Help – My Restaurant is failing

help my restaurant is failingHelp – My Restaurant is failing

Help my restaurant is failing – The failure rate for a declining restaurant is very high. In fact, in their first year, 30% may fail or change ownership. After three years, that number jumps to 60%. Yes, this percentage is very high, but it’s on par with the average success rate of any restaurant or other small business.

There are many reasons why restaurants fail.

  •  Bad Location or Wrong Style for the Location
  •  Menu Issues
  •  Poor Food, Alcohol & Labor Controls
  • Lack of Management and Staff Training
  • Inconsistent Food Quality and Presentation

Restaurant Location

Plan the location of your restaurant based on the community and your style of restaurant. Look at the nearby roads and the amount of traffic. Do you know the local residents and businesses? How does that fit with the theme of your restaurant?

Seek out the type of other restaurants and bars in the area. Do you offer something unique that will draw in and keep customers happy?

If you are stuck in your location, then consider what changes you need to make to attract area customers. If you are in an area with lots of businesses, learn about their employees and customers. Consider how they take lunch breaks. Is your location ideal for work breakfasts, lunches or dinners? Are you located near a college campus or young community? Learn what they are looking for by studying the location.

Help – My Restaurant is failing

Plan your Menu

Create the menu based on what your customers want to eat. This involves knowing the location as stated above. Are there five pizza shops within five square miles? Then another pizza shop probably is not ideal for that area.

You should know what is within five to ten miles of our location. What do they serve? Who are their customers? Are the other restaurants missing a certain population you can cater to? If you have lots of Baby Boomers you’ll need to have a different menu than you would for Millennials.

How big is your menu? A menu with too many items leads to higher food costs because you need a bigger food stock and have a greater chance for spoilage. Focus on certain foods. Introduce new items by a chef’s special or use up extra stock on the specials.

The menu is the critical selling point. All employees need to know the menu and the features of each food.

Food, Alcohol and Labor Controls

Food, alcohol and labor percentages differ for every type of restaurant. A profitable restaurant typically generates a 28%-35% food cost. Coupled with labor costs, these expenses consume 50%-75% of total sales. Because of the impact food cost makes on an operation, food cost is one of the first things we examine at a troubled property.

Food Costs

Along with the menu importance to food costs, you need to be in control of everything. It is important to do inventory and maintain the proper amounts of each product. Using an inventory management system and also regular use of par sheets helps maintain your food costs.

Alcohol Costs

Also, maintain control of your alcohol inventory and maintain control of costs. Your bartenders must properly measure and portion alcohol. Portioning too much alcohol will cause you to lose money. However, portioning too little alcohol can lead to dissatisfied customers. Make sure your bartenders are properly trained on how to make different drinks.

Labor Costs

In addition, keep the proper level of employees on duty for the business at that time. Not only should you maintain the number of employees. Set up the schedule based on employee strengths and the number of customers. There are great resources to keep track of customer counts and menu cost averages per customer. Use those to keep your labor under control.

Help – My Restaurant is failing

Management and Staff Training

Does your restaurant have a training program staffed with certified trainers? Always train the trainers. Manager and each position require certified trainers. Of course, these trainers know the procedures and policies of the company and the positions. These trainers need to be highly trained and held to a higher standard.

Buy or create training manuals used for quality training for both management and staff members. We have some great training manuals on our website.

Food Quality and Presentation

Flavor and quality play a huge role in a great tasting food served fast. When prepping food always be consistent in measurements, spices, the flow of cooking and final presentation.

In addition, all staff needs to know the menu. Training on the menu should be included. Recipes need to be consistent between kitchen staff. Each cook needs to know the recipes, including how to plate and present the food. Customers expect a certain standard. Consistency will keep customers coming back for quality food.

Help – My Restaurant is failing

In Conclusion

A successful restaurant takes pride in achieving benchmark goals and dedication. A successful restaurant maintains food and labor controls. A successful restaurant creates a simple menu to help manage food cost along with creating the menu based on what the neighborhood wants. Plan everything in moderations. Dot all the I’s and cross your T’s. If you need guidance, contact a restaurant consultant and/or visit

One of the best ways to help organize restaurants and bars is by using restaurant forms, checklists, spreadsheets and training manuals. To learn more about these and other resources,visit; or

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