A New Restaurant

One of the warnings that new restaurant owners hear when they talk about opening their own restaurant is that it will require long hours in order to earn the mount of money you would earn in a 9 to 5 job.  Sadly, for many restaurant owners, that is very true.  Everything they own is tied up in their restaurant, and it consumes nearly all of their time.  You can see this in almost any community with independent restaurants.  They are surviving, but are they are not what you would consider restaurant success stories.
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This is a guest post from Erin at MustHaveMenus (http://www.musthavemenus.com), an online company that provides
restaurants with high quality menu designs. She blogs her thoughts on menu design trends and restaurant marketing strategies at ttp://blog.musthavemenus.com.Thanks Erin.  It’s great to get some insight from othersabout what it takes to succeed in the restaurant business.

Think a menu is just for ordering food? Think again! A menu communicates much for than just your food; it sets the tone for your customers’ dining experience.

Unfortunately, many new restaurants design their menu almost as an afterthought. I’m here to tell you that your menu should get as much attention as your dishes, the physical layout of the restaurant and your staff selections. (more…)

I heard a quote recently that was attributed to Sam Walton, the founder of Wal-Mart: — “I was asked what I thought about the recession and decided that I did not want to take part in it.”

I thought the quote was interesting, because it really goes after the issue of attitude when your restaurant is faced with difficult times.  (more…)

For most restaurants, your year is really affected by the different seasons.  It’s how well you take advantage of the different seasons that determine whether your restaurant will be a success or a failure.  Restaurant owners that are successful realize that the money they earn at Christmas will have to get them through the remaining winter months.  Restaurant owners that fail to plan for the slower periods run out of cash, and end up with cash flow problems that could cost them their business.

While the seasonal slowdown is not good for the financial health of your restaurant, it does not have to be wasted time.  One of the big complaints in the restaurant business is that there isn’t enough time to do all of the things that need to be done.  during the sower season you can be doing things that you don’t have time to do when it’s busy that can contribute to your restaurants success. (more…)

Back in 2003 chef Rocco DiSpirito commented that 9 out of 10 restaurants will fail in their first year of existence.  Chef Rocco can’t really be blamed for throwing that restaurant failure number around.  After all, conventional wisdom is that restaurants fail at a significantly higher rate than almost any other small business.  But is restaurant failure really so much higher, or is that just an urban legend?

Interestingly, an associate professor in the Hospitality Management program at Ohio State University named H. G.Parsa decided to put those numbers to the test.  He found that not only is the restaurant failure rate was wrong, it wasn’t even close to the truth.

He tracked 2,500 restaurants over a 3 year period, and found that the restaurant failure rate in the first year was only 25%.  Over a 3 year period that rate rises to 60%.  While that rate is high, it is consistent with the failure rate of small businesses in general, and certainly never comes close to the 90% that most people like to cite.

The unfortunate part is, even though other studies have supported Professor Parsa’s findings, the high restaurant failure myth persists.  Worst of all, banks use that figure when determining the loans available to new restaurant owners.  Because of the high perceived risk, restaurant owners are either denied the amount of loans they desire, or they finance less because of being charged higher interest rates.

It all leads to a nasty Catch-22; One of the leading causes of failure for small businesses is being under-financed.  Because banks are hesitant to lend to new restaurant owners, or lend at higher interest rates, many new restaurants are opened with less financing than they really need to survive.  This leads to restaurant failure, and helps to keep the myth alive.

What this means for you is, if you are thinking about opening a restaurant, don’t let the misinformation about high failure rates scare you away.  It is risky, but so is opening any small business.  You can succeed if you follow sound business principles.  Read my article on Top 5 Reasons Restaurants Fail for more information about what it takes to make your restaurant a success.

If you are a follower of the Bravo show Top Chef, you got to see first hand a lesson in what happens when you don’t follow your own vision.  In the season finale Carla was paired with previous Top Chef contestant Casey Thompson.  Casey made several suggestions which Carla took, even though it was not the style of food that got her to the finals.  The end result was that the meal was a failure, and it ultimately cost Carla the title of Top Chef.

Since the airing of the final episode, there has been a lot of debate over who was to blame, (more…)

A while back I wrote an article titled Top 5 Reasons Most Restaurants Fail.  In that article, one of the reasons I gave was that great recipes are not a recipe for success.  While it is true that good food alone will not keep your restaurant off of the failure heap, you can not afford to overlook the importance of serving a great meal.

When you strip away all the bells and whistles of any successful restaurant, it all comes down to food service.  After all, this is a food service industry.  Yes, there are other important factors to consider when starting and operating your restaurant, but none of them can overcome bad food.

You should still make sure you pick a good location for your business that is easy to see and easy to get to.  You should make sure your staff is trained on how to do their jobs.  You should make sure that your staff has an outstanding customer service mind-set.  these are important, but if the food is not good, there won’t be any customers to worry about.

One reason restaurants fail is that the owners and managers lose focus on the food.  Face it, if the food isn’t good the customer will not see it as a value regardless of the cost.

Focus on the food first.  Don’t let poor quality lead to you restaurant failure.