You know you can cook, you are highly hard-working, and you’re damn sure you can run a restaurant. Sounds easy enough, right? Unfortunately, it’s easier said than done. Managing a successful restaurant is one of the hardest businesses in the world.
Running a restaurant is not as easy as it may seem. Unfortunately most restaurants, no matter how well they thought they tried, fail within three years of operations.
Here is the list of the reasons why restaurant fails within the three years of operations:
All expertise & no execution
So you can cook. Your food is amazing, and everyone you cook for; approves it. You’re ready to open a restaurant then, aren’t you? NO!
Not to outbreak your bubble but, a lot of people are finest cooks. There are many who are having innovative ideas & amazing food that no one has ever offered in a restaurant before. But, that doesn’t make them, or you, a good applicant to open a restaurant. Owning a restaurant isn’t only about cooking delicious food. While those things are components of a good restaurant but, they are not the reason for its success.
What most restaurant owners don’t realize is that having good food and service is only a quarter part of the battle. The other & the heavier portion include marketing and managing their restaurant.
Managing a restaurant is a challenge that most of the new restaurants overlook. Apart from making good food and selling it to people, you also need to know how to collect data and analyze your business to make sure that you must have the necessary information to run a profitable business.
Poor pricing strategy
Strategy! Yes, strategy. You need to have a method for pricing your menu. You can’t just look at what everyone else is charging, and charge likewise. The financial picture of your business is different than every other business out there, and you need to have a pricing strategy that takes your unique financial situation into account.
When considering the real pricing strategy, the first thing you should know is what is being done out by the restaurants all over the country, even the world, because the point is not to repeat the same mistake what everyone else is making.
The pricing strategy you adopt should be dependent upon certain factor like the place you’re in; including certain age group of people; you’re crowded with & along with the average income. These kinds of strategies will definitely push your restaurant to a good level.
No unique selling point
Your food is so good that people will line up outside your restaurant to eat it; you’re mistaken; just as millions of restaurants owners. Your customers should need a reason to come to you instead of your competition & also apart from the delicious food.
Yes, you need to have great food and service, but by having great food and service, you are only meeting the minimum expectations of your customers. You are not providing your customers with a reason to eat with you that your competition isn’t asserting as well. What you need is something original to sell. Something other than the best food or service, you definitely need a unique selling point.
Unique selling point can be an emotion that you offer to your customers; whether in terms of pleasant remembrance or something related to it. The real, emotional connection with your customers that you make is what stays forever, even after the food you served gets digested.
No marketing skills
Having no marketing skills can be the dominant factor among the other factors leading to downfall of the restaurant. No matter how great your food is if no one knows, it won’t sell.
The inferior falsehood that is being noticed is that the restaurants market their new business through word of mouth. Yes, word of mouth marketing is an amazing factor. Even the new customers are more likely to act on the endorsement of a past customer.
The problem with overbearing word of mouth marketing is going to make a bunch of people do the same thing over & over again. You can’t depend on word of mouth marketing until you’re completely purely established! Don’t be dependent on single marketing mix & adopt the latest marketing trend for your restaurant business.
A great marketing scheme, consistent product & a strong identity can ensure that your restaurant can stay afloat. But, if you look at the above list & find that your restaurant faces the same problem then, it is time to take immediate action & begin to cure those problems because overlooking them can spell failure for the success of your restaurant.
Keep these lists of reasons in mind, and maybe, you won’t become one of the majorities of restaurant owners that fail!