Why Some Restaurants Fail
From the perspective of a diner there are few things that cause more disappointment than news that their favorite restaurant is closing. Shock is perhaps a better word than disappointment, especially when there are many good memories and tastes that explode in your mind when you just think about the food.
So what causes a restaurant to flounder and fail when it seems to have excellent food, superlative service, and even good crowds?
First of all most failures occur in the first year, and the ate is as high as 90% in some markets. The main reasons for failure are:
Low Start-up Capital – There simply wasn’t enough thought given to the amount of time needed to pass the “break even” point after all the initial costs are laid out.
Poor Knowledge About Competition – A new restaurant owner may love the way food was cooked in his or her hometown years ago, but in a new market things are different. Check out what’s popular at other restaurants and find out why people love it.
Poor Marketing – If you hire a marketing company make sure they have experience in the food service arena and can prove it. Successful restaurants market different that hardware stores. Poor reviews must be handled professionally and promptly because more than a few can doom a restaurant.
Poor Staff Management – This is the hospitality industry, and employees and managers must be hospitable! Hire managers with positive, can-do attitudes and they will choose similar people to work the front lines. No one wants to deal with a surly attitude from a server or bartender.
Location Location Location – Where you are is almost as important as who and what you are. Some areas have commuter traffic from trains or foot traffic near the beach. If your area is a car-focused population you better have parking.
Bad Partnership Arrangements – This applies to partners who co-own the business, when an inadequate understanding of input, control, and sharing of profits happens as well as partnerships with suppliers and vendors. Choosing trustworthy and competent company-partners to supply food, supplies and equipment is one of the most important decisions to make right from the start.
HotelRestaurantSupply.com views our relationship with restaurants and hotels as a partnership. We want to understand your particular business so we’re always ready with what you need to keep cooking. We’ve been visiting kitchens around the world for a long time and we would welcome the opportunity to chat and offer our insights if you wish. www.hotelrestaurantsupply.com