Understanding Restaurant Forecasting and How to Use It to Drive Profit

Running your restaurant at peak efficiency would be a whole lot easier if you knew in advance when your busiest shifts would be, which dishes customers were going to order, and how much staff and inventory you’d need to keep everything running smoothly. Thankfully, restaurant forecasting provides that level of insight by using data to anticipate what’s ahead and helping you stay proactive rather than reactive.

Forecasting future sales, labor needs, and expenses helps you plan smarter, spend more strategically, and operate with confidence. It connects the dots between your numbers and your daily decisions so you can control the trifecta of profitability: keeping costs low, meeting demand, and maximizing the guest experience. In this guide, you’ll learn exactly what restaurant forecasting is, the main types of forecasting every operator should know, and how to start building accurate forecasts using simple, practical techniques.

Types of Restaurant Forecasting (and When to Use Them)

Forecasting can be divided into key areas of your operation: sales, labor, inventory, demand, and finances. Together, these elements create a complete picture of how your business is performing and where it’s headed. Here’s a breakdown of the main types and when to use each one.

• Sales forecasting: Use sales forecasting to predict future revenue based on past performance, customer trends, and known events.
• Labor forecasting: Review labor forecasts to estimate how many staff members you’ll need to meet customer demand while keeping labor costs in check.
• Inventory forecasting: Calculate your inventory forecasting to compile accurate weekly orders without over-ordering, wasting perishable items, or running out of stock.
• Demand forecasting: Examine demand forecasts around major holidays, marketing pushes, or special local events to go beyond your standard sales forecasts and more accurately anticipate customer traffic and menu item popularity.
• Financial forecasting: Evaluate financial forecasting to compare long-term revenue, expenses, and profit margins to guide strategic planning and make sound decisions about how and when to invest in your restaurant.
• Seasonal and trend-based forecasting: Trend-based forecasting can help you identify the cyclical business fluctuations that impact performance year after year and help you align your marketing, labor, and menu calendars around recurring patterns.

Why Restaurant Forecasting Matters

Strong forecasting turns guesswork into strategy. It helps restaurant owners anticipate the core business elements, such as demand, labor, and inventory, and make proactive decisions that protect profit margins and improve guest satisfaction. Here’s how accurate forecasting strengthens every part of your operation.

Improve Profit Margins

Forecasting helps you predict sales volume and align your pricing, promotional spend, and purchasing decisions accordingly. When forecasts inform your strategy, even small operational adjustments can help you capture more revenue from every shift.

Control Food and Labor Costs

Predicting sales and traffic allows you to order the right quantities and schedule staff efficiently, reducing waste and avoiding costly overtime. When your expenses move in sync with demand, you gain tighter cost control and protect your margins from unexpected fluctuations.

Schedule the Right Staff at the Right Times

Forecasting helps you anticipate when business will peak and when it will slow down. With that insight, you can staff busy shifts appropriately, avoid idle labor during slower hours, and maintain great service without overspending.

Deliver Better Customer Experiences

When your team and inventory are aligned with demand, your guests receive faster service, experience shorter wait times, and enjoy better food quality. Proper forecasting helps you support your front- and back-of-house teams well so they can provide the best service for your customers.

Plan Smarter for the Future

Beyond day-to-day operations, forecasting empowers long-term strategic planning. By tracking trends over months or years, you can plan expansions, adjust menus, and set more accurate financial targets with confidence.

What Influences Your Forecasts?

Accurate forecasts based solely on your restaurant’s historical trends will only get you so far. To stay ahead while maintaining precision, your forecasting must also account for external variables that can influence your sales and traffic. Here are the key influences to monitor and plan for:

• Local events and holidays: A downtown festival might drive a sudden weekend rush, while a local parade could block access to your parking lot. Connect with community leaders to stay informed on local events and adjust staffing, inventory, and prep schedules to match expected changes in demand.
• Weather conditions: A rainy day might slow down patio service but boost delivery orders, while a heatwave could spike beverage sales. Track forecasts weekly and have flexible plans in place for both indoor and outdoor service shifts and relevant inventory ordering.
• Economic changes: Tax refunds might encourage more families to dine out, while local job losses might push customers toward value meals or eating more at home. Monitor these trends and adapt menus, pricing, or portion sizes to protect your margins without sacrificing quality.
• Customer behavior and trends: Increased interest in plant-based meals can improve demand for vegan dishes, while trends toward delivery services could increase off-peak ordering and the need for “to-go” packaging. Analyze customer patterns regularly and fine-tune your offerings to match real demand.
• Competitor activity: A neighboring restaurant’s new brunch menu might pull away weekend customers, while a competitor’s closure or poor reviews could send new business your way. Keep tabs on the local market and respond strategically, such as launching limited-time offers or spotlighting unique menu items.
• Seasonal patterns: A coastal seafood spot might boom in the summer and dip in the winter, while ski-town cafés experience the reverse. Identify your own seasonal cycles using past sales data and plan ahead for slow periods by adjusting key operational targets for labor and food cost.
• Marketing promotions: Offering half-price appetizers on Thursdays could boost traffic, but a promotion that isn’t as good as your competitor’s could fall flat and lead to wasted advertising dollars. Use your marketing calendar to align forecasts with upcoming promotions and ensure you’re staffed and stocked for success.

Forecasting vs. Budgeting: What’s the Difference?

Although the terms forecasting and budgeting are often used interchangeably, they actually serve very different purposes. Understanding how they differ (and how they complement one another) helps you build a more complete financial picture of your restaurant operations.

Forecasting is the process of predicting future performance based on current and historical data. It is flexible and should be updated regularly as conditions change (kind of like a weather report for your business).

Budgeting, on the other hand, is a financial plan that outlines your goals for a set period (typically a month or quarter). It is more static and serves as a financial roadmap to measure actual performance against expectations.

In short, budgeting defines your financial goals, while forecasting tells you how close you are to reaching them.

Common Forecasting Methods and Techniques

As you begin building your forecasting process, you’ll encounter several different methods, but the best approach is one that fits your data, goals, and stage of growth. Below are several techniques for turning your available restaurant data into clear insights for smarter decision-making.

Using Historical Sales Data

If you are an established restaurant with several months or years’ worth of reliable sales data, you can leverage that performance history to forecast your future outcomes. Look for repeating patterns, and remember to account for any seasonal variations or other factors that can impact your previous performance.

Simple Average Method

If your restaurant has fairly consistent sales from week to week, the simple average method is an easy way to project future revenue, even if you don’t have extensive historical records. Start by calculating the average of your past sales by week over a given period, but be mindful that this process may overlook sudden changes in demand or seasonal patterns.

Weighted Average Method

If your business has undergone recent changes, the weighted average method gives more importance to recent data so your forecasts reflect the most up-to-date trends. This approach helps keep your projections up to date, but it also requires a careful selection of the weighting criteria to avoid overemphasizing short-term sales spikes.

Using Trends and Patterns

If you’d rather look beyond simple averages, a deeper analysis of the trends and patterns in your restaurant can help spot long-term shifts, such as gradual growth or recurring slow periods. This method is ideal for operators seeking to plan for the long-term (think years, not months), but you’ll need extensive data to get an accurate forecast.

Planning for Different Scenarios

If your market is unpredictable or your restaurant is constantly impacted by external variables, such as the weather or economy, scenario planning can be a more effective way to forecast. This helps you prepare for a variety of scenarios by modeling out best-, worst-, and middle-case forecasts, but build in some extra time for flexibility and frequent review so you can make the necessary adjustments as your exact financial picture comes into focus.

How to Forecast Restaurant Sales

To forecast effectively, you need to start with a solid sales forecast that accurately represents the expected business coming into your restaurant. That forecast will inform how you staff, stock, and spend, so inaccuracies here can have a trickle-down effect to other areas of your operation.

If You Have Past Sales Data

When you have historical data that accurately represents your business sales patterns, here’s how you can use that data to build a comprehensive sales forecast:

1. Gather your data: Collect at least 6–12 months of sales figures, ideally broken down by day, week, and month.
2. Identify patterns: Look for recurring trends such as weekend spikes, weekday dips, or seasonal highs and lows.
3. Calculate your averages: Find your average daily or weekly sales over time to establish a baseline.
4. Adjust for known factors: Account for upcoming holidays, promotions, or events that might influence sales.
5. Apply a growth or decline rate (optional): If your sales are trending up (or down), apply a percentage change to project future performance.
6. Validate against recent data: Compare your forecast with the most current few weeks to ensure it aligns with your restaurant’s current trajectory.

If You’re Just Starting Out

If you don’t yet have sales history, you can still forecast by using industry benchmarks and logical estimates. Here’s how you can generate a forecast without historical sales figures:

1. Research comparable restaurants: Use data from similar concepts, sizes, and locations to estimate average sales data by period.
2. Estimate sales with seat turnover: Multiply your total seats by the average number of turns per meal period and check size. For example, if your average check size is $24.38 and you typically turn over your seats 3 times during the lunch rush with a dining room of 75 seats, you could reasonably estimate your lunch revenue to be 75 x 3 x38 = $5,485.50.
3. Smooth your revenue predictions: Compare your estimated sales from similar restaurants with your seat-turnover projections, then adjust for factors like how long you’ve been open, your pricing strategy, and your service style. This helps balance optimism with realism and produces a more accurate forecast, even without historical data as a foundation for your estimates.
4. Track actuals from day one: The sooner you capture real numbers, the faster your forecasts will evolve from estimates into accurate, data-driven insights.

How Often Should You Update Your Forecasts?

Once your forecasts are built, review them at least weekly to set expectations with your management team, make adjustments to staffing and purchasing, and search for any emerging shifts in customer behavior. During high-variability periods (like holidays or promotions), try to review daily (or even by shift) if possible. Consistent updates help you catch problems early and make quicker adjustments that help maximize profitability.

6 Common Forecasting Mistakes to Avoid

Forecasting is a skill that improves with practice, but even experienced operators can make mistakes that throw off their numbers. Keep your projections accurate by steering clear of these common pitfalls.

1. Relying only on instinct: Basing forecasts on gut feelings instead of data often leads to overstaffing, over-ordering, or missed sales opportunities.
2. Ignoring outside factors: Failing to consider events, weather, or local trends can cause major gaps between expected and actual results.
3. Using outdated or incomplete data: Inaccurate or missing sales records undermine the quality of your forecast.
4. Making the process too complex: Overly detailed models are prone to miscalculation and error, but simple, consistent forecasting methods are easier to manage and just as effective.
5. Failing to update regularly: Forecasts should evolve with your business, so review them weekly or monthly to stay aligned with current performance trends.
6. Skipping available technology: Relying on spreadsheets alone increases errors, so consider using modern back-office tools to automate calculations and improve accuracy instantly.

Turn Insight Into Action With Back Office

Forecasting gives restaurant operators the clarity to plan ahead instead of reacting in the moment. When you understand your data and use it to predict sales, staffing, and inventory needs, you can control costs, optimize labor, and deliver better guest experiences that drive your business forward.

Back Office makes this process easier by automating the most important forecasting steps, from collecting your data to developing the actual forecast. Our tools help you visualize trends and update projections in real time so you can make smarter, faster decisions without spending hours buried in spreadsheets. Start forecasting with Back Office today and build an insight-driven operation that thrives in any market.