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!

The statistics don't lie!

Most new restaurants don't survive a year! A little insider information might be ALL that is standing between a profitable restaurant, and becoming another unfortunate statistic!

Before you spend a small fortune opening (or buying) a restaurant, I suggest you read my FREE report I've titled "The Restaurant Industry's Dirty Little Secrets. To get your free copy of this insider information click here to get the report!

There was a single, unforgetable event that made me mad enough to sit down and write this. It is my hope that another rookie restaurant owner won't lose their dream due to a lack of good information. To read more of that story click here

Today's Independent Restaurant Business Tip

for . Have a small toolbox handy! Many first time restaurant owners haven't considered that things break or stop working. And, of course, they always break during the busiest times. Make sure you have an assortment of tools handy so you can "MacGyver" whatever needs to be done until you have time to fix your restaurant equipment properly. It's really hard to undo a screw with a restaurant kitchen knife!

Testimonial

Hi Patricia
I had to email you and tell you that your insight saved me from a $40,000 mistake.
Thanks,
Sheryl Gundham