There are a number of factors that are in play when it comes to budgeting, and the better that you know your market, the more accurately you will be able to build out a working budget. One of the main factors that needs to be looked at is the geographical area you are in. For this exercise, we are going to use the Atlanta area as our point of reference (mostly because I live there, and it covers a large number of demographics). Atlanta, like most large metropolitan area, is widely diverse and some of the factors that will need to be looked at when knowing what your target market is are what is the area’s growth rate, the median age, median income, overall employment status and gender percentage. All of this type of information is easily accessible through public city records that can be found online.
Unless your restaurant is just getting started, there should be one or more years of sales information that will be available for use as historical data to be able to see trends on a year over year comparison. The more years there are to work with, the more accurate the trend analysis will be. Obviously, you would like to see an increase in the sales/revenue on a year over year comparison, but even if there is a decline, that needs to be taken in to account when building out your budgets. When looking at the year over year data, one needs to keep in mind that they are looking for patterns. If there is a steady increase or decrease in sales that stays relatively at the same growth percentage for several years, it is safe to assume that trend will continue. If there are large swings from year to year, there is still a reason as to why that would be happening. It could be that there are big events that are occurring in the area that drive sales one year, but not the next. This is very common for cities that host large sporting events and conventions. That is also why it is important to keep records on the events that come to the area so that you have a good working idea of what constitutes a good revenue year that has major events and what is a good year when there are less, or no, events, as you will need to plan for these. This type of information is available and easily found online through a city’s calendar of events.