Why Sales Forecasting Software is an Essential Part of your Restaurant's Tech Stack

Sales forecasting has always been a pivotal tool for restaurant managers aiming to paint a precise picture of their dining rooms' future. This forecasting is essential not just for understanding potential business growth, but also for optimal labor scheduling, and smart purchasing decisions, to better control costs and maximize profits.

With the advent of AI and machine learning in the restaurant industry, coupled with a vast array of data sources available for analysis (consider variables like weather, holidays, and QR code-driven mobile orders, besides the traditional historical sales data), sales predictions can now achieve up to 95% accuracy.

Machine learning excels at examining an extensive set of data about your restaurant and its local environment, greatly enhancing the guest experience. A significant portion of this data is sourced directly from your in-house systems, underscoring the potency of modern restaurant tech stacks.

Therefore, integrating sales forecasting software within your comprehensive restaurant tech stack becomes indispensable. Especially when aiming to enhance restaurant operations, the seamless data sharing across platforms, which includes delivery services and other integrations, becomes a game-changer in the dining landscape.

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What Is Restaurant Sales Forecasting Software?

Sales forecasting software uses your restaurant’s data combined with local information to predict future demand for many restaurant brands. This helps operators make better decisions, optimize labor schedules, and purchase the optimal amount of food.

Getting accurate forecasts can help reduce labor costs, improve efficiency, reduce food waste, and boost profitability.

The traditional method of forecasting was to use historical sales data to calculate the likely demand on a given day. Calculations made by hand would take the data from previous Friday evenings, for example, and try and work out the likely demand for the next Friday. 

Recently, AI and machine learning have revolutionized the way sales forecasting is done. And the accuracy of predictions. Restaurant sales forecasting software takes into account the same historical sales data, plus other data from reservations systems, the POS, and even social media platforms, as well as local traffic, event, and weather data, which can efficiently improve restaurant operations.

With AI making forecasts with this wealth of data, it’s unsurprising that forecasts are far more accurate and reliable. And sales forecasting software allows you to track forecasts versus what actually happens, so you know exactly how accurate it is.

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How Sales Forecasting Software Integrates with Other Tools

Sales forecasting offers huge benefits to restaurants, but it must be integrated with other systems to gather the data required. Let’s take a look at the essential tools and integrations you need in your tech stack to get the most out of sales forecasting software.

1. Point of sale 

With a POS system integration, your sales forecasting software can pull sales data directly from your POS system. It’s not just raw sales numbers, the POS has data on sales by a number of categories. 

This means the software can be granular with its forecasts. It can not only predict the total sales  during a service but which products or dishes will sell best. This allows for more control over purchasing, leading to less food waste, lower food costs, and more efficient everything.

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2. Labor scheduling

Restaurant sales forecasting software integrates with your labor scheduling tools to share data between the two systems. It allows operators to make a direct comparison between scheduled labor and optimal labor based on your budget. That helps you have the right number of staff on shift, give them schedules further in advance, and keep your team happier in the long run.

You can also use data from your labor management tools to help you figure out your ideal labor cost percentage. This is the measure of how much you spend on labor as a proportion of sales. Keeping this figure in check lets you know that you are keeping your labor costs under control.

Overall, syncing data between your sales forecasting software and labor management tools helps you make better labor scheduling decisions to improve retention and reduce your labor costs. 

3. Inventory management

Inventory data is useful in making forecasts, but if you integrate restaurant sales forecasting with your inventory and purchasing systems, you can also set it up to inform your purchasing decisions. 

It can take in the data needed to tell you your food cost percentage so you can optimize it to reduce food costs and food waste. And it can feed information back to your inventory management system to give you insights into exactly what to purchase and when.

4. Reservations

Reservation data is vital in predicting demand. Not only does it show how many tables have been reserved, but it also contains customer profile details, which can offer insights into online ordering preferences.

Integration with your online reservations system allows you to extract data to refine sales forecasts. By incorporating customer demographic details and insights from the loyalty program, you can better predict which categories will have higher sales.

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5. Reporting 

Sales forecasting software has all the insights you need to make better decisions. You can rely on it as the reporting tool in your tech stack as it takes in more information than any other piece.

In fact, it goes further than most other reporting tools and gives you real-time insights, including: 

• Forecasts up to a month ahead 
• Comparison between forecasts and actual sales in real-time
• Real-time staffing actions to tweak your labor costs during service
• Hour-by-hour forecasts to inform your purchasing decisions

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Make Sales Forecasting Software Part of Your Tech Stack

Sales forecasting is more than just predicting how busy you will be. It impacts every aspect of your business, from using POS data, to informing labor scheduling and purchasing, to giving you the insights you need to make better business decisions.

A system like 5-Out is easy to set up with integrations built-in so that within five minutes the system will be taking in information from your POS and labor tools, not to mention local traffic, weather, and event information. 

See how much 5-Out can inform your decisions and become an integral part of your restaurant technology stack, schedule a demo today.