4 Reasons Why 90% of Restaurants Fail

March 4, 2018

Around 90 % of restaurants fail. This is a pretty widely known statistic, and also a pretty sad one as well. Just let that sink in for a second. Imagine 10,000 restaurants (we know, it’s hard to even process). Well 9,000 of those fail, leaving only 1,000 running. 

 

We’ve been in the restaurant business for over 35 years, so we know what it takes to last. Here’s a list we have comprised of just SOME of the most common reasons why most restaurants have failed, or are currently failing.

 

 

They get into it for the wrong reasons. A lot of people want to (or do) start restaurants just to make a quick buck. They think that running a restaurant is easy work, and they are viewing it through a lense with money-glasses. They are also going at it from a completely wrong mindset. The restaurant business is a marathon, not a sprint. There’s a lot of over-head costs, innovation, trial and error, and customers you need to please. You have to make people aware of you, and make them want to stop in your restaurant. Then you have to make them happy, so they'll come back. It's a lot of work. Although, if you’re dedicated enough, money isn’t a problem, and you love making people happy, then go for it. Just saying that is even pushing it. This business isn’t for the inattentive. There’s a ton of factors to think about. Do do your research first to at least make sure you know what you’re getting yourself into. 

 

The second reason (of many) of why many restaurants fail is because they forget to create a friendship with their customers. Having customers is a relationship. You must give them a reason to stop in and eat at your restaurant. Many of the failed (or failing) forgot to to this. They didn’t adapt to customers wants/needs/preferences. Restaurants will forget about who consistently does business with them (keeping them afloat). They'll think of them as just another number instead, and then the customer will forget about them instead. 

 

The third reason is because of a bad location. Many of the failed restaurants were in bad spots (Example: behind big buildings, or in small towns where not a lot of people go) Restaurants often rely heavily on tourism and local traffic. If you are in a small town, it’s a must to be where a lot of people pass by, so on your slow days people see you, and end up stopping in. Even in a big town this is necessary. Being down a side street on top of a rooftop that’s behind the big sign blocking it, is a mouthful to say, but its even more confusing to locate. Even Google Maps will probably screw that one up. People want to be able to find you easily, and you should want them to also. 

 

Poor marketing. This is similar to having a bad location. How are people supposed to find you, and know what you’re all about? A lot of failing restaurants (and businesses in general) push marketing to the side, and that’s another reason why they fail. Now we’re not saying you have to go all in on marketing. Sometimes we even take it too far, but we just want to make you happy. What we are saying is that you need to provide customers content. Give them a glimpse of what they will get if they stop in. Give them a reason to stop in. It could be as simple as adding your business' location to Google, with the menu, and correct hours. Many failed restaurants forgot to do those things, or were simply too lazy to do that. It’s sad.

 

Before you go off starting your restaurant venture, make sure to be meticulous, and at least think about those four points. There are a lot more than just these four reasons why restaurants fail. We could also argue that things like bad management, and poor staff demeanor are also some of the main reasons. We just thought these were the most common, and most important today. 

 

We hope you liked this blog. There are many more to come. At least once a week, we’ll be publishing a new one. Comment below what you want to see next :)

 

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