Mistakes To Avoid While Running A Restaurant Business

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July 5, 2022

Running a restaurant is complicated and requires meticulous planning and strategy, along with immense hard work in implementing the said plans.

Almost 60% of restaurants go out of business in their first year and about 80% shut down within the first five years of business. There are several reasons why restaurants fail, with every restaurant having specific reasons for failure.

However, there are a few common mistakes that almost every restaurant can make that can result in increased losses and ultimately shutting down the restaurant.

Common Mistakes Restaurant Owners Must Avoid While Running A Restaurant Business

  • Ignoring The Location

Your restaurant’s location plays a vital role in determining the success of your restaurant. Consider it as important as the food quality your restaurant offers. Your customers will always prefer to dine in a restaurant that is easily accessible to them.

And only if your restaurant is visible to your customers will they visit it often. It is why restaurants in primary locations like residential or commercial areas bring in more customers than restaurants in less populated areas. The location should be very clear in your head before you invest in your restaurant.

Undertake a careful analysis before deciding on your restaurant’s location. Do site visits or location visits for a better understanding of the location and people; your restaurant will be frequently visited by people residing in the said location or regularly visiting those locations.

Open a location-specific restaurant. For example, you cannot open a fine dining restaurant in a student-centric area or a cafe or fast food joint in a posh neighbourhood as there are no markets for such restaurants. Opening a fast-food joint in a student-centric area will be a good and sensible choice.

  • Poor Execution Of Concept

Most restaurants have great concepts; however, poor execution of these great concepts is where the restaurants fail. Restaurant owners are clear of the concepts in their minds and quickly jump into the restaurant business. However, the execution is not the same as the initial thought.

Planning the concept in detail is the key to executing concepts correctly. Restaurant owners must be serious planners and plan everything right from the concept, staff, and finance to dishes and location. 

They must also conduct thorough market research to ensure their restaurant concept is unique and workable. First-time restaurateurs must hire a consultant to guide them through the process.

  • Not Having A Grand Opening

Never underestimate the impact of a grand opening! Holding a grand opening for your restaurant ensures that everyone notices it; it is through a grand opening that your future customers get acquainted with your restaurant. It is the ideal way for people to know that you have entered the market. 

Organise a grand opening and lure your customers by inviting them to taste your food; you can hold a complimentary food tasting event or a promotional event where every customer receives a complimentary dish post their dining experience at your restaurant. Customers love complimentary food or free food and are likely to remember your restaurant, have a good experience and come back for more.

Restaurants with a high budget can even invite food bloggers, media or celebrities to the grand opening of your restaurants. This helps promote your restaurant and attract more people. 

  • Not Managing Restaurant Costs

Many restaurants make the mistake of not planning properly and are out of business within the first six months due to running out of finances. Restaurateurs usually forget about overhead costs, and restaurant costs must usually be checked by careful planning and intelligent execution. 

Restaurateurs also tend to overspend on high rentals, expensive decors, or higher staff at exorbitant salaries, leading to heavy financial imbalances and ultimately financial losses.

  •  Hiring The Wrong Staff

Your staff is your restaurant’s backbone and runs the entire structure. You must choose the right chef and the right serving staff, as they are the ones who run your restaurant business! Remember, the food prepared by your chef creates the identity of your restaurant. 

The chef is the soul of your restaurant and serving staff the heart. Friendly and polite staff can draw more customers than you can imagine! Customers love revisiting restaurants that offer them a great dining experience that comprises quality and delicious food along with the polite, lively and friendly staff.

  • Lack Of Menu Descriptions

Your restaurant menu is the map of your restaurant and communicates to users the dishes offered by your restaurant. Your restaurant menu must not alienate customers but acquaint them with your dishes. 

Briefly describe your items and explain if the dishes are hot, cold, spicy, vegetarian, containing nuts, gluten, or other allergy-inducing ingredients. Keep the dish names extremely simple and easy to pronounce. For example, if your restaurant serves turtle soup, you can name it Best turtle soup Singapore or Singapore Turtle soup. 

This communicates to the customers that the dish is a Singapore speciality and contains turtle as its primary element.

Conclusion

Managing and running restaurants is no joke and needs plenty of care and attention. A slight mistake can lead to disastrous results, and it is advisable to keep the above-mentioned common restaurant mistakes in mind while running a restaurant business.

Understanding these mistakes will help you make similar mistakes in the future and also help you plan strategically, which will result in a profitable restaurant business.

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