Failure is not uncommon in the restaurant business. After all, sixty per cent of newly opened dining establishments tend to close down within their first year of operations. And an additional twenty per cent on top of that are unable to sustain themselves after their fourth year. Fortunately, there are ways to survive and even achieve the desired growth and success amidst this highly competitive industry. To this end, here are just some of the most common mistakes that you should avoid when starting a restaurant.
- Don’t choose a poor location
Let’s face it, the success of any restaurant often hinges on its site. After all, it’s a lot easier to get more business going if the dining establishment is situated in an easily accessible place. And there’s hardly any point in renting out a property in a quiet area with little to no foot traffic, even if it’s cheap since it will be much more challenging to guarantee sales. So don’t just pick a spot based on price alone but rather by the environment’s profit potential. Not only will it allow you to increase your revenue, but it will also help avoid struggling with securing your target customers too.
- Don’t be inconsistent with your marketing efforts
Having a dining establishment that is positioned in a prime location can go a long way toward generating a lot of business for a restaurant. However, area alone can only go so far toward maintaining customer interest. As such, it’s crucial to stay consistent with your marketing efforts. From generating awareness through social media or offering money-saving discounts, a continuous advertising strategy will not only help build exposure for your restaurant, but it will also allow you to create a loyal following that will keep existing customers coming back for more.
- Don’t spend without shopping around first
No matter the industry, it’s impossible to guarantee sales, and restaurant businesses are no exception. And one of the most effective ways of keeping your fixed costs as low as possible is by shopping around first before spending your money. From the various equipment that the dining establishment requires to function to ingredients like glace fruit that you need for the dishes offered, time and effort invested in research can make all the difference in maintaining reasonably low expenditure.
- Don’t be without a financial cushion
Success in the restaurant industry isn’t just about generating a lot of business but rather sustaining operations even through off-seasons and slow periods. As such, it makes sense always to have a financial cushion in place. After all, it serves as a contingency in the event that the desired numbers aren’t met and will keep the dining establishment afloat in times when it is unable to yield the revenue that it needs.
It’s not an easy task to achieve success in the restaurant industry. But by avoiding all of the mistakes listed, you’ll have a greater chance of meeting the desired profit margins and save yourself a lot of headaches in the process too.