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6 Biggest Reasons Why Restaurants Are Shutting Their Doors

Restaurants worldwide have been seeing a declining rate of growth over the years. Over sixty percent of restaurants have shut down in the first year of business itself, and the new ones are not faring any well either.

The iconic Cliff House restaurant in San Francisco has shut down due to unbearable operationalcosts. The very famous chain ‘Mirchi and Mime’ along with its sister concern ‘Madeira and Mime’ in Mumbai, which offered employment to specially-abled youth, has also shut down amid struggles regarding the high rent and costs of the daily operations.

The Eleven Madison Park, a fine dine restaurant located in the heart of New York City and named the World’s Best Restaurant in 2017, has also faced hurdles in day-to-day operations and is barely afloat.

What is the reason for the failure of the newly established restaurants going under?

Many franchises and local businesses have seen a fall in profits and customer margin, accounting for their losses as well as forcing its staff and owners to jump ship and flee.

Here are 6 of the major reasons why a restaurant can’t make it in this cut-throat industry.

Number 6: DON’T overdo the funk.

A large part of why most cutesy little bakeries and eateries run out of business is because they overdo trends like pretty Instagrammable interiors and dainty, delicate cutlery that serve no purpose for customers other than being shareable on social media.

Focus on the ambience is a must, but overdoing it will lead to less attention on the food, which should be the main riveting point of your restaurant.

Instead, channel those resources and creativity into better quality food and brand promotion. In the end, what brings people into your doors is the food and not the pretty plates.

Your business can do without beautiful furniture, but not without delicious food.

Number 5: A bad workman blames his tools.

It doesn’t matter if your restaurant’s interior is pretty or if the cutlery is expensive. That may make a good first impression on your customers, but what they do judge is the quality and taste of your food.

If the food is not up to the mark, you will lose out on business.

Good food can bring anyone over to any corner of the world. Remember, the best way to a person’s heart is through the stomach!

Number 4: 10 different varieties of soup.

DON’T make a complex and overcomplicated menu!!!

Your customers will feel more confused. They will eventually end up ordering nothing, or the cheapest thing on the menu! Keep your menu short, concise and to the point.

Don’t include different variations of the same white sauce pasta, instead include a different type of risotto! This will not only give customers more flexibility to choose from, but will also propel them to order more things from your menu.

Number 3: Newspapers and Flyers.

It’s 2021. Relying on advertisements in newspapers and giving out flyers promoting your restaurant might do a good job, but not a fantastic one!

Get online, or stay behind. Create a website for your restaurant, include prices and the menu on it, along will positive customer reviews and offer promos. Make use of social media; youngsters and oldies alike use Instagram, Facebook, Twitter, etc!

DON’T miss out on the crowds, go and get your business online! Marketing works only when you do it where the crowds are.

Number 2: Listen through the ear, apologise through the mouth.

Remember, the customer is ALWAYS right.

Great customer service skills don’t come by in a day, and need to be built up from scratch. Whether it is a problem with the food or a problem with the service, DON’T make the mistake of provoking your customer.

Every single customer is capable of bringing more business to your restaurant, and disappointing even one of them blocks that whole network of business.

So, put on a smile and make your customers glad they chose you!

Number 1: Pizza in the Hut

The winner for today is: Location.

Your restaurant’s location will end up determining how much business you receive, the prices you set on your menu, your visibility to potential customers, brand awareness, blah blah.

If you run your restaurant in a crowded city area or a posh, upscale part of the town, congrats! You have already won half the battle.

Have you noticed how major fast-food outlets like McDonald’s, Pizza Hut and Dominoes have their franchisees in the upscale part of town? It’s because they know that good locations can bring in more than 50% of their business into their doors.

Having your business in a known area of the city will help you build up on brand awareness and easy access to customers. On the other hand, if you build a classy restaurant in a run-down neighbourhood…best of luck.

These are the 6 main reasons that can make or break your restaurant: among many others. Researching thoroughly before opening a business is a must, as good research goes a long way. Make sure to study up and make wise decisions while opening your own restaurant.

Simco Consultancy offers Restaurant Conusltancy! Get in touch with us to know more!

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