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7 Common Mistakes Restaurants Make That Doom Them To Fail

What you do best is run your restaurant. And although it’s what you love, it’s often so chaotic you don’t have the time, energy or expertise to evaluate what you’re doing well and what you can improve in order to increase profits.

restaurant employees

Some restaurants are often stuck in this endless cycle of doing the next thing without having any strategy behind why they’re doing it – they keep approaching things one way because that’s the way it’s always been done. When this perspective eventually leads to the restaurant’s doors closing, the owners, operators, chefs and staff are fittingly left wondering what happened.

Maybe you’ve just started a restaurant, or maybe you’ve been in the industry a long time. Wherever you are on the scale, here are seven common mistakes restaurants make that will help you avoid pitfalls and run a successful business.

#1 Not Understanding Food Spend
You can see your food spend directly compared to your profits. You know how much you’re spending week by week on each item you order. Supplier prices are readily available and you try to make the best purchasing decisions balancing cost and quality among supplier options.

If this doesn’t sound like you, then you probably don’t understand your food spend and how it’s affecting your restaurant.Without a proper perspective of your food costs, you can’t price your menu appropriately. And that could be the make-it or break-it point for your restaurant.

Avoid this mistake by tracking your food spend, as well as your food sales. With this information, you can make better decisions about how to price dishes and whether to add or take away menu items.

Don’t let suppliers take advantage of you. Know from week to week what you are paying each supplier in order to get the best deal. You can do this using something as simple as an Excel spreadsheet, but you can also use apps and software to do the same thing online and in less time.

#2 No Passion for the Business Side of Things
Ahh, that moment when your specially-crafted dish goes out the kitchen door for the first time. You hear the raving reviews from patrons and you can’t help but feel your passion for creating extraordinary dishes fire up.

FrustratedOwner

It’s a common feeling among chefs. What’s less common in restaurants with these passionate chefs is someone with the business skills to make sure that passion translates into profits. Both skills sets are integral to the success of any restaurant, which just means you have to make sure there is someone on your team who’s dedicated to operating and managing your business expenses and accounting. Someone needs to keep an eye on your food and labor spend compared to sales, organize invoices, track credits from suppliers, and review schedules.

If the business side of running a restaurant doesn’t appeal to your strengths, it’s a good idea to seek help in that area. Or if you can’t afford to hire someone, there are specialized restaurant accounting, front-of-house, and back-of-house technologies to help you ease the stress of everyday operations.

#3 Forgetting About Hospitality
Mistakes will happen at your restaurant; everyone is human. Dishes will leave the kitchen burned, a hair will show up on a plate, or the wait-staff will break a water glass in the cooler while trying to get ice.

The most important part is how you respond to these issues. The correct way is to address these mishaps directly and right away. Patrons can easily turn from dissatisfied to lifelong evangelists if you take the time to acknowledge your weaknesses or failures and make it right. Creating consistent policies and procedures to uphold the hospitality part of your business is a must.

#4 Addressing Poor Management
Successful restaurants run like a well-oiled machine. Front-of-house, back-of-house, chefs, owners – they all act as a familial support system for each other. Unfortunately, a lot of restaurants don’t have this team culture. Often you can point the finger at lack of management skills in your team leaders.

If a restaurant manager isn’t passionate about what he or she is doing, doesn’t take the time to hire hard-working and talented staff, and isn’t dedicated to seeing the restaurant thrive, then he or she got into the business for the wrong reasons.

Whether you’re looking to hire a restaurant manager or you want to become one, understand dedication to growing a healthy team and passion for the food industry comes first. The amount of money you take home depends on how well you can manage your team and create a hospitable, welcoming atmosphere.

#5 Poor Scheduling Skills
Although it would be easy to set standard schedules for front and back-of-house, the restaurant industry doesn’t support this kind of traditional scheduling. After all, sales and customer volume can change every week. Schedules must be created each week based on those variables so you don’t waste money or your staff’s time.

If you’re costing out your schedule, you’ll be able to form a daily and weekly labor budget.You can then compare weekly sales to your labor costs for the same period, which will give you a picture of where you need to add or take away hours on the schedule.

#6 Lack of Online Marketing
How do most consumers decide what restaurant they’re going to go to? More than likely, they’ll search using Google. You can take advantage of this behavior by prioritizing your restaurant’s online presence.

How to Pay for Your Marketing

First, make sure your restaurant website is legible… not only on a desktop or laptop, but on a phone and tablet, too.

Invest in breathtaking restaurant interior and food photography to dress up your restaurant’s website. Images are more powerful than words, so make sure yours reflect the welcoming atmosphere of your restaurant and draw customers in.

Next, do some research about search engine optimization and social media best practices to make sure people are finding your restaurant when they search for the type of food you serve and the area you’re located. If you can’t devote the time, an ad agency might be your best option.

Finally, ask patrons to recommend you or leave comments about your restaurant on OpenTable and Yelp so prospective customers who are searching on those sites can find you. Word of mouth marketing is the most powerful type of marketing, and that’s what these online review sites provide.

#7 Inconsistency
Producing food that’s consistently phenomenal is one of the most important parts of running a restaurant and developing a loyal customer base.

We all know when it’s slow, more mistakes tend to happen. Make sure no matter how busy – or not – your restaurant is, the staff is dedicated to producing the same quality of dishes. The slow Tuesday night steak should be just as great as the busy Saturday night steak. This attention to detail and quality will separate your great restaurant from the “meh.”

Another huge point is holding your suppliers accountable for the product they send you. Nothing is worse than anticipating a busy night and an incomplete delivery at the back door makes you have to “86″ one of your most popular dishes.

Track items received at the door against your order to give yourself time to react and get product before service. At a minimum, keep track of the credits owed to you due to supplier mistakes and ensure suppliers make good on those I-owe-yous.

Source: Orderly.com; by Joy Ugi

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