29 Common Mistakes New Restaurant Owners Make
Did you start a restaurant and not getting estimated profits? Are you in complete loss and don’t know how to turn it around? Maybe, you want to start one and are trying to learn as much as possible about the trade. You are at the right place.
Running a restaurant is a difficult task. There are hundreds of things which have to go right, and thousands of things customers could find a problem with. Everything has to be perfect, for a customer to leave your restaurant satisfied.
So, here we have compiled a list of simple mistakes that restaurant owners make. We have also added tips to avoid them.
Not adapting to technology
In the business world, adaptability is the key. During this digital age, not embracing technology might be fatal to your restaurant.
It includes managing your restaurant with technology, providing services online, having a healthy online presence, etc. Learn about enterprise resource planners, inventory managing software and find the one which suits your needs. Using an effective ERP tool can greatly reduce your working time and increases your productivity.
Everyone nowadays is online all the time, having no presence online can be a huge red flag. Learn about online marketing. Create a website, list your business in restaurants index apps and maintain a healthy online presence.
For more information, you can read Why Customers Prefer Businesses With Online Presence
Neglecting online reviews
After setting up a website and listing your restaurant in third party apps and services, keep an eye on reviews you get online. These reviews might not be completely true, but there is definitely a hint of truth.
Remember that customers often rely on reviews before ordering food or visiting a restaurant. So having good reviews will help you get more orders and customers.
Quality ≠ Success
You might think, with quality food and quality service comes success. That is completely false. Even though quality is important, it is not the only thing that brings success.
Understand that running a restaurant successfully is more than maintaining quality. Accounting is an important aspect of a successful restaurant but is often ignored. Hire an accountant or learn accounting.
You need to know how much profit margin every item has. You should know what is the best seller and what is not. Every day you can learn something new if you paying attention.
Understand that you could be selling the best burger in town and not make any profit. You could have hundreds of customers buy stuff from you every day and still not make a dime. Understand that to earn profits and to be successful, selling more or being best is not enough, economics and accounting are also important.
You go to a recently started restaurant with your family, hoping to have a good time. There are many customers but many tables are empty too. You take a seat and wait for the waiter but he is nowhere to be seen. It takes him 20mins to arrive at your table. The food is good but not worth the wait time. You head back home unsatisfied and deciding not to come back again.
This happened because there are not enough waiters when you went to the restaurant. This is usually a sign of miscommunication between managers and staff. Had the manager communicated and assigned the timings properly for his staff, he would have earned a loyal customer in you.
Communication is the key to any organization. The restaurant is no exception to this rule. Conveying your ideas and orders clearly to your staff is very important. It will allow for no mismanagement to occur. It helps in smooth functioning and quality service to the customers.
Not interacting with customers
You started your restaurant, hired a good chef, food is tasty, staff are professionals but still, success seems to be running away from you. Maybe your problem is not making enough interactions with your customers.
A sure way to make a customer come back again is to ask their feedback, be open to their suggestions. Listen to them attentively, make sure to keep them happy. If they don’t like a dish, ask how they want it to be.
Do not interrupt, let them speak. Understand that their tastes and opinion are of utmost importance. You can even go a step further, make acquaintances and form friendships, greet your customers with a smile. By doing so, you make them feel important and people love it.
Try to remember the names of your regular customers. Next time you see them somewhere else, call them by their name, people love it, it shows that you care. It shows them that they are more than a customer to you and that is how it should be too.
Good food is not enough
So, you started a restaurant and hired the best chef you know. You advertised a lot and poured tons of money into it. So, will it make your business successful? Not exactly. It certainly increases your chance of being a successful restaurant owner but doesn’t guarantee it.
People go to restaurants to have a good time, to spend quality time with friends, family, etc. Taste of food is important but not the sole deciding factor. Even more than taste, aesthetics and service matter more.
You could be a good chef, but that doesn’t make you a businessman. Realize that a restaurant is more than just tasty food.
Refusing 80/20 rule
80/20 rule suggests that 80% of all effects come from 20% of causes. This same thing applies to restaurants as well.
Around, 80% of complaints and mistakes happen due to 20% of the staff. So, You need to remove the incompetent staff and increase the quality of service by 80%.
Typically, 80% of customers order food from only 20% of the menu. So, if you increase the quality of the food in that 20%, you can impress 80% of your customers.
We can go on forever, 80/20 rule when applied correctly can optimize an existing institution. So, what are you waiting for? Read about it.
Lack of USP
Unique Selling Proposition( USP) or Unique Selling Point is what differentiates you from your competitors. It simply means what you offer that others don’t.
Before starting a restaurant you need to decide what is your USP is going to be. You have to decide what service you are going to add to the existing market. Once decided this USP is used in advertising and it defines how your restaurant functions.
Having no USP means you are always confused. You cannot target specific customers. Lack of USP also makes it harder to advertisement and will affect your restaurant negatively.
Understand that you are in the restaurant business for the long haul. Don’t be disappointed if you don’t get profits right away. You need commitment and consistency to become successful.
Being passionate about restaurants will help to stay committed. You will face all kinds of people during your journey. Some customers are all always angry, some find faults in everything, learn to manage them.
Remember that you don’t have to satisfy all kinds of diners. You can never achieve that.
Be ready to work extra hours, learn about new things, understand the locality and your customers.
Not changing menu overtime
Flexibility and adaptability are key to any business and restaurant is no exception. Remove items from the menu which no one orders. Instead, add new items that customers might like.
Sometimes, you need to tweak the menu and items as per seasons or special occasions. Don’t be reluctant, consider it as a golden opportunity to try new things. You might hit your lucky item, you never know. Offer daily specials, chef specials, etc and use this data to understand your customers even better.
Not respecting local customs
Different areas have different customs and people behave differently. You need to respect their customs and embrace them.
If your customers like to sit together after lunch and talk about politics then let them. If they like singing songs then install a stage and mic for them to sing.
Understanding and respecting the existing customs will always boost your popularity and increases revenue to your restaurant.
Everyone knows that spending more is bad for any business. It is no different for a Restaurant. But how much is too much?
A widely accepted figure is if you are spending more than 66% of earning on food and labor, you are going to fail. Do not spend too much money on making food items that no one orders. You don’t need a huge menu to be successful.
Prices of an item should be 3 times more than the food cost. This is because you are selling not just food but also service.
Lack of Enough Capital
60% of new restaurants go bankrupt in a year due to a lack of funds. This is because owners overestimate their sales and underestimate their spendings and expenditure.
A general rule of thumb is to have funds to run your restaurant for 6-8 months without profits. It takes a lot of time to actually make profits by a restaurant.
Be ready to spend more than what you have initially estimated. 9 out of 10 times your expenditure calculations are underestimated by 20%.
Small things matter a Lot
Simple things going right might not impress most people but if they go wrong it definitely disappoints customers. Remember that every little thing forgotten or neglected will cost you, customers.
Think from the perspective of a customer, think about the little things he will notice when he enters.
He will notice cleanliness, lighting, fan/ AC, how tables are placed, how many customers are present, how waiters are talking to customers, how he was received and etc.
These little things will form an impression of how the food, overall experience, cost of a restaurant are going to be. It will give him an overall idea of what to expect. This information makes him feel excited or disgusted or disappointed etc subconsciously. This first impression alone decides whether he will come back or not.
If these little things are not to the satisfaction of the customer, you lose them even before they had something in your restaurant. Once, he got a negative impression, it is very difficult to change his mind.
To help you offer a first-class service and to impress your customers, we have provided you with a list of little things that should go right.
- Maintain clean and neat floors.
- There shouldn’t be cleaning staff when customers are having food. No one wants to eat food with a floor cleaner smell in the air.
- Make sure waiters are not aloof or occupied when a customer arrives. You can do this by providing strict timings for individual staff.
- Have a clean washbasin with Hand sanitizer/ Soap. Provide clean and plenty of Napkins/ tissues.
- Clean washrooms for both genders. With hand Sanitizer available.
- Only cleaned and dried spoons, forks, and plate should be on the table
- Avoid bug/mosquito killer machine near the dining area. No one wants to hear bugs frying.
- Provide a printed bill all the time.
- Don’t have a sewage next to your restaurant
- Provide quality drinking water on the table.
- Provide freshly cut lemons and Onion only. No one wants to eat yesterdays leftovers.
- Provide your chef with a hair net cap.
- Your waiters shouldn’t pick their noses, scratch heads or sneeze.
- Accept multiple forms of payments i.e., Cash, Online banking, Debit card, etc.
- Offer free items as a gift to customers for birthdays, marriage anniversaries, etc. This creates huge respect and free publicity every time the customer tells the story.
- Avoid high waiting times for your customers. You can do this by assigning shifts to staff properly.
With all these taken care of, you can be pretty confident that your restaurant is going to be a success. Location of a business also plays a major role in its success, to learn more read 14 Things To Consider When Choosing Right Location For Your Business
If you want to learn more the mistakes made by small business owners you can read 7 Simple Mistakes of Small Business Owners