What are the biggest line items in your budget as a restaurant manager? Odds are inventory and labor rank at the top. The challenge of course, as you well know, is how to make sure that the amount of money spent on these costs is low enough that you can still turn a healthy profit.
The best way to do this successfully is to budget carefully and to spend time studying historical data so that you can predict future trends. This type of forecasting can make the difference between being in the red or in the black at many restaurants.
To accurately predict demand, you need to spend time studying a variety of factors and optimizing around them. Here are the four key factors you should be keeping an eye on in order to successfully forecast your labor needs:
1. Time of Year
Historical data should help you to figure out which times of year are busiest for you and which are slowest. You should track foot traffic, sales, and service personnel each day in order to detect patterns that shift from season to season. If you’re in a tourist hot-spot or near seasonal entertainment - like a ski slope - your business will definitely vary throughout the year.. Clearly, for most businesses, fluctuations in foot traffic are not that obvious, , but tracking data can help you begin to make reasonable forecasts based on the time of year.
Another predictable factor that you should keep an eye on is holidays. As we’ve discussed before, it can be very difficult to guess whether a given holiday will turn your restaurant into a madhouse or a ghost town.
To avoid the guesswork, track business on holidays as well as the days leading up to and following holidays. In some cases, the days after a holiday are a popular time to head to restaurants—people have had enough of cooking or eating leftovers and are looking for something new. Other times, folks skip town for the holiday to visit relatives, leaving your restaurant without a lot of patrons.
One less predictable factor is the weather.
You might wonder how you’d be able to use the weather to figure out how to staff, given that it often changes on a daily or even hourly basis. The good news is, you can track trends over time.
For example, if your data shows that people are more likely to visit your restaurant on sunny days, you can staff up when that type of weather is in the forecast. If your data indicates that snowy weather means low traffic, you can use that information to staff down.
Make sure you use a digital reporting tool like Squadle to keep track of how your business fluctuates along with the weather, and then you’ll be able to make reasonable guesses as to when you need more employees on hand.
4. Sports and Other Local Events
Another factor that can contribute to a boom or bust in restaurant patronage is sports games.
Restaurants that are situated near arenas, stadiums or ballparks—or ones that offer game-day specials or widescreen TVs to watch on—often see a big uptick on game day. On the other hand, if your restaurant is more of a quiet brunch spot, you may see fewer people come through the doors the Sunday of a big football game.
In addition to sports, there are often many types of local events, ranging from fairs to concerts to parades that can have an impact on your business. Regardless of which direction they drive your business, it’s good to track these types of events and be as prepared as possible.
These are just a few examples of the types of conditions that you may want to begin tracking in order to more successfully forecast your labor needs. Once you have this information in-hand, you can use it to determine whether you need to increase your labor on a given day. It’s not enough to simply assume that July will be a busy month and January a slow one. You should dive deep into the data to observe the other patterns that can make a difference in your planning and help you balance costs with income.