| People tell you that you make the best meatloaf | | | | You absolutely need to be able to cost out the |
| in town. In fact, everything you make is good. | | | | items on your menu, and to set a price that will |
| That's all the reason you need to get motivated | | | | make your business enough money to survive. If |
| and buy yourself a restaurant. After all, if the | | | | the price you come up with is too high, then you |
| food is good, being successful should be a breeze, | | | | will need to adjust the recipe. |
| right? This is just one of the misguided concepts | | | | The Customer Obviously Doesn't Know Good |
| that contribute to why restaurants fail. | | | | Food |
| Before you get too excited about the fortune | | | | One of the biggest problems plaguing businesses |
| your going to make, you need to take a minute | | | | today is the lack of customer service. Even |
| for a little reality check. The truth is, many people | | | | businesses in the "service" industry do a terrible |
| open their first restaurant without a clue as to | | | | job of taking care of the customer. |
| what they are getting themselves into. They | | | | If you want to survive in food service you need |
| have grand visions of success, but not enough | | | | to have thick skin. One of the guarantees in this |
| understanding of the business to capitalize on | | | | business is that you are not going to make |
| what they do well. It is that lack of understanding | | | | everyone happy. You could have a recipe for |
| that is a huge reason why restaurants fail. | | | | BBQ ribs that has won awards in every contest |
| If the Location is Good, You Will Make Money | | | | you entered, and you will still get someone in your |
| One of the axioms of business is that the 3 most | | | | restaurant that complains about them. When that |
| important things for your business are, location, | | | | happens, your reaction is an indicator of how well |
| location, location. While it is true that a good | | | | you will do in the restaurant industry. |
| location is a great investment for your business, | | | | Your customers are your life-blood. They are the |
| having a great location is not a guarantee of | | | | reason you open the doors every day. Without |
| success. In fact, some restaurants do very well | | | | them your restaurant will surely fail. If you want |
| with an average location. | | | | to know why restaurants fail, look at how they |
| Location is huge, but it isn't the only factor to | | | | treat their customers. |
| consider. Even the best location can't overcome | | | | I Just Need Enough to Get Started (and then I'll |
| poor business practices. All it means is that more | | | | earn the rest) |
| people will be able to see your restaurant sitting | | | | The number one reason restaurants fail is that |
| empty. You could end up being cursed by an | | | | they don't have enough money to start with. This |
| empty parking lot. | | | | is actually true of all new businesses. In order to |
| One of the drawbacks of high visibility is that | | | | save on interest payments, new restaurant |
| people will be able to notice that you don't have | | | | owners will borrow the least amount they can get |
| many customers on a Friday or Saturday night. If | | | | away with, and then suffer a cash flow crisis |
| that trend continues, they will begin to wonder | | | | when the sales didn't meet their rosy |
| what is wrong with your restaurant. | | | | expectations. |
| Get the best location you can afford, but don't | | | | Once the money flow starts to slow, restaurant |
| forget to pay attention to all of the other details | | | | owners start looking for ways to preserve their |
| of your business. You cannot expect the | | | | cash reserves. Unfortunately, many of these |
| restaurants location to make every thing alright. | | | | strategies only serve to make the problems |
| This Sounds Like a Reasonable Price | | | | worse. They raise prices, or reduce portion sizes, |
| One mistake that restaurateurs without business | | | | or even start to purchase lower quality food |
| experience make is to fail to properly cost out | | | | items. Soon their reputation starts to suffer, and |
| their recipes before they place items on the | | | | sales go even lower. |
| menu. They look at the item they want to sell, | | | | The best way to counteract that problem is to |
| and then they set the price on gut feeling, and | | | | make sure you have enough financing to last you |
| what they think customers will pay. In the end | | | | through the slow startup period. If you really want |
| they have no idea how much the item actually | | | | to avoid restaurant failure, make sure you have |
| costs them to make. | | | | enough cash. |
| If you look at the budget of a typical restaurant | | | | Learning why restaurants fail is a great way to |
| you will notice that one of the biggest costs of | | | | make sure you do not make the same mistakes. |
| the business is the food cost. If you can't control | | | | Do your homework, and make sure you |
| that line, you can add businesses name to the | | | | understand the business before you take the |
| growing list of restaurant failures. | | | | plunge. It will pay off in the long run. |