Seven Mistakes to Avoid When Running a Restaurant

Seven Mistakes to Avoid When Running a Restaurant


Running a restaurant is difficult work and extremely risky.  60% of restaurants fail within the first year of being open.  80% fail within the first five years.  The remaining 20% typically go on to have long-term success.  In order not to be part of the 60-80% group, we are going to take a look at some of the common mistakes that restaurant owners make and how to avoid them.

Understanding the costs, from beginning to end.  Money adds up fast, especially if you don’t have a plan in place.  Setting up a realistic budget and having a financial plan is key to not letting your finances become the biggest burden of your new establishment.  Understand that costs include everything from the heat and electricity (front and back of house), staff labor, rent or mortgage, insurance, and marketing expenses, just to name a few. Lack of financial planning is a common mistake you don’t want to make.

Not knowing your concept or your market.  Fail to plan, and plan to fail.  So many people go to market with a restaurant idea, and they don’t do the research that is needed to go with it.  Do you know your target audience?  The demographics?  And do you have a clear concept and identity?  Without these things in place, customers will be confused at what you are trying to accomplish as an establishment, and you won’t likely retain those customers time and time again.  Know your surroundings.  If you are going for a young, hip restaurant vibe, leasing a space amid a city with older demographics, you may not get the business you are hoping for.

Customer service is huge!  Customer service seems to be put at the back burner in a lot of areas these days.  Don’t let your establishment get to that point.  Customers are your livelihood and keeping them happy will keep them coming back.  A smile and a “hello” go a long way.  Be sure you have staff on hand who are happy to be at their job and happy to serve customers. Having properly trained staff ties into customer service as well.  Take time and effort to train your staff properly in order to avoid poor customer service.  Poorly trained staff can also lead to frustration on the management and staff members part, which can cause a high turnover rate and inconsistency.

Adapt and accept.  Adapting to change is crucial.  Times, trends, and customers needs change.  Being open to accepting these things will help your business succeed.  Failure to adapt can cause your business to become stale.  Menu updates, décor changes, and technology improvements will help your restaurant stay relevant and is a necessity for long-term success.

Inventory management. Poor food inventory management can lead to waste which leads to less profit.  Having an effective and consistent inventory system will help reduce waste.  Not controlling your inventory could also lead to food getting old and losing its quality, which will lead to food being sent back to the kitchen, leaving you with unhappy customers.

Investing in marketing.  Neglecting to set aside a budget or a plan for marketing can put a damper on business.  Digital marketing strategies, getting involved in the community, and putting yourself on social media is necessary this day in age to attract and retain customers.

Avoiding these common mistakes won’t guarantee a successful restaurant, but they definitely won’t hurt. They are worth keeping top of mind as you think about opening a new restaurant, navigate through a new opening, and after your restaurant is up and running.