There is nothing easy about starting a restaurant from scratch. In fact, two out of every three new restaurants close within three years of opening. There are many reasons why some restaurants fail but not every owner makes the same mistakes.
If you take the time to do the proper research and learn what to avoid, your chances at succeeding are higher. Many successful restaurant owners took years to research the field and formulate the perfect business plan. Here are some of the most common mistakes restaurant owners make when opening their business.
Lack of Marketing
Decades ago, marketing was not nearly as complicated and tech reliant as it is now. If you are new to the digital age of marketing, you might not fully understand what goes into successfully advertising your restaurant. The first thing you need to do is create a website and start social media pages.
A website is going to be the digital face of your new restaurant. There are many different resources that are available for you to help create a website. Some website building sites provide free startup and don’t require you to pay for a subscription.
On your website, you want to advertise all your important information and make it fit your brand. What’s great about website builders, is you can customize colors and images to reflect what customers will see at your physical location.
Next, you’ll want to create social media pages like Instagram, Facebook, and Twitter to connect with your customers and have an online presence. There is a lot that goes into what you should be doing on your social media accounts, so you can check out our ultimate guide to social media.
As much as we don’t want to admit, location is everything. Even in today’s digital age, the physical location of your restaurant matters. Finding the right location for your restaurant is going to be a combination of many different elements. A few universal factors include suitable parking, accessibility, and how safe the area is.
One of the easiest ways to find a suitable location for your restaurant is to eliminate the obvious bad ones. This will be easy by keeping the previous three characteristics in mind. Can you see the restaurant easily from the street? Does the location have parking that is accessible and can accommodate a decent number of cars? Most importantly, is the area you are looking at safe?
Ask yourself this, how do the other restaurants in that specific location seem to be doing? Basic observations like the number of cars parked outside, the shape the building is in, and knowing the crime rate will help determine this answer.
When choosing the potential location for your restaurant, you will also want to consider what is in the surrounding area. For example, if you are opening a casual dining restaurant that attracts families, you might want to consider a location that has other activities around. Think of your local mall and how busy those restaurants are during peak times. Will this help direct traffic to your restaurant? Probably.
Not listening to Customer Concerns
Many new restaurant owners will do research and make the most organized business plans you’ve ever seen. Maybe they even have investors that are keeping the financial side of the business intact. Your attention has to be on so many moving parts, so it’s easy to forget about the most important one: Your Customers.
You can have the best pizza in your city but nobody is going to enjoy spending their time and money at your restaurant if you aren’t able to address customer concerns. This is where having an active role on social media comes in.
Having platforms for your customers to reach out with complaints, suggestions or compliments will go a long way. This allows you to respond immediately and show others that you are open to addressing concerns.
Try designating one to two people to monitor your social media pages to assure you are addressing your customers in a timely manner. Twitter has become a great platform to get in touch with companies they purchase from. Here is a great example of a company addressing a customer complaint and acting promptly.
Most of the time, you can fix the issue with an apology and a replacement meal. This simple act goes a long way with your customers and shows others that you put them first.
Not Hiring Quality Staff
You might be the brains behind the business but your staff are going to be the first people your customers get exposure to. They get first hand interaction with your customers and will be responsible for leaving lasting impressions. Having staff that are just as motivated to succeed as you is crucial to providing an exceptional customer experience.
When you are starting the hiring process, make your expectations very clear. You will need to decide what type of individual you are looking for. Do you want someone with years of customer service experience or are you willing to take the time to train someone who has an unforgettable personality?
If you have already hired your staff and notice they are not performing as expected, don’t be afraid to act. After all, without happy customers, you won’t be getting any business. If you aren’t getting any business then your restaurant isn’t going to stay afloat.
Try intervening with staff that are underperforming and figure out the root of the problem. Some employees might not feel comfortable addressing concerns to you, so make yourself approachable and open to criticism.
Not Having a Digital Loyalty Program
A digital loyalty program is the key to forming a solid base of loyal customers. Retention is so important for restaurants because returning customers provide a higher ROI (return on investment) and require less spending on advertising.
A quality digital loyalty program is going to incentivize your customers to keep coming back and work their way to new rewards. When looking for a digital loyalty program it’s important to keep some of these qualities in mind.
Look for a program that is frequently being updated and taken care of. If the company isn’t updating their program, your loyalty program won’t be as good as it needs to be.
- Too Complex
When you are starting a digital loyalty program, you want one that’s going to be easy for you and your customers to use. It shouldn’t require a degree in IT to figure out how to load it. You can usually tell how complex a program will be by downloading it and testing it out.
- High Cost
It might come as a surprise, but there is no reason you should be paying hundreds of dollars for a loyalty program. Unfortunately, some people fall victim to greedy sales tactics and sign contracts for expensive programs that don’t fulfill all their needs. Here is a digital loyalty program that won’t cost you a dime and is easy to use.
After learning what caused the demise of many restaurants, it’s easy to see what needs to be done for a successful restaurant. Remember, your customers are the most important aspect of your business and starting a restaurant takes hours of hard work. As like most things, don’t expect to be an overnight sensation right away. Patience and drive will be the keys to success when opening your restaurant.