Your culinary prowess is the stuff of legend. You have friends, relatives and colleagues who still talk about the dinner party you threw 8 years ago or the lasagna you cooked last year. The recipes in your repertoire have been handed down from generation to generation. They brought you pleasure and comfort in your formative years and it’s been a source of enormous pleasure to see others benefit from those same recipes. You heard the same sentiment echoed over and over again throughout the years…
“Why haven’t you opened your own restaurant?”
Then one day you thought…why not? It wasn’t easy. Raising the startup capital was a challenge and your limited budget meant that you had to sacrifice some of the flourishes that would have made things extra special. Nonetheless, despite several experiences that almost resulted in nervous breakdowns you finally got your restaurant up and running. You did everything right. You did some grassroots marketing and generated enough buzz that your opening was a real success of such magnitude that it surprised even you. But in the ensuing months, business has become quieter and quieter. Custom is dwindling and yet the bills still keep coming in. If you don’t do something soon your business could end up becoming one of the 60% of restaurant businesses that goes under within its first year. Needless to say, identifying the cause and finding out exactly where you may be going wrong is of paramount importance. Here are just a few of the reasons why your restaurant may be failing (and what you can do about it)…
You’re spending too much time in the kitchen
Of course, this whole enterprise exists solely because of your culinary skill and creativity. And it’s absolutely true that the family recipes that were the backbone of your menu are a big part of what gives your business its Unique Selling Proposition (which is extremely important in a small business). It’s one thing that no other restaurant can replicate or imitate. But if you’re precious about these recipes or refuse to entrust them to your kitchen staff, inevitably your restaurant will suffer.
You’re more than just a chef now, you’re a CEO and you need to start thinking like one. Get out of the kitchen and into your office. Hire a bookkeeper to collate consumer data upon which you will build and adapt your business strategy. Find out what’s selling and what isn’t, what’s causing food cost to escalate and waste to spiral out of control. This data is gold to a savvy entrepreneur but unless you take some time away from a hot stove, you won’t be able to learn anything from it.
Your menu is too diverse
If you’re familiar with the TV show Ramsay’s Kitchen Nightmares you’ll have seen some of the uncompromising language Scottish celebrity chef Gordon Ramsay uses in his criticism of ailing restaurant businesses. Very often they’ll be restaurants just like yours who have a great product and a whole lot of passion behind them but are failing nonetheless. While the restaurants may be wildly different every time there’s one criticism that keeps coming up time and again… The menu is too big and too diffuse. While choice may seem like an appealing thing to be able to offer customers, too much diversity can be off putting. Moreover, it requires you to invest more money in inventory and increases your chances of food waste exponentially. Keep your menu tight and pare it down to only your best sellers and your profit margins will rise. You’ll also find that efficiency and productivity go up in the kitchen, too.
It’s completely understandable that you may want to keep overhead costs manageable, there’s real danger in under investing in your business. Personnel in particular is an area in which it takes money to make money., Formidable as you may be, you’re not a one woman army and trying to manage too much on your own can lead to mistakes, muddled orders, long wait times and a whole host of other issues which do not make for happy repeat customers.
Moreover, the more you try and take on all the facets of running a restaurant by yourself or with a skeleton staff the more risk you take of burning out which will benefit nobody, least of all the customers on whom your business is reliant. Staffing issues lead to yet more mistakes, more long waits and more less than favorable reviews that don’t reflect the quality with which you want your brand to be associated.
You haven’t responded appropriately to bad reviews
Every small business dreads seeing bad reviews pop up on Google maps, Trip Advisor and the like. But the one thing you can’t afford to do in the face of a negative review is bury your head in the sand. A bad review is like an uncovered wound. The more you ignore it, the more chance there is that it can fester. There’s a correct way to deal with bad reviews which can at worst mitigate the damage and at worst turn a disgruntled customer into a happy and loyal brand advocate. Treat a bad review as a potential learning experience and use it to improve your service. Respond to it in a timely manner and invite your critic to give you a second chance on the house. Sure, your profit margin may take a slight hit, but if there’s a chance that the customer will return, it’s worth it.
You don’t incentivize repeat customers
Regular customers are great. You know what they like. They know what they like. They’re easy to deal with, they come in regularly and they tend to say lovely things about your business. But beware. Becoming overly reliant on your regulars can inhibit your growth and leave you in the lurch if they should move or simply start to frequent one of your competitors. Your customers could be the key to expanding your reach. Incentivize them to bring their friends and relatives with freebies or special discounts. Instigate a rewards policy where customers dine for free or get free drinks if they rack up enough visits.
Only by getting to the roots of the cause and meeting them head on can you bring an ailing restaurant back to full health.