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How to Determine the Projected Sales for Your Restaurant

How you determine the projected sales for your restaurant will play a large role in determining whether or not your business will be successful and whether or not you will be able to attract investors. Since sales will play the starring role in your restaurant, you will need to create a formula whereby you can show investors, or the bank, exactly how your business will succeed and be profitable. But since there is no set formula to project first year sales for a restaurant, you will have to do some educated guesswork to determine what type of sales you can expect.

How to Determine the Projected Sales for Your Restaurant

How many customers can you seat?

First, you will need to know the number of tables and seats your restaurant will have and the number of customers that can be comfortably seated at any given time. Once you have this number, then you can work your way to a realistic assumption of how many of those seats will be filled at any particular meal.

You will also need to take into consideration how many times those tables can be turned over during a shift, and then calculate your totals accordingly. Whereas a casual dining establishment may see a turnover of three to four tables per meal, a fine dining establishment will probably only see one or two turnovers per meal. This can be further broken down into the types of meals: breakfast may have a higher turnover than lunch or dinner, and so on. You will then need to multiply the number of seats times the turnover rate for each meal to reach a grand total.

How many customers will you serve?

Here comes the tricky part. How can you estimate the number of customers to expect even before you open your doors? Well, there are several methods of doing so. One way is to simply take an average of the seats you have, times the table turnover rate for the meal being served, to create a reasonable estimate based on that average number. This can be a starting point. This may be easier to do if you have a lot of prior restaurant experience and if you know your location well.

If you have more time and energy, you can get out there and see what the volume of traffic is in your location, perhaps by visiting or spying on your competitors. Seeing what their volume is by actually visiting them, can give you a good estimate to how many people they serve. You can then use these numbers to create estimates for your own establishment.

How much will your customers spend?

As part of your formula for projected sales, you will need to estimate the average amount that a customer will spend on a meal in your restaurant. This value can best be determined by looking at your menu prices and choosing the mid-priced meals to obtain an average. Since some people will spend more on a meal, and some less, a middle of the road approach is usually the safest to obtain this estimate. The estimate will also need to account for the price differences in your breakfast menu, lunch menu and dinner menu. Since the amount that customers spend on each of these meals differs, you would be best off determining a different estimate for each meal and then finding the average.

How should you make the first year estimation?

From the data you have gathered, the simplest way to make the estimation for your first year of sales would be to multiply the numbers you estimated in the above sections, by the 52 weeks of the year. But since you will have slower weeks and busier weeks, seasonal changes in sales and other extraneous factors, your first estimate will probably be too high. While your initial estimation for projected sales may need to be high to get the loan or attract investors, you will still want to keep it reasonable.

Once you have opened your doors, you will need to play with these numbers and reevaluate your original estimates to see if they were reasonable. It will work in your favor to be realistic about what to expect in sales to help you prepare for the year ahead

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