The next step in creating our example restaurant business plan financials is doing the sales projections.
The sales projections are critical because they are the basis for everything else we are doing- all of the expenses and any potential for profit and paying off the loan or investors is going to be based on having enough sales.
Now, that doesn’t mean just keep moving the sales up until you’ve got enough! Your sales projections have to be conservative and underestimate what will really happen if anything.
The best way to do this is to visit and observe similar sized and priced operations in the same area where you expect to open your restaurant. See how many people come in, how many people are at each table, how often during a lunch or dinner shift the tables are filled, fed, cleaned and refilled with customers. How many tables never get even one seating? How much food are the customers ordering and what is the average bill?
These are the numbers you will need for your estimates and the closer you can get to what it really is going to be the better your numbers will help you get started.
This is our financials tool sales estimation page:
The first thing you start with is the period of time you will estimate for. I always find that doing just one day at a time is easiest and requires less math but some people like to do it by the week or even the month so the option is there.
Next fill in how many tables you have during each serving period (some places rearrange this so the number changes- most don’t).
Then estimate the table turns, check size and number of diners for each period. Do your estimates based on what you think a “good” day will be- not the best day ever but a reasonably busy day and time.
This will give you a total for each period and a total for the day for your tables.
In the next section, add in the information that applies for the other sales operations of the restaurant:
At the completion of this sheet you will have a sales estimate total for the day including all your sales opportunities. Compare this number with what you think your similar sized, similar priced, similar location competition is doing. Are you about even? Good.
Are you blowing them out of the water? You might, but that is not the way to estimate it right now. Be conservative in your projections in order to maximize your chances of getting funded. Unrealistic numbers make you look like an inexperienced amateur and that hurts you chances of getting the money to open your restaurant.
Remember, you can always come back and play with these numbers later but you need a starting point to complete the rest of the projections so don’t stress about this too much right now (or later, really). Just make your best guesses on what the numbers will be and save the file.
In the next section we will add in more revenue from sales of things besides food and drinks, if you have anything that might fall into that category.