2006-07-22 10:47:04 · 3 answers · asked by Anonymous in Business & Finance ➔ Other - Business & Finance
The number one reason is lack of a business plan, Other reasons for failure: poor location, poor service, under-capitalized (do not have enough money for the first year), food is not prepared well, poor menu choices, poor pricing, narrow margins on food items.
2006-07-22 11:01:32 · answer #1 · answered by ps2754 5 · 0⤊ 0⤋
My experience with a failed restaurant centered around personnel. Stereotypes aside, a lot of restaurant employees are young, uneducated, and using the job to get by until something better comes along. They are a drain on the owner. If you are at the startup phase, you really need to take a close look at who is going to be there working for you. If you are really, really lucky you will have a squadron of friends and relatives who are willing to get in there and help. If you have to rely on strangers walking in off the street, you're going to have major headaches. Your employees will ALWAYS think of you as some fat cat rich person who exploits the masses. Even if you're working 24/7 onsite, they will resent you and think they work harder than you do. This is the main thing. Then you've got franchises. The myth of "Buy a franchise, be your own boss" has to be the biggest lie ever foisted on the gullible public. As a franchisee, you serve EVERYBODY. The parent company takes its cut and may or may not help you. Things go well, they benefit. Otherwise, you catch the heat. And on the other end are your employees, resenting you as outlined above. Restaurants cater to a very fickle public, and it's like walking a tightrope. One slip and you're gone. I don't recommend putting together a restaurant because it's your "heart and soul" or your "passion," despite what patrons will say. People dislike "corporate" restaurants until they become owners. Go into it like any other business, and if possible, make it one aspect of a larger business. That way if the restaurant fails, you won't lose everything. GOOD LUCK!!!
2006-07-22 18:17:49 · answer #2 · answered by ? 4 · 1⤊ 0⤋
Poor management and hiring skills. Also a lack of a full 5 year business plan with built in goals for success.
2006-07-22 17:50:04 · answer #3 · answered by monkey f 2 · 0⤊ 0⤋