Every year, thousands of new restaurants are established. And every year, thousands of restaurants fail.
There are many reasons why so many eateries fail to see even their first birthday. While some of them are familiar — overpriced food, excessive competition, poor service — others are more low-profile. It takes ownership and management working to address all of these issues, the obvious and the underlying. Without careful attention to them, any restaurant can fall victim.
Impact of Cheap Inputs
New restaurants have lots of overhead. They’re renting or building a space to operate, hiring lots of staff, purchasing equipment, and advertising like crazy. A good entrepreneur finds ways to economize these expenditures, but some go too far and reach a point where it undermines the operation.
Equipment is a perfect example. New restaurants often try to save money by using lower-grade equipment, or by skipping some purchases altogether. For example, they may think that a hand-washed dish is clean enough for home use, so why not for business use?
Of course, the difference at home is that it’s a closed system of users; that is, the same few people are using the dishes, and they already live in the same house. When one gets sick, they’re probably all going to get sick regardless of the dishes because they’re together all the time.
Restaurants need commercial dishwashers because they’re an open system. Hundreds of people may use the same fork in a week, any of whom may have a communicable disease. If the fork isn’t properly sanitized, the germ will spread.
Lack of Attention
Many restaurants fail because they don’t keep things current. Whether it’s their social media presence, a website, or other advertising, restaurants need to keep their public profile current. If Monday’s special is no longer the same, those platforms need to reflect the change. If they don’t, customers will come in to get the item and will be disappointed when it’s not there.
Speaking of the menu, it has to stay current as well. Vast areas of covered or scribbled-out items tell customers that some of your entrees aren’t very good. They also reflect an overall sloppy attitude; if you can’t spend a little time printing new inserts or ordering new menus, you must not care very much about your restaurant’s success.
In fact, anything that seems to be ignored consistently can erode your reputation and force you out of business. A few broken floor tiles right at the front door may not seem like a big deal, but customers notice. Burned out or missing letters on your sign, tears in upholstery, malfunctioning bathrooms, and lots of other oversights can tell people that you just don’t care. Soon they won’t care either.
Lack of Professionalism
We’ve noted that bad work by personnel in the front of the house is a well-known problem in restaurants. But what’s going on among management and ownership can be much more destructive.
Customers will often ignore a bad server, especially one working other tables, as an exception instead of the rule. But when they see the problem as endemic, that’s very different.
If your order is incorrect and the manager degrades the kitchen staff as an excuse for the mistake, how does that make you feel? What is your image of the restaurant?
Other things can happen as well. Management should show concern for problems and not argue with customers about their complaints. They should be respectful and, for lack of a better word, humane to their employees. When these areas begin to show weakness, customers feel uncomfortable and avoid the restaurant.
The restaurant business is notoriously competitive. There are plenty of things working against new ones. If you’re working in it, don’t make the environment any harder. Invest in the right equipment, stay attentive to detail, and at all times, act professional. You’ll see the impact on the bottom line — and on the calendar.