Owning and operating a restaurant business, or chain of businesses can be a real balancing act. It’s challenging enough finding and securing the perfect location, but that’s where the real work begins. It’s a high-risk competitive industry that can have lucrative rewards, but studies have found that 60% of independent restaurant businesses fail within the first year. Here are 6 challenges that all restaurants must face to stay alive.
1. Customer Service
The quality of service that your customers experience while dining in your restaurant will make a lasting impression on them. Positive or negative, it’s what will ultimately dictate their decision to revisit time-and-time again. Unfortunately, one-hundred great experiences can still be outweighed by one mediocre experience. As a result, your restaurant is only ever as good as your last dining experience.
Positive customer experiences are often associated with a solid and expedient operational strategy. Diners are typically creatures of habit, so if budgets are restrictive, perhaps consider some quicker wins like, the level of attentiveness of waiting staff and kitchen preparation times.
An over-complicated menu or ordering system can be an immediate turn-off for any diner. It can cost you in walk-in diners and non-bookings, as well as being slow and cumbersome to yield decisions. Menus shouldn’t be too large or too restrictive, and it’s a good idea to rotate some dishes seasonally to maintain a fresh appeal. It goes without saying that cooking a small amount well, outweighs the potential to cook a lot of things poorly.
The visual design of the menu is also important, with many diner’s decisions being led by visuals and aesthetics. Plenty of accompanying photos, quality copy, and a consistent brand design can go a long way to building a fantastic menu.
3. Customer Service
From electricity to running water, all restaurants face the challenge of reducing costly overheads where possible. Streamlining of media and communications can be a great way to reduce soft costs on telephony and overhead music. Finding suppliers who can start to bundle together cost-effective packages with long-term savings, can really help to innovate on cost reduction.
In a recent blog article, we reviewed the rising cost in Performing Rights Society (PRS) music licence fees. This study revealed that over the last 10 years, the PRS had slowly increased fees by an average of 40%. Moving to royalty free music doesn’t require Performing Rights Society (PRS) or Phonographic Performance Limited (PPL) music licence fees, and is likely to be the quickest way to make material savings.
Without a brand identity, it’s almost impossible to market your restaurant or chain of restaurants. Even if it’s basic, put together a marketing plan and start to get smarter about building your customer base. Retain email addresses, mobile numbers, and other data that your customers are happy to give you. Create a strong brand persona that your customers can identify with, and start to reap the rewards of good marketing initiatives. Try to avoid spending money on print advertising and alike until you have more of a stable and secure following for your brand. This can be a pitfall that attracts many businesses owners from a variety of industry verticals, but it’s often a waste of money.
Your staff and customers will all appreciate a clean and tidy environment, and if nothing else you’ll be rewarded with certifications for cleanliness. Keeping standards high and maintaining them over time will also lead to less spend on internal décor. It’s a simple point, but one that is well worth making.
6. Staff Retention
Staff turnover in the restaurant and hospitality industry has always been infamously high. In 2015, figures rose to over 70%; the fifth consecutive year of staff turnover rate increases. This recruitment epidemic is reported to now cost the sector more than £272m each year. So how do you stem the flow of this growing issue? Making your place of work, an ‘interesting’ place of work can certainly have an impact. A separate study around staff retention suggested that 67% of staff were likely to leave their job in search of more ‘interesting’ roles. It’s not all about money, as giving staff the opportunity to learn and engage can have a tangible impact on retention. Often the process starts right at the beginning. By recruiting the right team-members from the outset, you can begin to build a robust, engaged and diverse workforce, who might just stay more loyal for longer.