5 Common Mistakes New Restaurants Owners Make

success in the restaurant industry

Posted: Sep. 04, 2018

The cold, hard truth: Opening a restaurant or bar comes with immense risk. Between three and five years of being open,  70% of restaurants close. Today we explore a few reasons why that number is so high.

Having success in the restaurant industry relies on many factors, such as strategic marketing, location, prices, and food quality. And there is no “right” combination of factors to follow. Each restaurant has its own unique set of contributors that make it a success. Nonetheless, there are certain behaviors and trends that new restaurant owners tend to make that inhibit their future success.

Below, we share the most common mistakes new restaurateurs make and how to avoid them.

Assuming the Restaurant Will Turn a Profit

Perhaps the most common mistake new restaurant owners make is assuming their restaurant will turn a profit right away. Veteran restaurateurs will tell you to plan for the opposite and have an allowance to cover your first annual quarter. Unless you have built the hype around your restaurant with an aggressive and strategic marketing campaign, chances are that you will need at least two to three months to build up sales volume.

Another reason to allocate time for the first quarter is to work out the kinks, especially for staff. They need this time to become acclimated to the new environment.

In the first quarter, the FOH and BOH learn how to work together, how to manage customers, and help you to make the necessary adjustments along the way. The menu might need tweaking or you need to find a rhythm with suppliers.

Set aside enough money in your budget to cover these operational costs, and you can take your restaurant over the hump.

Avoiding a Leadership Role

As the owner of a new restaurant or bar, your top priorities are running the business smoothly and turning a profit. To do that, you must be the leader.

Try to fight the urge to become another employee. In the beginning, your participation in bussing tables, managing the books, and maybe even cooking can be necessary. For the long-term, though, these are not your primary responsibilities.

To be the best owner, you must train your staff well and delegate tasks appropriately. Then, you can focus on strategic operations, like monitoring the cash flow, analyzing the sales, and planning future marketing campaigns. With the right restaurant point of sale, tasks that are normally time-consuming are monitored and organized by the POS system, making them easy to review and analyze to improve operations.

Additionally, uniting your staff under one common goal will bring you closer to success. Having a clear vision and purpose will inspire teamwork and dedication in all areas of your restaurant. By taking control, you can create a smooth environment and pleasant working conditions that will foster a prosperous future.

Not Defining Company Guidelines

Running a restaurant entails myriad tasks and procedures, so you are encouraged to stay organized with documented manuals. As time passes, your processes will develop and soon become repetitive. Create detailed company manuals that include recipes, checklists, and accounts for all areas of your restaurant. You can use this later to train new employees, and also to avoid creating bad habits.

Forgetting the Customer

Opening this restaurant is your dream, just don’t forget to check how much your customers are enjoying it. Customer satisfaction is essential for your success.

Enjoy creating the branding, menu, and concept of your restaurant, but then sit back and watch how customers respond. In your first year, greet customers and ask for their feedback. Formal and informal surveys are a recommended way of getting honest criticism or praise. Take advantage of your findings—market research is priceless—and make the right changes, even if they are counter to your dream.

Making the First Night Your Grand Opening Night

There are many mistakes that a new restaurateur can make, but this is one that even the most experienced have a hard time recovering from: Making your first night the grand opening.  

The first night is not a time for celebrating—it’s a time for learning. Your staff and kitchen are working together in an official capacity for the first time, and mistakes will happen. Have a soft opening for two weeks, and quietly invite friends and neighbors. Assess the issues that come up every night and work to fix them. Only once you have worked out the major kinks should you announce your grand opening.

Are you opening a new restaurant? See what the habits of successful managers are, and check out 15 reasons why restaurants fail.

 

 

 

 

Posted: Sep. 04, 2018 | Written By: Emma Alois

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