Reasons why restaurant business fails
Reasons why restaurant business fails
1. Location, Location, Location
Just like when homeowners are searching for the perfect home and location, you need to follow suit when selecting your retail space. I’d even say you can’t be too picky when it comes to this make-or-break decision.
Because if you don’t look at a prospective location from all angles, especially a patron’s viewpoint, you’re liable to wind up with one or more of the following problems:
2. People Problems
I’ve always said, “My business is people.” And when I counsel restauranteurs, I encourage them to embrace this same mantra.
Your team – your people – represent you on the front lines. If you’re having “people problems,” it could be due to a whole slew of reasons:
3. Poor Customer Experience
Customers come to your restaurant for more than the food. They come for an experience. And if their experience offers more negatives than positives, you could be headed for trouble.
Your customers may have a poor or average experience due to the following:
4. Trying to be Everything to Everyone
It’s not just a popular pop song from the 90’s! Trying to be everything to everyone is a recipe for disaster. The most successful restaurant concepts know their niche…and nail it.
If you can’t, or won’t, hone in on your specialty, you’ll encounter these issues:
Overspending is an enticing trap for newbies. It’s easy to think if you just spend more money on advertising or remodeling the dining room, that business will boom.
Before you make that jump, consider how else overspending can creep up on you:
6. Lack of Systems
Developing systems that are customized to your operation is vital for success in those early years and beyond. Your time is limited, so establishing systems – along with checks and balances – allows you to auto-pilot select tasks.
For example, are you spending too much time on payroll, compliance, training, and HR tasks? If so, this takes time away from running a bustling restaurant. Divided attention will hinder your development.
Tags: HR Group
1. Location, Location, Location
Just like when homeowners are searching for the perfect home and location, you need to follow suit when selecting your retail space. I’d even say you can’t be too picky when it comes to this make-or-break decision.
Because if you don’t look at a prospective location from all angles, especially a patron’s viewpoint, you’re liable to wind up with one or more of the following problems:
- Poor visibility
- Insufficient parking
- Limited foot traffic
I’ve always said, “My business is people.” And when I counsel restauranteurs, I encourage them to embrace this same mantra.
Your team – your people – represent you on the front lines. If you’re having “people problems,” it could be due to a whole slew of reasons:
- Ineffective hiring – Hourly vs salary ratio.
- Being consistently understaffed.
- Lack of focus on proper training – i.e. operations, customer service, leadership.
- Unclear workplace culture.
3. Poor Customer Experience
Customers come to your restaurant for more than the food. They come for an experience. And if their experience offers more negatives than positives, you could be headed for trouble.
Your customers may have a poor or average experience due to the following:
- Disengaged staffed – not smiling, no energy, or visible lack of comradery with coworkers.
- Unclean or disorganized restaurant or small details overlooked – bathrooms not stocked, dirty windows, or soiled menus.
- Poor food quality – dishes take too long to prepare or delivery to table is slow.
4. Trying to be Everything to Everyone
It’s not just a popular pop song from the 90’s! Trying to be everything to everyone is a recipe for disaster. The most successful restaurant concepts know their niche…and nail it.
If you can’t, or won’t, hone in on your specialty, you’ll encounter these issues:
- Overcomplicated menu – too many food items, changes too often, staff unable to keep up with the new, ever-changing menu.
- Lack of uniqueness.
- Jack of all, but master of none.
Overspending is an enticing trap for newbies. It’s easy to think if you just spend more money on advertising or remodeling the dining room, that business will boom.
Before you make that jump, consider how else overspending can creep up on you:
- Spending too much before opening – excessive remodels, updates, and other possible non-necessities.
- Failing to closely watch – and reign in – cash flow.
- Not understanding food costs.
- Payroll growing too high.
6. Lack of Systems
Developing systems that are customized to your operation is vital for success in those early years and beyond. Your time is limited, so establishing systems – along with checks and balances – allows you to auto-pilot select tasks.
For example, are you spending too much time on payroll, compliance, training, and HR tasks? If so, this takes time away from running a bustling restaurant. Divided attention will hinder your development.
Tags: HR Group
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