The document discusses establishing sales targets and forecasting for food and beverage businesses. It explains that sales forecasts are important as they provide specific, measurable targets for revenue, covers, and average check. This allows management to set direction, determine if the business can cover costs and make a profit, and inform budgeting and inventory decisions. The document outlines procedures for creating a sales forecast, which includes analyzing historical sales data and projecting increases in covers and average check based on assumptions. Forecasts are then calculated using a formula that multiplies projected covers by the average check. An example exercise applying this process is also included.

1. ESTABLISHING SALES
TARGET
WITHOUT GOALS OR TARGETS, ONE WOULD NOT KNOW WHERE
HE IS GOING AND HOW WELL HE IS DOING

2. FORECASTING FOOD AND BEVERAGE SALES
Operating a viable and profitable food business starts with an
identification of specific, measurable, and realistic sales forecast, also
known as sales projection
A sales projection or sales forecast provides figures regarding the number
of covers, average check, amount of revenue and profit that the food
business wants to generate.
With this sales target in mind, the management can design product

3. FORECASTING FOOD AND BEVERAGE SALES
Aside from serving as a guide for direction setting, the sales forecast helps
to determine whether the business can generate enough sales to cover for
the fixed cost and at the same time make a good return of one’s
investment.

4. ADVANTAGES OF A SALES FORECAST
The sales forecast is an important tool for decision-making. Budget allocations will depend on expected
earnings. The volume of stocks wo be ordered and purchased will depend on the projected volume of
covers or patronage.
Sales forecast serves as a parameter for assessing the progress of business. One can say business is
doing well when the sales and profit targets are being achieved.
The forecast is a motivating tool.

5. PROCEDURES IN SALES FORECASTING
Get a record of monthly revenue, covers and average check for the past year.

6. PROCEDURES IN SALES FORECASTING
Enter the projected increase in covers and average check on reliable assumptions.
• A “Cover” refers to servings consumed per customers. Consumption of one “dine in” customer is equivalent to
one cover.
• Average check is the average amount of consumption of one customer. It is computed as:
Average check = Total sales
Total covers
• The average is expected to increase when menu prices increase and when servers exert more efforts in menu
merchandising.

7. PROCEDURES IN SALES FORECASTING
Compute for the sales forecast using the formula:
• Sales = Number of covers X Average check

8. EXERCISE:
No. of covers Average Check Sales
2,900 190
3,500 1,050,000
2,450 210
3,400 680,000
2,900 223
1,750 393,750
1,600 368,000
1,500 235
2,800 826,000
2,950 240

9. EXERCISE: ANSWER KEY
No. of covers Average Check Sales
2,900 190 551,000
3,500 300 1,050,000
2,450 210 514,500
3,400 200 680,000
2,900 223 646,700
1,750 225 393,750
1,600 230 368,000
1,500 235 352,500
2,800 295 826,000
2,950 240 708,000