You may have set out to start your restaurant business buzzing with ideas and dreams, certain that people would love what you had to offer. However, the reality of running a restaurant can be quite different. From inventory management, to staff training, to menu planning, the mundane can quickly discourage even the most enthusiastic entrepreneurs. As you work in your restaurant, what you may have realized is that great food and good service doesn’t always equal success or isn’t the only benchmark for earning customer loyalty.
According to a report on CNBC.com last year, a staggering 60 percent of new restaurants failed within the first year, and nearly 80 percent shut down before their fifth anniversary. But who wants to start a business with a shelf life in mind? A smart business owner, knows to learn from other’s mistakes, and we wanted to make that learning process, just a little easier for you.
So, here are 6 reasons why you aren’t seeing the cash registers at your restaurant ringing yet.
No one knows what makes you Special
Great food and service are a basic requirement for any restaurant today, right from the local joint in your neighborhood to the swanky restaurant which is topping every foodie’s list. Clearly that alone is not enough. Your Unique Selling Point has to be evocative of a feeling they want to revisit. The distinction will come from the experience you provide from start to finish and the customer attention you devote. Great food will just make you hit the spot, but great service is likely to earn you loyal customers your business needs in order to grow.
Management without Homework
Can you tell what menu items are the best sellers? How much does it cost you to prepare these items? What is your labor cost? What is your sales week on week? What are your lean periods in the week and when do you see a boom? If you don’t collect and analyze your data, the problems in your business will remain blind spots. In turn, you will fail at creating effective marketing strategies, cost effective services and inventory management systems that can help you easily succeed.
Although an elaborate menu provides more options, but it also confuses your eager-to-be-blown-away customer. A long menu means you have a lot of inventory to procure, store and worry about. Also, the longer a customer takes to place his order, the longer you are not making any money off that table. This could cost you dearly during your peak hours.
Getting Lost in the Crowd
You have great food, but no one knows about it. Great ideas, which you haven’t shared. You are unaware if your staff was rude to your regulars, so you can neither fix the glitch, nor retain your customers. You are going unnoticed, because you are not making yourself being seen or heard. Gone are the days when one bad meal could be ignored, today, a bad meal equals to a bad review on social media platforms, resulting in a potential crisis for a business owner. What will work, however, is being connected with your customers where they are present. Stay connected with your happy and unhappy customers, and be available for the audience you want to reach out to, and ensure that every successful night at your restaurant is duly amplified on your social networks. This will take your business a long way in today’s digitally connected world.
Ignoring Tech Advancement
Old school methods of frantically trying to keep it all together by being everywhere and doing everything are probably derailing your business. Simply having a strong team isn’t enough. If you are not using the technology that is available today to aid your business growth, you are missing out on a big opportunity to turn profitable. It can help you resolve customer queries instantly, update your menu based on popular dishes, train your staff adequately and even customize experiences for loyal customers.
Managing Cash Flow
Unavoidable expenditures are a part of every business venture, but it is essential to keep an eye on maximizing the outcome of your spends to ensure your business doesn’t tank. For example, marketing campaigns done wrong can cost a lot of money. Aim at using targeted campaigns that reach out to the right customers with the right offers. Another way to manage your cash flow is by giving offers on slow moving items on the menu to your loyal customers and creating campaigns around lean days to keep the cash register rolling all week long.
Restaurants are no riskier than any other new business as per the U.S Bureau of Labor Statistics. But the usual reasons for failure are actually most avoidable ones. Correct information, training and skill acquisition & the right technology tools can ensure your restaurant’s success and can keep you profitable & popular.