Why Do So Many New Restaurants Fail?
Number one cause of new restaurants failing is of course lack of money! Refer back to any past episode of Dragons Den if you will and what is the one thing that always trips even the most inventive and charismatic presenters up? It’s the figures, I even noticed cheap hotels in leeds new ‘dragon’ Hilary Devey threatening well perhaps not threatening but gently yet firmly persuading one of her latest business partners to create and maintain a set of management accounts to keep a close eye on what the finances were doing on a frequent basis.
Even when I was at university doing my degree in traditional marketing in first year we all had to complete a module called management finance which did not teach us how to balance books or create accounts but to be able to read, interpret and plan from eureka springs cabins that we were given and that has proved invaluable into my professional career.
Number two reason for fifty percent of new restaurants failing within the first year of opening is trying to fill a gap in the market that is just not there. When people lets say, entrepreneurs reason their business proposition with they a filling a gap in the market or meeting needs that were not previously being met by existing providers that’s fine – when the gap was actually there in the first place.