What Do Restaurants Need in a Forecasting Solution?

As operators deal with the increasingly costly and complicated labor market, new strategies are being defined to maintain profit margins. There’s a lot of talk about kiosks as a form of customer service automation. In fact, some of the largest QSR chains are devoting significant budget to their FOH automation strategies.

Studies show that independents are facing labor costs of up to 40%, while Cheesecake Factory recently reported a 4% increase over the last five years. When you take those numbers into consideration, it’s no wonder the industry is looking to technology to stop the bleeding.

When it comes to back-office automation, forecasting is the most powerful tool in a manager’s arsenal. The right sales forecasting solution helps you control labor costs and achieve scheduling efficiency.

Unfortunately, not all restaurant managers forecast. There are a number of reasons for this:

• Managers don’t trust the forecasting solution
• They’d rather go with their intuition
• Operational consistency is a challenge
• They haven’t been trained properly

What Do Managers Want in a Forecasting Solution?

Manager adoption of a forecasting tool is everything. You want them to be enthusiastic about the solution and know that it will help improve both their jobs and the overall operation. This begs the question — what do managers want in a forecasting solution?

1. Transparency and Context: A “black box” forecasting solution that does not provide the manager with insight into how the forecast is generated hurts both adoption and trust. Managers need access to the right information so that they can be empowered to make the best planning decisions.
2. Feedback Loop for Evaluation and Learning: Managers want to know how they performed. With hindsight reporting on the forecast’s performance, managers can see what worked and where they need to improve, and work with above store leadership to make tweaks to the methodology going forward. These coaching opportunities also bolster job skills for in-store managers.

No great schedule can be built or an accurate food order placed without a great forecast and labor forecasting starts an accurate sales, guest count and transaction forecast. There’s another level of complexity in designing the right labor model for your business that will make it seamless for the manager and ultimately allow him or her to schedule to meet the needs of the business.

Advanced labor forecasting technology like HotSchedules’ Activity Based Forecasting (ABF) aligns your labor with your customer flow so you can optimize your labor costs. These solutions pull in all of your restaurant’s historical data and apply an agreed upon set of business rules to automatically generate shifts that optimize your costs and your people. The result is a labor blueprint that your managers can follow and, most importantly, trust.

Test your Forecasting Assumptions

Administrators also need the ability to test new business rules and see the impact on labor allocation without assigning them to a store. Solutions like HotSchedules ABF allow you to model new rules on different stores (pick a high and low performing store) with up to 5 weeks of actual sales data and see how close the new rules get to your labor target.  There’s no need for a test store or lab site and most importantly, no confusion for your managers since you can preview the results, view a comparison against the previous set and run multiple tests and before committing to the new rules.

The right forecasting solution can help above-store leaders create consistency by generating belief and trust in the suggested forecast. That’s a powerful component of operating an efficient business.