Common Reasons Restaurants FailFailing restaurants: common mistakes to look out for

15.5% of businesses in the hospitality and catering sector fail every year compared to just 5.25% of businesses in the general economy. 

And that’s not factoring in the detrimental impact Covid-19 has had on the industry.

However, the good news is that failure is preventable. With a concrete plan in place and realistic expectations, you can safeguard your small restaurant through even the most tumultuous of times.

Industry awareness and experience

Running your own restaurant might be a childhood dream of yours. You may envision a thriving restaurant in the heart of a bustling town centre where Michelin star chefs queue up for interviews.

You should absolutely dream big, however a successful restaurant goes beyond a lively atmosphere and great food. 

You will need a good slice of dedication and industry-awareness, not to mention a wide array of skill sets under your belt. You will be required to juggle the books, attend to general business management, and keep staff, products and marketing ticking over, too.

It is therefore paramount that you have some degree of experience in the hospitality sector and that you stay tuned in to industry forecasts to prevent any hiccups that occur from throwing your restaurant off course.

Unrealistic spending

Closely interlinked with a lack of industry awareness is unrealistic spending. Imaginative owners frequently fall into the trap of refurbishing their space in a bid to attract the social media generation, but often don’t generate the sales to cover these hefty expenses.

It is tempting to dazzle the crowds with a talk-of-the-town restaurant, but before you cough up for ‘Instagrammable’ interior, make sure you can cover the costs to pay your staff and keep the place running.

Small restaurants have to ensure their menu costs are watertight in order to cut a profit. 

But you should also closely monitor food and drink waste as these oversights can quickly consume your profit margins. Liberally axe items from your menu that aren’t working and aim for a simplified, shorter menu that spares costs but delivers high standards.

Once you’ve cemented your figures, then you can start to experiment with the design and ambiance of your restaurant.

Lacking a clear vision

Another common reason restaurants fail is because they lack a vision and a company ethos.

A mission statement for your business is not only an important indicator to your customer base about who you are and what your place is about, but it also creates a set of values to guide your staff.

Think about what type of food you’re selling. Are you offering classic cocktails or craft beer? Who is your target audience? What characteristics do you need when hiring hosts, servers, bussers and bar staff?

A good-quality concept will intertwine what you’re selling and your values to the customer and, in turn, establish your own unique style.

Poor location

Location is one of the most important things to consider when opening a restaurant. Location may even be the difference between making or breaking your business.

You need to find the right balance between a location that benefits from high footfall but where the rent alone doesn’t eat into your revenue. 

Equally, your chosen location cannot be too inconvenient for your customers to get to as you’ll end up forking out just as much in marketing to attract people through the doors.

You’ll know if your business is situated in a bad spot: staff may be stood around with nothing to do and you may feel as though you’re profiting penniesfar below your expectations. If this is the case, it may be sensible to relocate.

Refusing to adapt

Running a restaurant means you will need to adapt to consumer demands. Whether your menu needs to cater to veganism or you need to show awareness to environmental issues, it is vital your restaurant continues to evolve with the times and trends of the day.

By updating your menu regularly, you’ll keep your customers and staff excited and inspired. Meanwhile, owners who refuse to adapt along the way will only fall behind and get lost in the noise of the competition.

Finishing touches

Now armed with these dos and don’ts for your small restaurant, you should be prepared for any bumps in the road you may encounter. 

Sprinkle in some sterling customer service and excellent social media marketing, and your restaurant will be plain sailing into success for many years to come.

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