5 Reasons Why Restaurants Fail

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Reasons Why Restaurants Fail Source: Pexels

A research in Ohio State University in 2015 found that 60 percent of restaurant businesses fail in the first year. Meanwhile, 80 percent of them closed before 5 years. As quoted in Restaurant Den, there are many reasons why the restaurant experienced bankruptcy. However, there are five frequent mistakes which restaurants make. Here are five reasons why restaurants fail!

Inexperienced owner

Many people have a big dream to have a successful restaurant business. However, not all of them are willing to learn about the business deeply before they dive into the business. Sometimes they forget that starting a restaurant is not all about spending a lot of money. They also need a good commitment, responsible, and of course a knowledge about the business. No wonder, even though it seems fun, this business is considered complicated. If the owner doesn’t have the capable knowledge, the restaurant will fail.

Poor location is one of the reasons why restaurants fail

Location is one of the most important things for a restaurant business. It is because choosing a poor location will lead your restaurant to bankruptcy. Even if you serve the most delicious food, customers will not want to visit too far away restaurant, or the restaurant in which the location is harmful. Make sure that you choose the best location with the best access where the customers will be happy to visit.

Poor financial management

Anything that is related to money always needs to be perfect. Without a proper accounting management, it is impossible for a restaurant to gain profit. In special cases, the owner might get profit but it will be really hard to track where does it come from. Therefore, it will be really hard to forecast what will happen in the next period. Recruit an experienced accountant to help you to manage your financial affair. If needed, try to implement accounting software to help your accounting staff organizing the financial much better. Read 3 Ways Accounting Software Will Increase Restaurant Profit.

Poor marketing campaign

One of the tips to start a successful restaurant is having a great marketing campaign. If the owners avoid spending some money for promotion, don’t be surprised when they don’t get business profit. Try to find the best way to promote your restaurant. Participating in a food festival, for instance, can help you to build the brand awareness. However, in this technology era, do not forget to promote your restaurant via social media.

Poor customer service

Having loyal customers is one of the indicators that you have a successful restaurant. They will not only come because of your delicious food or great restaurant ambience but also because of the great service. Within the services company like restaurant, giving employee proper training is mandatory. Therefore, train your staff hence they can serve customers much better. Make sure that they can handle complaints and critics properly. Because poor customer service can become one of the reasons why restaurants fail.

Starting a new restaurant is, indeed, challenging. However, if you know and learn the tricks, having a successful restaurant is not impossible. If you want to develop your restaurant, also read 7 Software Every Restaurant Management Should Have.

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