Starting any business is scary and exciting. Emptying your savings because you think you can make it will make anyone nervous. However, those who decide to open a restaurant must love to live on the edge. Sadly, many restaurants never see a green bottom line in a spreadsheet because they fall victim to the most common reasons restaurants fail.
A Busy Menu
Many first-time restaurant owners may feel like more is better. After all, you want to cater to everyone’s hunger demands. However, a menu that spans multiple styles of cuisines is a menu that doesn’t have a specialty.
The best restaurants have a simple menu of a handful of premier entrees and a few sides. The more complicated you get with the menu, the more the food suffers. That leads to unhappy customers who spend money on an unsatisfactory meal.
Poor Location
There are thousands of failing restaurants that have five-star quality food. But if they’re in a bad location, the food doesn’t matter too much. It’s integral to home in on your target audience and find a location that makes the most sense.
Paying an exorbitant amount of money on rent in a spot no one will appreciate ensures your business is dead on arrival, no matter how much time, money, and effort you put into it.
Lazy Marketing Tactics
Finding the right location is only half the battle because you need to expand your reach in other ways. Many restaurateurs abandon or forget this key component: marketing.
There shouldn’t be a limit on marketing expenditure as a restaurant. The old methods of putting an ad in the paper or a sign on the road may get a handful of eyeballs on your business, but digital marketing plans must also be a part of the plan.
Bad Allocation of Resources
One of the worst things you can do as a restaurant owner is to waste money on things that aren’t essential to running a successful eatery. Spending too much on decorations and furnishings while being low on stock is illogical. As awesome as having a sports simulator in a sports bar to host events can be, it needs to be something you can afford before purchasing one.
Similarly, you may be losing money because you are stockpiling things that you’re not selling. The most common cause of a restaurant’s failure is poor budgeting practices.
A Bad Staff Fails a Hands-Off Owner
Unfortunately, many owners fail to realize their participation is essential to the restaurant’s success. A hands-off approach may help with day-to-day stress, but relying on your staff to solve every problem is not good in the long run.
Every aspect of your restaurant’s operations requires your full attention. Every day, you must assess all the data given to you and adjust accordingly. Luckily, with mobile reporting and analytics, restaurant owners can monitor their establishments from almost any location.
Of particular importance should be the way in which your people are treated, especially when it comes to something like their income and tips received. There are tip pooling laws that you need to make sure you follow, for instance, and in general you should try to be as careful as possible to treat your employees fairly.
If you do that, it’s going to help them to keep on your side, and that will be important for the future of the business.