should seek a forecasting system that works in alliance with the labor scheduling software to break down estimated sales and customer numbers by day, and hour. This allows restaurant managers to better coordinate employee schedules to meet predicted demand.
To avoid food shortages or wastage, a restaurant should make use of forecasting tools that connect with the inventory management software to devise production schedules for the day, week, and hour. With back-office functions like ordering, inventory management, employee scheduling, etc. being automated, forecasting tools ensure that there is an 'employee' who is always awake and working!
4. Real time and detailed specifications- Forecasting tools vary in terms of how detailed a projection might be. Some software can anticipate sales on a daily, weekly, or monthly basis while even more sophisticated platforms can forecast sales on an hourly basis or even in 15- or 30-minute intervals. In situations, for instance, where customers arrives in large groups at a restaurant that usually sees a big rush at lunchtime, incremental predictions are extremely useful.
Advanced forecasting software can handle data as specific as product shelf life, hold times, and thaw times, and consequently, just-in-time menu production becomes possible, resulting in wastage being minimized, while still meeting predicted demand.
What Can Sales Forecasting Software do For a Business?
1. Efficient inventory planning- Accurate sales forecasts and demand forecasts allow a restaurant to optimize its inventory and manage its supply chain better by minimizing over-purchasing and oversupply of stocks. They also ensure that there are sufficient stocks to serve customer demands at all times.
Forecast accuracy makes sure that there is not much variance between the anticipated and actual usage of stocks, and only that amount is purchased and stocked that has a high probability of being used up without much delay.
2. Better workforce planning- Businesses may efficiently plan their staffing by predicting the appropriate level of demand. Productivity will rise if only the exact number of employees required per shift are hired and scheduled.
For example, if a restaurant expects a surge in demand and sales during a specific time of the day, like during dinner, it can make arrangements for more servers, compared to estimated lean periods, like before dinner when guests usually order nothing more than pre-dinner drinks.
Similar arrangements can be made while factoring high-attendance/viewership events, festivals, holidays, or weather. Employees may be cross-trained to handle lean periods. This way, overstaffing can be avoided, and labor costs can be driven down. Additionally, understaffing can also be avoided, and restaurant revenues protected.
3. More prudent decisions- Sales, demand, and revenue forecasting solutions involve predictive analytics to inform business decisions. Trend Analysis lets restaurant owners take important calls on scheduling/hiring a greater or lesser number of employees, expanding/discontinuing menu items, adjusting prices of menu items, expanding the supplier network, fine-tuning customer loyalty, and reward programs, or running physical stores or moving business online.
4. Plan budgets carefully- This essentially involves two things- cost minimization and profit maximization. Proper demand and sales forecasting and a consideration of the restaurant's sales pipeline help an entrepreneur take the right steps to reduce food and labor costs, and latch on to suppliers that deliver the biggest advantages at a reasonable cost.
Forecast data is used by businesses to plan their budgets carefully. Forecasting tools provide businesses a peek into what the revenue and profit margins could look like after a point. This profit and revenue forecasting influences decisions on related issues like staff scheduling, hiring, store expansion and renovation, supply chain management, and so on. It also helps businesses prepare for both 'sunny' and 'rainy' days.
5. Woo investors- In order to pitch your restaurant successfully to investors, you have to have a clear sales goal and a sales forecast at least for three years. An investor may also want to look at the sales pipeline. If the demand and sales forecast is ambitious, and if the sales pipeline strongly justifies the forecast, there will be every chance that the investor will be willing to put his/her money into your business.
5 Best Sales Forecasting Software for Restaurants
1. Zip Forecasting- This cloud-based sales forecasting and demand planning solution can be downloaded from the Hubworks app store. It is possible to link this automated software solution seamlessly with a POS system like Plum POS, which is also available on Hubworks.
Zip Forecasting allows businesses to generate extremely accurate sales projections with just a few clicks. This software allows users to view, analyze, and comprehend data in real time, from any location, using any device.
Users can use Zip Forecasting to monitor and analyze data on a daily basis, as well as estimate sales in intervals of 15 minutes, 30 minutes, and 60 minutes. Users can choose the time period over which these projections should be made.
2. Pipedrive- It depicts the sales pipeline of an organization so that bottlenecks can be identified. It enables organizations to pinpoint the areas that require improvement so that efficiency and profitability can be maximized. Pipedrive's live staff dashboard shows performance and transaction indicators in real time. Business owners are able to track the progress towards their objectives with precise insights produced by Pipedrive.
3. Zoho CRM- This is a 360-degree tool for sales teams to effectively manage the customer relationship lifecycle. Apart from sales forecasting, Zoho CRM's top features include pipeline management, contact management, automation of workflow, marketing management, inventory management, task management, business reporting, and analytics. It also works hand-in-hand with over 500 business apps on a single platform, and also comes with an AI assistant.
4. Workday Adaptive Planning- It allows entrepreneurs to easily submit and aggregate sales forecast data across sales teams, smoothly connect sales forecast information with funnel metrics and pipeline analytics, get a clearer view of forecast accuracy, and monitor variance from week to week.
This software solution also lets business owners predict demand across locations. Workday Adaptive Planning allows entrepreneurs to quickly visualize sales performance, build a narrative, and make better decisions. It lets them probe the impact of revisions in hiring on the business plan in real time.
5. SlickPie- Small businesses looking for a feature-rich accounting software solution can look at SlickPie. It amalgamates sales forecasting with conventional accounting systems to create an optimized software platform. Slickpie works without hassles with the existing business software to look at data and produce meaningful and easy-to-understand insights.
With so many software providers to choose from, how do you know which to go with?
This article gives you a selection of the top 5 solutions for small restaurant businesses to help narrow down your list.
Forecasting Software Pricing
The price of sales forecasting solutions varies from one software provider to another. Small businesses or start-ups will look at platforms that are cost-effective and provide a host of benefits.
Zip Forecasting, which is by far the best forecasting tool available in the market, is priced at an affordable monthly per location rate of $19. What it offers at that price makes it even more attractive. It comes with POS integration, visualization of POS data, forecast reports on a weekly basis, sales forecasts based on intervals, and a work matrix, apart from the usual sales forecasting.
It integrates well with other Hubworks products like Plum POS, Zip Ordering, Zip Reporting, Zip Inventory to boost the forecasting exercise even further. It offers free customer support across multiple locations.
Small businesses may also look at several free options. A number of software solutions like Zoho CRM, Freshsales, Insightly, monday.com, Qlik Sense, Apollo, and Tubular have free versions. Some of the sales forecasting software solutions and their starting prices are provided here-
1. Zoho CRM- $20 per user per month.
2. Tubular- $9 per user per month.
3. Salesflare- $29 per user per month.
4. QlikSense- $30 per user per month.
5. Insightly- $29 per feature per month.
6. monday.com- $10 per user per month.
7. Pipedrive- $12.50 per user per month.
A software solution may have higher tiers of subscription as well. Those will have a bigger bouquet of features and are more expensive.
Sale Forecasting FAQs
1. What elements can have an impact on sales forecasting?
Forecasting accuracy can be affected by a number of variables. Some such factors include expenditure on marketing campaigns, economic circumstances, allocation of budget, consumer satisfaction, political scenario, and even weather conditions.
2. How can my sales forecast accuracy be increased?
Data and time are two of the most important aspects that determine forecasts. You will stand to benefit if you know how to estimate sales on the basis of historical data. You need to start by making a list of all the elements that could affect your sales. Sales forecasting strategies based on statistics can also be quite useful.
3. What are the factors that can influence a forecasting model's accuracy?
A variety of things can have an impact on sales forecasting accuracy. Seasonal variations, growth of the business, and regulatory changes are among the most prevalent factors, but changes in accounting, as well as new competitors entering the market or existing ones moving out, can have a considerable effect. Sales forecasting is a science, and no business can do without it if it has to keep its operations smooth or wants to expand.
4. Do I need to revisit and revise my restaurant forecasting?
A business owner shouldn't rest on their oars simply because they've made an accurate sales forecast. There could still be a lot left to do. Since the restaurant industry is an ever-evolving one, it is critical to keep sales and demand projections up to date. A business needs to revisit the projections on a regular basis and take new data points into account so that a clear image of expected sales, demand and profits can be maintained.
Forecasting software is a key ingredient for successful businesses. It takes the guesswork out of sales forecasting, so you can stay ahead of the competition.
This article helps you find the software you need to scale up.