7 Reasons Restaurants Fail and How to Ensure Yours Doesn't

1. 4/4/22, 12:29PM 7 Reasons Restaurants Fail and How to Ensure Yours Doesn't - EatanceApp  7ReasonsRestaurantsFailandHowtoEnsure YoursDoesn’t MaulikPandya Updated on : December13, 2021 Runningarestaurantisatoughbusiness.60%ofrestaurantsfailwithinthe firstyear.Moreover,80%ofrestaurantsshuttheirbusinessbeforetheirfifth anniversary. Wedon’tmeantodiscourageaspiring(andcurrent)restaurateurs.But,we believetakingpreventivemeasuresbeforehandisalwaysabetteridea. Bylearningthecommonpitfalls,youcanmaketherightdecisionstoprevent your restaurant fromfailing. WhyDoMostRestaurantsfail? https://eatanceapp.com/blog/7-reasons-restaurants-fail-and-how-to-ensure-yours-doesnt/

2. 4/4/22, 12:29 PM 7 Reasons Restaurants Fail and How to Ensure Yours Doesn't - EatanceApp Whilethereareseveralreasonswhyrestaurantsfail,herearethetopones: BadLocation The location of your restaurant plays a crucial role in its success. To increase thechancesofsuccess,youwillneedaneasy-to-findlocation,ampleparking space,andtheareamustbepopulatedenoughtogeneratefootfall. However,goodlocationscomewithapremiumprice,andmostrestaurants areunabletocoverthecosts(especiallyinthefirstfewmonths). HowtoAvoidThisProblem? Onewaytoavoidthisproblemisbyfindingalocationwithlowrent.This couldtaketime,butitwillminimizetheriskoffailureinthelongrun.Also, makesureyourlocationisclosetoyourtargetaudience. Forinstance,ifyourprimarytargetaudienceisuniversitystudents,openyour restaurantinanareawheretheyhangout.Then,visitthemarketacoupleof timestounderstandthespendinghabitsofpeoplefrequentingthearea.This willhelpnarrowdownyourchoices. Another great way to avoid this problem is by offering online ordering services.Evenwithagreatlocation,onlineorderingcanbringcustomerswho cannot visit your restaurant frequently or stay far from you. This will help you expand your customer basequickly. Butremember,tomanageonlineordering,youwillneeda RestaurantWebsiteDesign.WithEatance,youwillgetyourownrestaurant website and restaurant mobile app that your customers can use to place foodorders.Eatancealsoallowsyoutocreateacustomizabledigitalmenu for online ordering, accept orders, manage delivery charges, and analyze your restaurant’sperformance. Poor CustomerExperience Whileyouneednewcustomerstogeneratecontinuoussales,retainingthe existing ones is equally important. Old customers will return more often to yourrestaurantandmightevenbecomeyourbrandadvocates(andspread theword). https://eatanceapp.com/blog/7-reasons-restaurants-fail-and-how-to-ensure-yours-doesnt/

3. 4/4/22, 12:29PM 7 Reasons Restaurants Fail and How to Ensure Yours Doesn't - EatanceApp However, poor customer experience will almost certainly guarantee that the customerwillnotreturn.Theymightevenenduppostingnegativereviewsof your restaurant on major digital platforms (Google, Yelp, TripAdvisor, and social media), which can damage your brand reputation and deter away potentialcustomers. Apoorexperiencecouldhappenbecauseofavarietyofreasons,including Badtaste Delay or mix-up inorders Rudesta Long waiting times (to get atable) A weird smell or loudmusic HowtoAvoidThisProblem: Itisimportanttodeterminethereasonbehindthepoorcustomerexperience. Forinstance,ifyou’rereceivingseveralreviewsstatingthatthetasteisnotup to the mark or it takes a lot of time to get food served, etc., figure out the reason behindit. Youcanpreventissuesrelatedtodelayinorderbyemployinga restaurantfoodorderingwebsitelikeEatancethatsendstheorderinstantly to the kitchen. This helps reduce the service time and improve the table turnoverrate. Additionally,trainyourstafftohandlecustomers(eventheangryones).A https://eatanceapp.com/blog/7-reasons-restaurants-fail-and-how-to-ensure-yours-doesnt/

4. 4/4/22, 12:29 PM 7 Reasons Restaurants Fail and How to Ensure Yours Doesn't - EatanceApp well-trainedstaffnotonlytreatsthecustomersrightbutalsoensures everythingrunssmoothly,therebyenhancingthecustomerexperience. Inexperience Whilethere’snoeducationorworkexperiencerequiredtoopenarestaurant, havingrobustknowledgeaboutitisamust. That’sbecauselackofpropermanagement,financialplanning,andpoor business understanding among first-time restaurateurs are some of the primary reasons why restaurantsfail. HowtoAvoidThisProblem: Researchasmuchaspossible.Watchvideosrelatedtorunningarestaurant, readblogs,andtalktopeoplealreadyinthebusiness. Depending on your budget, you can also hire someone who has prior experienceinmanagingarestaurant.Thiswillhelpyougetthroughthefirst fewmonthsofthebusinesssmoothly. Also,itisgreattohaveabusinessplanforuptoatleastsixmonthsdownthe line. But, stay open to changes and optimize your plan based on real-time scenarios. Poor ResourceAllocation Knowinghowmuchyou’respendingeverymonthonyourrestaurantisthe keytoimprovingprofitsandpreventingfailure. However,poorresourceallocationisoneofthemostcommonreasonsfor the failure of restaurants. While spending on the furniture, ambiance, and staffisimportant,youneedtostaywithinyourbudgettostayprofitable. Youalsoneedtoconsiderthenumberofpeopleyouhire.Forinstance,ifyou hire more people than you need, you will see a significant amount of your profitgoingintoyourstaff’ssalary. Also,minimizewastagebylimitingyourspendingonrawmaterialsthatare not beingsold. Tip:Youcanalwaysaddnewitemsasyourrestaurantgrows. HowtoAvoidThisProblem: Allocateabudgettoeveryaspectofyourrestaurant(rent,ambiance, https://eatanceapp.com/blog/7-reasons-restaurants-fail-and-how-to-ensure-yours-doesnt/

5. 4/4/22, 12:29 PM 7 Reasons Restaurants Fail and How to Ensure Yours Doesn't - EatanceApp furniture, staff, and raw materials). For example, you can hire temporary workersonbusydayssoyouwon’thavetopaythemtositidleonother days. Additionally, use the Eatance Restaurant POS System to determine which dishes are popular and which ones don’t generate enough sales. Then, optimize your spendings on raw materials accordingly. Eatance also has a contactless dine-in feature (in the Pro version). It allows customers to scan themenuandplaceorders,helpingyoureducethenumberofstaffinyour restaurant and boostprofit. Little to NoMarketing Of course, established brands can run successfully with minimum marketing, butmarketingisamustfornewrestaurants.Ithelpsreachpeoplewhowould otherwisebeunawareofyourrestaurant. However, with so much already on the plate, many restaurateurs tend to focusmoreonrunningthebusinessthanadvertising.Asaresult,theysee fewerorders,eventuallyleadingtofailure. HowtoAvoidThisProblem: Set aside a marketing budget for your restaurant. If you don’t have the time orexpertisetopromoteyourrestaurant,considerhiringsomeonewhodoes. The marketing activities should focus on reaching as many people as possibleatminimalcosts.Forinstance,youcanrunFacebookandInstagram adstoreachpeopleatmassesinyourarea.Thiswillgiveyoumuch-needed brandawareness. Butdon’tstopatthat.Youalsoneedtoattractcustomersorganically.Youcan do that by posting mouth-watering pictures of your popular dishes, showing theinteriorsofyourrestaurant,andhostingsocialmediacontests. Aswithotherbusinessstrategies,ittakesalotofplanningtosucceedin restaurant marketing. And, it always proves fruitful in the long run by driving more sales and preventing restaurantfailure. Not TrackingPerformance As a restaurateur, you need to track the performance of your restaurant everyday.Withoutthis,youwillnothaveafairunderstandingofwhether your business is in pro t or loss. Reports also help determine thereason https://eatanceapp.com/blog/7-reasons-restaurants-fail-and-how-to-ensure-yours-doesnt/

6. 4/4/22, 12:29 PM 7 Reasons Restaurants Fail and How to Ensure Yours Doesn't - EatanceApp behind theperformance. However,mostrestaurateursareoccupiedsomuchinday-to-dayoperations thattheytendtoforgettotracktheperformance. HowtoAvoidThisProblem: Nomatterhowbusyyou’reorbigyourrestaurantis,youneedtodocument all business transactions (income and expenses) to avoid failure. You also need to review those documents every day to ensure you don’t miss anythingandthatyourrestaurantisgoingintherightdirection. Forinstance,comparewhyyoureceivedfewerordersthanyesterday(orthe same day last week). This will help determine potential reasons people are not frequenting your restaurant. This, in turn, will enable you to take preventive measuresbeforehand. Eatance offers a robust analytical dashboard that provides in-depth information on your restaurant’s performance. It also displays when and whichordersarethemost&leastpopular,enablingyoutomakesmarter decisionstogrowyourbusiness. 7. ImproperPricing Pricingtheitemsiscrucialfortherestaurant’ssuccess. Youpriceittoohigh,customersmightnotorderit.Youpriceittoolow,your profitmargincouldtakeahit. https://eatanceapp.com/blog/7-reasons-restaurants-fail-and-how-to-ensure-yours-doesnt/

7. 4/4/22, 12:29 PM 7 Reasons Restaurants Fail and How to Ensure Yours Doesn't - EatanceApp Andthat’sfordishesthatgetsold.Unduewastagealsoresultsinhighfood costs, leading tolosses. HowtoAvoidThisProblem: Sit with your chef to create your menu. Design it in a way that you use the sameingredientsinseveraldishes.Thiswillminimizewastageandprevent losses. You can create customizable menus using the Eatance restaurant food orderingwebsite. And as mentioned above, analyze your restaurant performance to identify andremovedishesthathavehighpreparationcostsandarenotgenerating enough sales. This would help you optimize your menu in a way that it has itemsthatyourcustomerslovetospendon. Conclusion Alotofplanning,execution,andoptimizationgoesintorunningarestaurant successfully. Begin with choosing the right location. Then, enable online ordering,ensurecustomersatisfaction,andgetyourpricingright. Also,don’tforgettoleveragetheEatancerestaurantfoodorderingwebsite to track your performance, create customizable Restaurant Digital menus, and improve customerexperience. MaulikPandya Updated on: December 13,2021  I am a lifelong analyst and founder of Evince Development& Eatance. This incredible life has provided me ample opportunities to explore Coding, Business analysis, Enterprise Solution Provider, Project Management, Sales Consulting, Marketing, Operation management, Talent acquisition, Mentorship and being a Leader. Apart from my professional life, I am a good husband, father of two beautiful daughters, a Generous friend, Garba lover, Zumba enthusiast,a https://eatanceapp.com/blog/7-reasons-restaurants-fail-and-how-to-ensure-yours-doesnt/

8. 4/4/22, 12:29 PM 7 Reasons Restaurants Fail and How to Ensure Yours Doesn't - EatanceApp blogger and a helping hand toeveryone. https://eatanceapp.com/blog/7-reasons-restaurants-fail-and-how-to-ensure-yours-doesnt/