Why we die
90% of restaurants fail within the first 5 years. 3 in 5 restaurants will close or change
ownership within 3 years of opening. There are many opinions about why this happens.
Celebrity chef Robert Irvine hosts the TV show Restaurant: Impossible. Jon Taffer offers his
professional expertise plus renovations and equipment to desperately failing bars on Bar Rescue
in order to save them from closing. Anthoni Malchiorri explains what hotel operators must do when
business is struggling. There are many successful shows that offer opinions on
why and how this happens. Here are some of the top reasons;
Many of the owners being rescued on these shows are well meaning, but inexperienced.
They don't know that they don't know. The host of the show points out what they are missing and
then sets out to help them fix it - hopefully before its too late.
Inconsistency is the death of the hospitality industry. Guests expect a great experience on
every visit. Yet inconsistent service or food quality is a common failure in hospitality. Owners fly
by the seat of their pants and do not instil the systems that are required for consistency. The
success depends on who is cooking or who is working. McDonalds did not become the number 1 fast
food franchise by flying by the seat of their pants. In fact, franchises succeed because they have
proven systems that work. Without systems, the hospitality industry will consume you as an owner.
Bad People Management
Restaurants and hotels have a ton of constantly moving parts and a diverse set of people working
within them. Many generations of workers are in this industry, each with different motivations
and expectations. It is traditionally an extremely high turnover business that demands managers with exceptional
motivation, coaching and mediation skills. Overlooking what your people are doing will sink your business quickly.
Lack of accounting skills
Owners who do not have the tools or the skills to know the numbers will not succeed in this business. Focusing
on bringing more customers into your establishment when your food cost is too high means you are losing more money
even faster. What is the effect of discounting? What are the numbers to watch? What are the numbers telling you?
Many owners do not know the numbers.
Owners and Managers Not Present
Charles Stiles of the Food Network's Mystery Diners captures on video what is happening in restaurants that
the owners are not aware of. Even owners who are present may not be aware of the antics that staff pull off.
Failure to act
At first we didn't know. We didn't know that we didn't know. When we discovered what we didn't know, we failed to take the required corrective action.
We fail to recognize that customers are dissatisfied. We fail to create a unique experience that differentiates
us from the competition across the street. We fail to put systems in place to reach out to our customers. We
fail to put loyalty programs in place to bring them back. We fail to take the action that is needed to survive in this business.
Sometimes a wrong decision is better that no decision - at least we took action. This business demands constant action to our
changing customer demands. Stay in tune to how and where the customer is opening their wallet - that speaks so much louder than what they
tell you on feedback forms or in casual conversation.
Restaurant and Hotel owners are a different breed. Going into business as an enterpreneur requires confidence in your
abilities and your products.
Beware of when that confidence transforms to arrogance. While the Soup Nazi may make good entertainment
for Seinfeldt, it does not translate to a welcoming environment for your guests or the workplace of choice
for your staff. Arrogance transforms to poor listening skills and shuts down the communication channels that
are vital to your business success. Eat some humble pie and listen to (and observe) what is happening in and
being said about your business and your presentation. Not everything said about you or your property will be
100% true. But each comment gives you insight to guest expectations and experiences. Stop being defensive and
arrogant - you may not be 100% right either.
What we offer
Included on this site is our knowledge base that documents our experiences and helps to put you in the know.
We give you tools and insight into what to watch for. Deceptively simple tools, systems and practices that will ensure your success.