If you can cook well, work hard, have enough money saved to buy a business and love serving people………..don’t buy a restaurant.

To buy a restaurant and be successful, you should first write a script, cast the characters, create a changeable stage, get the lighting right, start with an empty theatre and build the business on ‘word-of -mouth’.

Here are my Top Ten Reasons that restaurants fail, go bankrupt, change hands and close the shutters. The next 10 are equally as important !

No Prior Experience …. but don’t care. “Have eaten in restaurants all my life!” If the owner has never worked in a restaurant, this huge learning curve must be financed. There are many mistakes which must and will be made in order to learn the formula and the formula is complex.

Not a destination …. and no effort to make it entertaining. If there is no reason to go to the restaurant other than to eat, then there are too many other places where hunger can be satiated, including home.

No USPs … no attempt at the six senses. Unique Selling Propositions or USPs are distinguishing features that make one restaurant sparkle and other restaurants bustle. Signature experiences that are unique and set one place apart from the others are critical. Tabletops, lighting, signature foods, drinks and special wines, art, bathrooms and staff to talk about.

Unproductive staff … instead of cast members. Too many ‘service staff’, not enough ‘adding value’. All have imagination, few owners use this asset wisely and productively. Seat, take order, serve and clear…..beyond that job description, nothing.

Not synched to local market. A great concept in the wrong place. Not in touch with the market segments that change from morning to night, from Monday through Sunday and January through December.

Status-Quo-itis. Unchanging, tired, worn, un-interesting, boring. Same old thing day in day out.

Food Cost-itis. You can’t bank percentages, only dollars. Too many focus on the percentage food cost and overlook each products’ contribution. Enter Menu Engineering!

Complicated, over ambitious menu…..Continental, Chinese, Thai, Italian, Grills, Pizzas & Hamburgers. Far too many dishes requiring too many ingredients….frozen, canned, banquets, catering, take-out. Simplicity and freshness are overlooked in favour of dishes from everywhere.

Uncompetitive. Not knowing with which restaurants or destinations you are competing and on what basis.

Overpriced. The key to setting the price is to back into the cost, which generally starts with the market. If your market can only afford a $25 meal, you start with that and back into it. If your market can only afford $14, live with it.

And at risk once again of overstating the obvious, there are two Golden Rules for success in the restaurant business,

  • Under Promise and Over Deliver!
  • Spend as much time on the Experience as you do on the Menu

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