Restaurant Failure: Causes And Prevention

restaurant failure causes prevention

Whether running a restaurant, cafe, pub, or any other establishment serving food, you are likely to run into many problems. For example, you might get bad food, have a poor staff, have over-ordered, or need more inventory management. To increase the success of your restaurant, it would be beneficial if you could figure out how to prevent these issues. 

Poor Staff Management 

Other than the caliber of the food, the level of service, and the decor of the restaurant, many other factors affect a patron's dining experience. The advice for running a successful restaurant continues beyond purchasing chairs, large Restaurant Booths, and tables that combine comfort and style. Your company's success also depends on placing the appropriate personnel in the proper positions. They will move on if you don't pay them enough or treat them right. Restaurateurs also must be careful about what you serve and how you present it. You want to avoid being stuck with the leftovers of your most popular dishes. 

The best course of action for a restaurateur is to hire people who are a good fit. For instance, hire an employee who is detail oriented and can help with inventory management. This will ensure you have the most popular dishes and your customers get the most for their money. 

Food Costs 

Whether you are currently running a restaurant or planning to do so, knowing why restaurants fail can help you avoid your fate. Approximately 80% of new restaurants close within the first five years. The reasons vary, but one common theme is a lack of awareness. 

Food costs are a big part of a restaurant's budget. Having a detailed weekly budget can help you avoid failure. This budget allows your staff to make intelligent purchasing decisions and keep your food costs in check. You can also help prevent food waste by maintaining a waste log. This allows you to track how much food is being wasted and help you find ways to cut costs. 

Poor Inventory Management 

Keeping track of food costs is essential if you want to make a profit. Restaurants spend around one-third of their total budget on food and drink, and poor management of these costs can wreck your restaurant's bottom line. However, you can take steps to better manage these costs and make the most of your dollar. 

One way to manage food costs is to keep a record of waste. You will want to know where your food goes when it is not being used. This will help you track down lost sales and improve your overall profitability. 

Another is to make a detailed weekly budget. This will allow your staff to make intelligent purchasing decisions and keep your costs in check. 


Often the number one reason restaurants fail is because of their location they are in. The fact is, a wrong spot will affect the amount of foot traffic you receive, as well as your visibility. Changing areas can be costly and can cost you clientele. Finding a place ideal for you can also take time and effort. 

It is essential to study your options and not make a quick decision. This will increase your chances of surviving. If you can find a good location, it can make up for any other shortcomings. A wrong location can also hurt the overall service you provide. 


Keeping tabs on the price of food is one of the most crucial tasks of any restaurant. Food costs represent almost a third of a restaurant's total expenditures. It is also among the most time-consuming tasks. An easy method to monitor your food costs is to implement a restaurant technology solution that will enable you to manage your food cost data. The more attention you pay to food cost management, the less food will be thrown away. In addition, you can save hundreds of dollars in lost revenue every month. This is especially helpful if your restaurant focuses on fine dining.

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