6 Mistakes That Restaurateurs Must Avoid In Their First Year

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Starting a restaurant can be an incredibly risky move, especially for inexperienced business owners. One out of four establishments is expected to fail in its first year, and for a lot of you aspiring restaurateurs, this is a terrifying statistic.

However, the fact that a quarter of restaurants fail in its first year shouldn’t discourage you. Instead, you should take this as a challenge to be part of the percentage of restaurants that survive its first year and beyond. And to do so, you must avoid the mistakes that can affect your chances of success:

1. Failure to conduct adequate research

Even if you have experience in the food-service industry as a manager, starting your own restaurant is different from just working for one. Your knowledge and expertise in the industry will be beneficial in the long run, but it might not be enough to run your own restaurant successfully.

That said, conduct adequate research about the processes involved in starting and running a restaurant. For example, find out about the average breakfast franchise cost, local laws and regulations for food establishments, small business loan requirements, ideal hiring processes, restaurant systems, and everything else in between. The better prepared you are, the higher the chance of your restaurant surviving its first year.

2. Having low capital

Starting a restaurant business is expensive, and if you think that you can get away with bootstrapping your operations, you might be setting yourself up for failure. Do not start a restaurant if you don’t have enough money. That’s rule number one. Rule number two is to start a restaurant when you have enough money and extra funds in unexpected circumstances. If you start a restaurant while you are underfunded, you might fall into a downward spiral of financial problems during your first year.

Starting capital for a restaurant ranges from $30,000 to $100,000 or higher, depending on the size and type of restaurant you’re planning to open. If you have to take on a huge debt for the restaurant, drain your savings accounts, or do both. It’s better to wait until you have enough funds to start without high financial risk.

3. Rushing to start

Starting a restaurant takes months, even years of planning, much like any other business. It takes a lot of time to make a business plan and even more time to make those plans into reality. Thus, starting a restaurant is not something you can rush, lest you want your business to fail within its first year or even sooner.


4. Neglecting research and development

It doesn’t matter if your restaurant is the best-looking on the block or if your gimmicks are out of this world. If your food sucks, best believe that customers will turn their backs on you and encourage others to do the same.

Your first year of operations is the toughest because it’s when you introduce your food to the public. Therefore, making a great first impression rides a lot on having great food at great prices. And to do that, conducting adequate food research and development is a must. Otherwise, you can end up serving subpar food that will turn away customers and leave your pockets dry.

5. Choosing the wrong location

Just like food, location is crucial for a food service establishment. Moreover, location determines your restaurant’s menu, design, theme, and prices, among many other vital factors. Hence, choosing the wrong place can have a significant impact on your restaurant’s success, especially if the concept you select is not in line with the local crowd.

6. Not having plan B, C, D, and so on

In any business, there is no guarantee that you will achieve your goals in the first few months (or even years) of operations. You might already have made assumptions about expected sales and revenue during your first few months or years, but even though these numbers are well-researched, there is no way to know if they will be accurate

For this reason, having plans B to Z is essential when starting a restaurant. In this way, you can be prepared with solutions if the worst of the worst happens to your business.

Starting a restaurant, much like any other business, is a high-risk, high-reward kind of investment. Nevertheless, there are many ways you can minimize the risk of failing, starting by knowing what mistakes to avoid in the process.

Do you have any other business strategies to share with aspiring restaurateurs? Let us know in the comments below.


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