See if you're eligible for a loan, it only takes 30 seconds...
1. Your Business (10 seconds)
2. Monthly Sales (10 seconds)
3. About You (10 seconds)
Please Choose Type of BusinessBed & BreakfastBusiness ServicesConstructionEntertainmentEnvironmentalFranchiseHair & Beauty SalonHome ImprovementHotel/HospitalityLegalManufacturerMedicalMOT/Independent GarageNail SalonOff-Licence BusinessPersonal ServicesReal EstateRestaurant or PubRetailSpaTransportationVeterinaryWholesalerOther
You have to be a few beers short a six pack to open a restaurant. It’s stressful, it’s noisy, you depend on people who are highly undependable, and your chances for success aren’t exactly “good”. It’s an exercise in patience, and most restaurant owners will say they feel like all their time is spent putting out fires. Sometimes literally.
But you’re not alone, beleaguered restaurant owner. Many of your problems are shared by other restaurateurs. And many of them are fixable. Here are ten common problems restaurants face, and how to fix them.
Problem 1: Dwindling Capital
Opening a restaurant is not a cheap proposition, and even after you’ve budgeted for your startups costs, you may not be able to begin operations as soon as you’d hoped. Or customers may be slow to walk through the door. You had enough money to get up and running, but now there’s nothing left and your restaurant hasn’t taken off yet.
The solution: First, make sure you’ve got enough money to operate for at least one year without turning a profit. And have a little extra for unforeseen disasters. If you budget for this in your business plan, potential investors won’t be scared off. Rather, they’ll think you’re being realistic and responsible.
Problem 2: Differentiating Yourself
It seems every new restaurant is some combination of New American, Farm-to-Table, Global Fusion cuisine. Which means absolutely nothing, and isn’t going to entice diners to come to your place instead of a similar one nearby. Competition in restaurants is fierce, and if you don’t have a niche, you’ve failed before you started.
The solution: Look at the local the market and see where you can provide something the competition does not. Maybe it’s a view. Maybe it’s a gimmicky theme. Maybe it’s a type of cuisine that no other restaurant is serving. But you need to be able to answer the question “How are you unique?” or else you’re sunk.
Problem 3: The Menu
You’ve got a ton of great ideas and you love them all… so you’ve thrown them on the menu. Now, your ticket times are astronomical because chefs can’t make things together, your pricing is all over the place, and guests have a hard time pinning down what exactly it is your restaurant does.
The solution: Find a handful of things, and do them really well. Let the Cheesecake Factory have a menu that’s longer than some chemistry textbooks. You’ll set yourself apart by having one or two signature dishes nobody can find elsewhere. And in the process you’ll save on food cost, make your kitchen more efficient, and give your restaurant a great identity.
Problem 4: Hiring the Right Staff
Between developing the menu, designing the restaurant, handling the finances and the epic odyssey that is getting city permits, hiring staff has fallen by the wayside. You try to screen for the right people, but ultimately you end up hiring whoever showed up on time and didn’t smell like bourbon. Your service isn’t where you want it to be, but taking the time to find the best people doesn’t fit your schedule.
The solution: There are plenty of ways to make sure you’re hiring and training the right staff, but if you don’t have time to be that meticulous, hire managers who do. When you interview managers, look for those that know how to spot good servers and display some hiring acumen.
Problem 5: Employee Turnover
Maybe you’ve found the right people, but you can’t seem to keep them. Your servers are a revolving door, and every week you wonder if you’ll be able to fill Saturday night’s schedule.
The solution: Make your restaurant a place where people actually want to work. Don’t treat your staff like servants, rather, listen to their concerns, incorporate their ideas, and invest some time and money in team building. And if you’ve got standout servers, do what you can to make them happy so they don’t jump ship for the next hot restaurant.
Problem 6: Having to Keep Poor Employees
Hiring has become so difficult and time consuming that you’re forced to keep on poor employees or risk being short-staffed. Their attitudes are not only affecting the rest of your staff, but are becoming apparent to guests.
The solution: Invest some time in helping them to improve. Ask for the cause of their attitude, or find out what they need to do their job better—and do your best to accommodate that. Improving an existing employee costs far less time and money than hiring a new one. But at the same time you may want to start hiring some more staff in case those “improvements” don’t work out.
Problem 7: Marketing
You’ve got great food. Your service is on point. You’ve got good reviews online. But still, people aren’t lining up to come in. Not enough people know about your restaurant, and you need to market it better.
The solution: First, you should have built a marketing plan into your business plan, complete with social media objectives and traditional media outreach. If that’s not working, you might want to look into hiring a social media specialist or a PR firm to help you with promotion. If that’s not in your budget, scour local social media for food influencers like bloggers, journalists, and Instagrammers and invite them in to try the place.
Problem 8: Cash flow
Your restaurant seems busy, people like it, you’re brining in lots of money, but somehow you still bounce checks at the end of the month. Odds are you have a cash flow problem.
The solution: Fixing cash flow is never simple. You need to understand the cause to find the best solution. If you suspect you have a cash flow problem, click here for detailed solutions.
Problem 9: Balancing the Books
You’re weeks behind on your books, and not exactly sure how much money you’re owed, how much you need to pay out, and how much will be left at the end of the month. Accounting seemed simple enough, but it keeps getting pushed to the back burner.
The solution: Outsource it. Hire an accountant to balance your books for an hourly fee so you don’t have to. It doesn’t necessarily involve hiring a full-time employee. And what’s more, your accountant will let you know when things like cash flow become a serious problem.
Problem 10: Service Animals
You’re trying to maintain a calm, clean atmosphere in your restaurant, but people with alleged “service animals” trot them in, creating additional noise and calamity – or worse – in the middle of your dining room. Legally, you have to let legitimate service animals in the restaurant, but it seems to be getting out of hand.
The solution: Bottom line: any trained service animal that belongs to a legitimately disabled person will not bark, or even make itself noticeable in a restaurant situation. If a dog does do that, you’re well within your rights to ask it to leave. That person may not come back, but the rest of the patrons will.
Learn how we help our customers around the country grow their small businesses—and thrive.