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The Orderly Blog

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7 Common Mistakes Restaurants Make That Doom Them To Fail

Posted by Joy Ugi on Jun 22, 2015 9:00:00 AM

7 Common Mistakes Restaurants Make that Doom Them to Fail

What you do best is run your restaurant.

And although it’s what you love, it’s often so chaotic you don’t have time or energy to evaluate what you’re doing well and what you can improve in order to increase profits.

Some restaurants are often stuck in this endless cycle of doing the next thing without having any strategy behind why they're doing it.

They keep approaching things one way because that’s the way it's always been done.

When this perspective eventually leads to the restaurant’s doors closing, the owners, operators, chefs and staff are fittingly left wondering what happened.

Maybe you’ve just started a restaurant, or maybe you’ve been in the industry a long time.

Wherever you are on the scale, here are 7 common mistakes restaurants make that will help you avoid pitfalls and run a successful business.

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#1 Not Understanding Food Spend

You can see your food spend directly compared to your profits.

You know how much you’re spending week by week on each item you order. 

Supplier prices are available and you make the best purchasing decision balancing cost and quality among supplier options.

If this doesn’t sound like you... then you probably don’t understand your food spend and how it’s affecting your restaurant.

Without a proper perspective of your food costs, you can’t price your menu appropriately. And that could be the make-it or break-it point for your restaurant.

Avoid this mistake by tracking your food spend

With this information, you can make better decisions about how to price dishes and whether to add or take away menu items.

Don’t let suppliers take advantage of you. 

Know from week to week what you are paying each supplier in order to get the best deal.

You can do this using something as simple as an Excel spreadsheet, but you can also use free invoicing apps to do the same thing online and in less time.


#2 No Passion for the Business Side

Maybe you got into the restaurant business because you love hospitality.

Maybe you started your own restaurant because you're a talented chef with lots of phenomenal, unique ideas.

You're probably not managing a restaurant because you wanted to manage all the minutiae of running a business. But if you want to be successful, you must make sure the passion that got you into the industry translates into profits.

If you don't want to handle the business side, hire a competent person who's dedicated to operating and managing your business expenses and accounting.

Someone needs to keep an eye on your food and labor costs, manage invoices, track credits from suppliers, and review schedules.

Or if you can’t afford to hire someone, there are specialized restaurant accounting, front-of-house, and back-of-house technologies to help you ease the stress of everyday operations.


Download 50 free apps for restaurants.


#3 Forgetting About Hospitality

Mistakes will happen at your restaurant... everyone is human.

Dishes will leave the kitchen burned, a hair will show up on a plate, or the wait-staff will break a water glass in the cooler while trying to get ice.

The most important part is how you respond to these customer service issues: Address these mishaps directly and right away.

Patrons can easily turn from dissatisfied to lifelong evangelists for your restaurant if you take the time to acknowledge your weaknesses or failures and make it right.

Creating consistent customer service policies and procedures to uphold the hospitality part of your business is a must.


#4 Addressing Poor Management

Successful restaurants run like a well-oiled machine.

Front-of-house, back-of-house, chefs, owners... they all act as a familial support system for each other. Unfortunately, a lot of restaurants don’t have this team culture.

Often you can point the finger at lack of management skills in your team leaders.

If a restaurant manager isn’t passionate about what he or she is doing, doesn't take the time to hire hard-working and talented staff, and isn't dedicated to seeing the restaurant thrive... then he or she got into the business for the wrong reasons.

Whether you’re looking to hire a restaurant manager or you want to become one, understand dedication to growing a healthy team and passion for the food industry comes first.

The amount of money you take home depends on how well you can manage your team and create a hospitable, welcoming atmosphere.

 Schedule a demo and find out how mobile apps are changing the restaurant industry.


#5 Poor Scheduling Skills

Although it would be easy to set standard schedules for front and back-of-house, the restaurant industry doesn’t support this kind of traditional scheduling.

After all, sales and customer volume can change every week.

Schedules must be created each week based on those variables so you don’t waste money or your staff’s time.

If you’re costing out your schedule, you’ll be able to form a daily and weekly labor budget.

You can then compare weekly sales to your labor costs for the same period, which will give you a picture of where you need to add or take away hours on the schedule.


#6 Lack of Online Marketing

How do most people decide what restaurant they’re going to Friday night? 

More than likely, they’ll search using Google.

You can take advantage of this behavior by prioritizing your online presence.

First, make sure your restaurant website is legible... not only on a desktop or laptop, but on a phone and tablet, too.

Invest in breathtaking restaurant interior and food photography to dress up your restaurant’s website. Images are more powerful than words, so make sure yours reflect the welcoming atmosphere of your restaurant and draw customers in.

Next, do some research about search engine optimization best practices.

Make sure people are finding your restaurant when they search for the type of food you serve and the area you’re located.

Finally, ask patrons to recommend you or leave comments about your restaurant on OpenTable and Yelp so prospective customers who are searching on those sites can find you.

Word of mouth marketing is the most powerful type of marketing... and that's what these online review sites provide.


#7 Inconsistency

Producing food that's consistently phenomenal is one of the most important parts of running a restaurant and developing a loyal customer base.

We all know when it’s slow, more mistakes tend to happen.

Make sure no matter how busy your restaurant is, the staff is producing the same quality of dishes.

The slow Tuesday night steak should be just as great as the busy Saturday night steak. This attention to detail and quality will separate your great restaurant from the “meh.”

Another huge point is holding your suppliers accountable for the product they send you.

Nothing is worse than anticipating a busy night and an incomplete delivery at the back door makes you have to 86 one of your most popular dishes.

Track items received at the door against your order to give yourself time to react and get product before service. At a minimum, keep track of the credits owed to you due to supplier mistakes.

Make sure suppliers make good on those I-owe-yous.


Make Smarter Decisions for Your Restaurant

Your business may not be guilty of all seven of these common mistakes restaurants make, but you're probably suffering in at least a couple of these areas. Measure where your strengths and weaknesses are...

If you’re well-versed in marketing and your website is hunky-dorey, move on to tracking invoices and food spend.

If your food presentation and quality is always consistent, then focus on creating a top-notch team and inspiring them to work together.

As you address each of your weaknesses, and put processes and technology in place, you'll see constant improvement in your operations that will lead to business success in the long term.

The Orderly App is the easy-to-use, do-it-for-me restaurant app for invoicing and inventory. You can use it to throw away the boxes of invoices... take a complete inventory in half the time... and manage your restaurant more efficiently.

Best part is, it's 100% free!

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Topics: Operational Efficiency

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