Why Restaurants Fail, And How To Prevent It

Developing and opening a new restaurant is exciting, often the culmination of a personal dream or a company strategy. Regardless of concept, brand, cuisine and design, there is one thing that these projects always have in common: the founders strongly believe that the venture will be a success. Unfortunately most have fatal flaws that caused the restaurant to fail.

It’s not that the idea wasn’t great, or the food wasn’t yummy. It’s not that the service was bad, or that the interior design was lame. The flaws are hidden in the disconnects between each element of the project. All the pieces need to work together, or nothing will work at all when it comes to scaling and adjusting the business.

Most entrepreneurs take a linear approach to restaurant development. They find a location, create a business plan using a template, and get advice from their restaurant manager cousin. They do a budget, raise some equity, and sign personally on a bank loan and a lease. They hire an architect, a chef, and staff. They do some marketing, and then open the doors. This type of process is a recipe for disaster. It could create a defect that you don’t see coming for a year or more. Until you’re faced with a problem that can’t be solved within your means.

The VSAG approach to restaurant development is based on the concept of profit architecture. That is our proprietary method for ensuring that restaurants are built on a stable foundation from day one. There are no silos. All aspects of the project are developed simultaneously, with the vital hurdles being crossed prior to signing a lease.

We reconcile subjective ideas with objective reality, like how to create a particular guest experience with the right labor model, produce delicious food at a target cost from an intentionally designed kitchen that was built to align with the labor model, and within budget. All in the right sized space for which you’re paying the appropriate rent in a location that is accessible to your core customers. Profit architecture takes into account all of these moving parts and ratios. It’s a philosophy of balance that yields a focused healthy enterprise that meets the needs of all stakeholders. The learning curve is steep in the restaurant industry. With VSAG’s expert support and guidance your project will have the cohesion that gives restaurants excellent odds of succeeding.

Find out how VSAG’s restaurant consultants can help you open a profitable restaurant, or turn around your failing restaurant. Get in touch with us today!