So you've decided to open a creperie,but before moving forward with your business plan, it's important to estimate your future restaurant's turnover.
If you're not sure where to start, don't worry. We've written the 5-step guide below to help you accurately estimate your creperie's turnover.
Estimating the expected turnover of a creperie
Until a creperie business is up and running, it's impossible to estimate what its exact turnover will be. From deciphering how many customers you'll be welcoming a day to estimating exactly how much you'll sell of each recipe, most factors remain pretty uncertain.
That's why we've put together the guide below to help you ask yourself the right questions and estimate your future sales as accurately as possible.
What information is needed to calculate a creperie's turnover?
Before you begin calculating your creperie's turnover, you need to have carried out thorough research on the creperie market.
This should, at a minimum, enable you to add up the following factors:
- The average spend per customer for creperies
- The frequency of visits: will your customers be fleeting visitors or loyal regulars? This will depend on your location as, for example, a tourist area is bound to generate fewer regular customers than an office district or residential area.
- The number of potential customers: this will be based on the population size of your business' region and, specifically, the daily figure of visitors to your catchment area
- Who your competitors are: the close analysis of your direct and indirect competition is an essential part of your market research.
1. Evaluate the number of crepes you can make each day
The first step in evaluating the potential turnover of your creperie is to determine your maximum capacity.
This is an estimate of the maximum number of meals you could serve if your restaurant was full all the time.
Making this calculation is useful because it forces you to take all the operational aspects of your restaurant into account, whilst setting a limit you can later refer to when assessing the consistency of your sales forecast.
To find out how many meals you'll be able to serve in your creperie on a daily basis, you'll need to consider:
- The maximum number of meals you can expect to have to prepare: this is based on the number of tables, the average number of guests per table, and the average time they spend eating
- Your production capacity: the time it takes to prepare your crepes in the kitchen and the number of staff members responsible for food prep (this is especially important if you offer a takeaway service)
- The time required to serve or deliver food to customers: for example, if you hire delivery drivers, you'll need to estimate how many customers they can feasibly reach each hour.
Once you've calculated this limit, you'll need to then weigh it up against your ability to attract customers and the impact of seasonality to estimate your fill rate.
2. Assess market size using the estimated number of customers
Once you have a rough idea of the maximum number of dishes you can serve each day, it's time to estimate your creperie's fill rate a little more realistically.
To do so, start by identifying the number of potential customers in your creperie's catchment area. Check out:
- The demographic statistics of the city: how many members of the public are in your target market?
- The number of businesses located and the size of their workforce (this is most relevant if you're operating in an office district)
- The flow of passers-by around your street or area. To get an accurate figure, you can contact the local town hall or tourist office, or ask a specialised firm to carry out a private study (although bear in mind that it'll cost you)
3. Rate your ability to attract customers for your creperie turnover
Like many of life's most valuable gifts, some of your favourite customers will naturally stumble upon your creperie - whether they hear about you via word of mouth, unexpectedly pass by your creperie on their way home from work or pop in after they notice an unfamiliar name that's suddenly appeared on their Google Maps.
To attract as many customers as possible, however, you can also create a website or social media channels to reach crepe lovers far and wide.
Between website development and creating smart meal deal formulas to market on Instagram, these actions will cost you - so weigh up the costs needed to implement each marketing action against the amount of money you expect them to bring in and add both figures to your financial forecast.
5. Evaluate the crepe sales themselves
By this stage, you should be able to estimate the number of customers you expect to welcome each week, enabling you to make the first evaluation of your creperie's turnover.
Estimated turnover = number of tables x number of guests per table x fill rate x average spend per head.
You'll also be able to calculate the fill rate using your creperie's capacity: fill rate = number of table occypied / number of tables available.
Depending on your concept and planned location, it may also be useful to break down this forecast according to different time slots (lunch/evening, week/weekend) or sales channels (sit-in or takeaway) for your creperie.
This calculation method has several advantages:
- It enables you to adjust the forecasted turnover after your first few weeks of operation: as soon as you have a better idea of the average number of covers and spend per head, you can re-evaluate your forecast
- It gives you the opportunity to verify each of the assumptions and ensure their consistency: by talking with your team or with managers of similar restaurants, or by comparing them to the figures (including fill rate, average spend per head, and average turnover) published in the restaurant trade press, providing you with enough evidence to defend your forecast against cautious investors.
- It will force you to be realistic about how you operate: you may have initially planned to serve a hundred crepes each day, but have you enough front-of-house and kitchen staff to make this possible?
- It will enable you to estimate, as accurately as possible, the stock of raw materials required from suppliers
- Finally, it will also give you a chance to evaluate the marketing budget needed, whether you're paying for advertising in a local newspaper or paying for a developer to set up a striking website
6. Pitfalls to avoid when calculating a creperie's projected turnover
Whether you're a businessman looking to disrupt the hospitality market for the first time or a brand new entrepreneur altogether, you need to err on the side of caution when calculating your creperie's projected turnover. Here are common challenges faced by new businesses and how to deal with them:
Here are common challenges faced by new businesses and how to deal with them:
- Firstly, it's important to remember that it will take some time to build up your customer base. Word-of-mouth (although effective) can move slowly, and your online advertising and SEO efforts won't be immediately effective - so be patient on this front
- It might also be a little while before you identify the most effective ways to communicate with your customers and sell your crepes. If you tried posting on Facebook to no avail, for example, you could invite local journalists in to post an online review about your crepes?
- You'll need to prepare adequately for the impact of seasonality. Depending on your catchment area, your business will be more or less busy depending on whether it's lunchtime or evening, during the week or at the weekend, or summer or winter.
- You'll also need to factor in a trial period for your food. You can, for example, test out about twelve different dishes for the first two months and refine your menu according to the most popular recipes, creating different meal deals to see which ones work best.
You should understand by now that estimating the expected turnover of a creperie is not an exact science, but by following a few simple steps, you can significantly reduce the chance of error.
Now that our article is coming to an end, we hope it's given you a better understanding of how to carry out one of the fundamental steps of your creperie's financial forecast: estimating its turnover.
Don't hesitate to contact us if you would like to share another tip for estimating a creperie's turnover, or if you have any questions regarding the financial forecast of a creperie.
Also on The Business Plan Shop:
- Business plan template for a creperie
- How to carry out market research for a creperie
- How to write the business plan for a creperie
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