Scenario planning for restaurants

Restaurants navigate considerable uncertainty. The food service industry is highly prone to disruption by social and economic trends


Scenario planning for restaurants

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Smart restaurant owners seek to mitigate risk and maximize upside. With our small business scenario planning tools, you will be able to chart a sustainable course through an unpredictable future.


Introduction to scenario planning

Scenario analysis is a financial planning discipline that supports effective decision-making. Because it is based on evaluating hypothetical future outcomes, it has been used by the world’s most successful companies, such as Apple, Amazon, and Microsoft. 

During a scenario planning session, executives ask a series of “what if” questions and explore the possible outcomes of different contingencies. When done with the right framework (hint, hint: Profit Frog), scenario planning can reduce uncertainty and increase profitability. 

Now, the power of scenario planning is available at an affordable price for restaurant owners to use. Profit Frog helps restaurant owners model profitability under hypothetical futures and chart a course to maximum profits.

Which, of course, is the reason you’re in the food industry.

Benefits of scenario planning for restaurants

Scenario planning is incredibly beneficial for small businesses, including restaurants. Benefits of scenario planning include:

  1. Be decisive and move quickly. Restaurant owners can react quickly to external events because they’ve already modeled their response and have a plan.
  2. Have a competitive advantage. Investors, customers, and employees will be inspired by decisiveness and dexterity.
  3. Minimize risk by not being caught off guard. When restaurant owners are prepared for specific scenarios, they are less at risk because they can act quickly to keep the impact minimal.
  4. Maximize upside. A restaurant can become less fragile by being prepared to take advantage of opportunities introduced by change; meanwhile, unprepared competitors cannot mobilize quickly enough to capitalize on the opportunity.

Restaurants thrive with Profit Frog

Scenario planning was once only available to mega-corporations with unlimited budgets and financial wizards on staff. But, over the last couple of years, a new crop of scenario planning tools have emerged. Most of these cater to enterprise organizations and have a pretty steep learning curve and too much complexity.

Profit Frog is the only scenario modeling tool built for small businesses and startups. With a fool-proof interface and the ability to dynamically plan multiple scenarios easily, we give you everything you need…and nothing you don’t.

With Profit Frog, you don’t need an army of MBAs or mad Microsoft Excel skills. Simply follow our prompts and you’ll be modeling scenarios like a true pro.

Our scenario planning software lets you model a range of possible outcomes and impacts. Then you can steer your restaurant toward best-case scenarios while being prepared for worst-case ones.

  • Learn where to allocate resources
  • Be strategically and financially prepared for a worst-case scenario
  • Identify potential risks and turn them into gain
  • Recognize and seize amazing opportunities
  • Gain confidence in your decision-making skills by preparing for things you can’t control
  • Be ready for disruptive change and take advantage of it
  • Have a proactive rather than reactive orientation to the future


Strategic Planning vs Scenario Planning

Many restaurant owners mistake strategic planning for scenario planning, when the two processes are actually very different in orientation and result.

  1. Strategic planning assumes a known future outcome and strategizes how to get there
  2. Scenario planning assumes a dynamic, chaotic future and helps you plot the course to maximum profitability through all the unknowns

While scenario planning is designed to navigate variability, strategic planning is a more static process and is disrupted by variability.

Profit Frog’s scenario analysis is designed to be dynamically updated as conditions change. This sort of dynamic planning is much more effective and actionable than many static planning models.

Restaurant owners that adopt scenario planning are better positioned for variability than those that undertake strategic planning alone.


Scenario planning FAQ

How should a restaurant owner calculate the cost of goods sold?

Cost of goods sold, also referred to as COGS, is a financial metric developed for companies that make and sell physical products. 

Since restaurants are primarily service businesses, calculating COGS is a bit different than for manufacturers. Fear not: our built-in COGS calculator will walk you through the process and give you all the tools to separate COGS vs OPEX.

How to use scenario planning in situations caused by the Covid-19 pandemic?

In a world remade by the pandemic, every organization needs to invest in financial, strategic, and operational scenario planning. Profit Frog helps you model organizational viability across all types of scenarios, including disruptions caused by pandemics, supply chain issues, recessions, and other events.

How does Profit Frog’s scenario planning software differ from other options on the market?

Other scenario-planning software is expensive and overly complex. Ours is fool-proof and affordable.

How does Profit Frog’s scenario planning software help my restaurant make better, more informed decisions?

When you create scenarios in Profit Frog, you’ll be using your actual company data and then strategically altering certain variables. This gives you valuable insight into how specific factors will affect net profit—without having to actually experience the situations. You’ll use the insights gleaned from these exercises to craft a dynamic business plan that is antifragile and tailored to your goals.

How much does Profit Frog’s scenario planning software cost?

We price our software on a sliding scale based on your company’s total revenue. For custom pricing, don’t hesitate to contact us for a personalized estimate.

Does Profit Frog offer free trials?

Yes, we offer a 14-day free trial of our software.

How do you create a scenario planning project with Profit Frog?

Profit Frog is an effective scenario planning tool that allows you to model as many scenarios as you please, quickly and easily.

  1. Identify scenarios you want to model
  2. Input actuals (data about your business) into Profit Frog
  3. Adjust variables dynamically to see how they influence scenarios
  4. Create an action plan and update it dynamically as conditions change

With a Profit Frog scenario plan, you can look at local or global scenarios with the lens of how they will impact your restaurant. You can then look at the various alternative futures posed by those scenarios and develop a plan to navigate them.

Further reading on small business financial management

Understanding revenue vs profit

Why forecasting matters for small businesses

Disadvantages of scenario planning

Measuring year-over-year growth

Net profit vs gross profit metrics

Using profit and loss effectively

Making sense of P&L vs cash flow

What are the best profitability modeling tools?

COGS vs operating expenses explained

What is included in COGS?


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