Moving in Fast: Saving a Failing Restaurant

restaurant owner

There is always a chance of success and this is something you should remember when your restaurant is in crisis. There are many reasons why a restaurant may be failing but to save it, you need decisive actions.

Here are some things that you need to do to pull your restaurant back from the brink:

Deal With the Obvious Issues

When you look at your operations, there will likely be some obvious issues that you have to resolve. For example, hygiene is a major concern for any restaurant. While some of them don’t worry about it until the local health department gets involved, your customers would know if your place is not meeting the standards. One issue is the presence of pests and other disease carriers. Just to be sure, you should call on a pest control service to come in and clean your place.

Another obvious problem that might be causing your restaurant trouble is that the food is just not right. This does not mean that the food is not delicious. It just might not be something the local customer base might like or desire. For example, if your menu is full of high-priced fancy dishes and the local demographic can’t afford them or doesn’t even know about them. This can result in fewer people coming in. The obvious solution is to change your menu.

Look for issues like these and start making changes. This should be the start of your turning the restaurant around.

Bring In Some Fresh Perspective

It is always useful to have an outsider’s perspective when it comes to business problems. Sometimes, you don’t even realize something is wrong because you are too close to the issue. If possible, you should hire consultants or even ask mentors about what is going wrong with your restaurant. Outside voices allow you to identify problems that you aren’t even aware of.

For example, your consultant might identify that your restaurant is lacking in advertising. For you, the current level of having a Facebook page and some flyers is enough. But your consultant might feel that your operations need to get more flexibility to attract more customers.

Find Out What Customers Want and Give It

food takeout

Besides outsiders, there is also another source of potential information on how to save your restaurant: customers. Your customers will be able to tell you want they like and what they want. This should point you in the direction of what changes you should be making.

Many restaurant owners are stubborn when it comes to changes to their menus and concepts. For example, some of them do not approve of take-out and delivery, thinking that it takes away from the experience. But if customers want it, then you should start offering it since it is a potential way to earn more money.

Sit Down And Do Some Calculations

Speaking of money, you should sit down with a good accountant and review your restaurant cash flow. Restaurants operate on tight margins, with their constant need for ingredients and other expenses. If you are losing money, then one potential cause might be accounting issues. Changing your bookkeeping practices might not solve your issues overnight but they can help you identify potential issues to resolve.

For example, you might be improperly pricing your food. To be profitable, your menu prices should just not consider the cost of the ingredients but also the labor and the venue. The golden rule for this is the 30 percent rule. This means that your food cost should be only 30 percent of the dish. A meal that is worth a dollar to make should be priced at least $2.85 on the menu. That is the minimum and you can go higher as long as the customers buy it.

Streamline Your Team

Another change that you might make is to make your team more efficient and streamlined. Look at your managers and see if they are still doing their job. You might hire someone good on paper, but the stress of the industry might have taken its toll on them. Your service staff also deserve similar attention. A restaurant team should always be busy. If any of your people have nothing to do then you are overstaffed, and you need to lay off some people. This can free up their salaries that you can use to bolster your business.

Restaurants are always popular. People need food regularly. So you know that it’s bad when one is in trouble. It may seem hopeless, but you can still turn things around. It will take a lot of effort and it can be risky since the chance of failure is higher, but it can make your success much sweeter. Start your efforts now to get the best effect.

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