Most Restaurants Fail

It is a commonly held belief that as many as 90% of restaurants fail in the first year. Skeptics of this tend to believe that this is simply not true and is closer to 60% in the first year and 80% by year number three. You say potatoe, I say potato, the numbers can be debated. The undeniable fact is that the majority of new restaurants fail. The exact number is just splitting hairs.

Here are a few reasons new restaurants fail.

1. Not enough cash;

Make sure that you have reserve money available. It’s better to setup lines of credit, credit cards and loan provisions BEFORE you actually need it. If you run tight on cash, your staff won't take "I owe you" for a paycheck, neither will your supplier take "I’m out of cash" in trade for supplies. Just like you wouldn’t agree to "Can I pay you Tuesday for a hamburger today?"

2. Bad Hiring;

Ever meet someone who absolutely hates their job? Do you really want to be around them? Your customers sure won't. Hiring staff in a hurry usually leads to hiring bad staff. Disgruntled, unmotivated staff will not go the extra mile that is needed for your business to survive. Be a good boss, treat your staff right, regardless if the business is making money or not.

3. Out of control expenses;

Having your till ring is a great sound. But always remember: "The amount of money coming in is harder to change than the money that goes out." If a product doesn't sell and keeps spoiling, get rid of it. Make sure you have cash controls with all staff that are around cash and be wary of insider theft. Insider theft accounts for eight times as much loss as that stolen by your customers and strangers.



Most restaurants fail, but keeping your cash flowing, your staff happy and your expenses in line will hopefully help you be one of the success stories. The other biggest reason most restaurants fail is that the owner isn’t aware of a few newer ways to attract and retain more customers. Without a steady flow of new, and return patrons, most restaurants fail!

Unfortunately, there aren't any college courses on "How To Start A Profitable Restaurant". (And if there are, they are probably taught by someone who's never owned a restaurant!) The statistics don't lie. Most restaurants DON'T stay open a year! I got extremely frustrated seeing unsuspecting new owners lose their dreams (and their shirts). Sometimes it's just a lack of good information that causes their businesses to fail and a great amount of personal heart break!

I have written a special email report in hopes that it might stop the growing statistics of new restaurant failure. So, before you spend your hard earned money acquiring and opening your restaurant, I urge you to read my FREE report "The Restaurant Industry's Dirty Little Secrets. Get your copy of this report today click here to get your FREE report!

There are a lot of successful restauranteurs. There is a HUGE number of well meaning, hard working rookie restaurant owners who simply aren't aware of the "insider secrets" to creating a profitable restaurant. One particular event caused me to sit down and write out this information. To read more about the event click here

Today's Independent Restaurant Business Tip

for . Make a point of scheduling a check of all lighting, (IN and OUT)! Some owner operators get so tied up inside their restaurant that they never take a stroll outside the building. I recall one marginally successful restaurant that had many lights out on their front sign for years. The owner always drove in the back alley and never walked outside at night time. You must try to keep a "critical" eye and see your restaurant as your customer does! (They aren't in the kitchen the entire time ;-))

Testimonial

Hello Patricia
I read your information in one sitting. I understand that many of your insights are simply common business sense. After reading your book I realize that most restaurant owners simply aren't apply these principals to their businesses. Thanks for the perspective.
Sincerely,
Gabby P.