Ever Thought About Opening a Restaurant? Read This…

Five Common Mistakes Restaurant Owners Make

The restaurant industry is no walk in the park. Statistics aren’t kind to restauranteurs looking to make it big in this competitive sector; 60% of restaurants are failing within their first three years, a number that jumps to 75% after the first five years. Despite these terrifying numbers, hopeful investors come out in droves each year to put their stake into a foodie idea they believe can go the distance, and if they succeed, the profits can be vast.

  1. No Business Acumen

You might be a great chef, but if you don’t have the business savvy to back it up, you won’t succeed. Plenty of folks out there have culinary skills, but you need a lot more than that to make a successful restaurant. You’ll need to have budgetary skills, understand the competition, and know how to market your brand, invest your profits, and manage a staff. If you can’t do all of these things yourself, you’ll need to be able to pay the people who can (and find individuals you can trust). Cooking skills and a brilliant idea are only a small portion of the battle. There are avenues through which you can achieve all of these facets, but they don’t come cheap. You can have a company like BusinessPlans.com draft your business strategy, achieve funding through a P2P lending site like Prosper, and speak with a financial advisor, but you’ll still have a bevy of things to worry about even with these important aspects settled.

  1. An Expansive Menu

Large menus are a huge deterrent to customers, and restaurant owners often make the mistake of compiling menus that lack focus. If your customers are confused by your offerings, they won’t understand what you excel at, and will have a harder time recommending your eatery to their loved ones. The longer your customers take to choose from your menu (a much harder feat if you’ve included a multitude of offerings), the more money you lose, as they’re taking up valuable seats without spending money. Additionally, the more items you have on your menu, the more ingredients and inventory your business will require.

  1. Forgoing a Unique Selling Point

Delicious food should be enough to fill your restaurants with hungry patrons day after day, right? Unfortunately, that’s not the case, and many restauranteurs have discovered this the hard way. To stand out from your competitors, you need to forge an exceptional selling point. This might be the atmosphere in your restaurant, your slogan, your customer service—this list goes on. Each and every successful restaurant has a distinctive selling point, and a simple look at the thriving restaurants in your area will give you examples to draw from.

  1. No Marketing Prowess

You might think that word of mouth about your amazing dishes will do the marketing trick, but failure to market your restaurant correctly is one of the main reasons restaurants fail these days. Recommendations are wonderful and definitely an important facet of the process, but verbal marketing can only go so far. There are plenty of restaurants for hungry patrons to visit, and if you want to compete, you’ll have to make sure potential customers know about you. Even if you serve the best lasagna your state has ever seen, if nobody knows about it, you’ll fail. If you have no idea what you’re doing in the marketing realm, make sure you hire a restaurant marketing company that can kind you through the process. The investment in these types of services is more than worth the return you’ll get when customers start pouring in.

  1. Forgoing a Liquor License

Some restaurant owners elect not to serve alcohol at their establishment, but this can be a costly mistake that loses customers. Serving drinks allows for large profit margins, as many restaurants find a substantial portion of their income is from alcohol alone. Another reason is simply customer desires. Many restaurant goers want to have a drink alongside their meal, and your inability to fill this want will see many customers choosing to eat elsewhere. There are disadvantages to selling alcohol on the premises; you’ll have to finagle hard to find liquor licenses in your area, which usually requires utilizing a brokerage service like License Locators, Inc., as states and counties alike have a set number of licenses available, meaning most are already spoken for. You’ll also need to deal with local permits and regulations, and deal with the unsatisfactory side effects that can come with intoxication. There’s no denying that serving alcohol comes with its fair share of risks and challenges, but the numbers don’t lie, and liquor could be the key to higher profits for your restaurant.


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