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Top Ten Restaurant Expert Tips to Prevent Business Failure
Dennis P. Gemberling -- Hotel and Restaurant Expert Dennis P. Gemberling -- Hotel and Restaurant Expert
San Francisco, CA
Monday, March 18, 2013

No restaurateur opens a venture and plans to fail. But plenty have, and a restaurant expert will be the first to tell you that there are pitfalls that you should avoid to insure your success. Here are ten essentials for a new restaurant's survival, learned from many who have gone before:

1. Have a solid business plan.

Take the time and do the homework before investing your money. Make sure you have an appealing concept, do erstwhile market analysis, and gauge customer demand. Compute down-to-earth financial projections including a break-even point as well as an investment payback schedule. And be sure to make a backup strategy for good and bad times.

2. Don't be under-capitalized.

A restaurant expert will tell you it's the major mistake. Calculate how much cash you'll need to reach breakeven and double it! Since 1 in 3 restaurants go out of business within the first year, plan for cost overruns by exaggerating your potential liabilities.

3. Determine the right menu.

Know your customer market and its tastes so your enterprise will fit in and thrive.

4. Use economical humility.

Avoid over-decorating and spending excessively on infrastructure. First concentrate on giving your customers good food and service.

5. Don't cannibalize your own business.

Avoid opening an additional eatery that's similar to others near it. Differentiate and make certain that customer demand exceeds the current offerings.

6. Use good marketing.

Plan to spend consistently on advertising, public relations, creating customer goodwill, and in-house promotions. Keep your name in the public's consciousness at all times.

7. Avoid bad management.

Great chefs are like artists; they aren't always suited for business and finance. Let the artist make the food and support that with team members who can run the enterprise efficiently.

8. Don't overstaff.

Labor costs are the single greatest expense in any restaurant operation. Employees mean you'll pay wages, payroll taxes, and benefits. Being a good personnel manager will save you large expenses.

9. Control your business.

Use the new restaurant software systems that closely monitor your expenses and sales, and track food waste.

10. Don't over-expand or stay too small.

A successful restaurant won't necessarily succeed in another location; avoid subsidizing the loss of another with the profits from your first. If you have a growing clientele and your operating costs only have you breaking even, expand your seating before opening another restaurant.

Take heed: Work with a restaurant expert who knows how to get things right from the start if you lack this expertise.

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Name: Dennis P. Gemberling
Title: President
Group: Perry Group International
Dateline: San Francisco, CA United States
Direct Phone: 1.800.580.3950
Main Phone: 1.800.580.3950
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