The No. 1 Reason Why Restaurants Fail — and What to Do About It

By Andrew Carlson, Foodable Industry Expert

I think it’s time that we have an honest conversation about the state of your restaurant and the reality of the situation we’re currently looking at.

If you are currently not growing, not innovating, or not focused on making your restaurant better, you’re failing. Period.

This isn’t an argument. This is fact. There is no such thing as staying at the status quo anymore. We do not have that luxury as business owners. You are either thriving or you’re dying.

Now, I know a lot of you want to argue that there are circumstances outside of your control that are causing your restaurant to fail. It’s the economy, it’s the location, the community is oversaturated with restaurants, etc. The list is endless.

But how have others thrived when the odds were all stacked against, them while others crumbled because of these circumstances?

It boils down to this one reason: You.

YOU. The owner of the restaurant. The person who started with a vision and built it from the ground up.

I’ll give you three reasons why you are the leading cause of your failing restaurant — and what you can do about it.

1. You Don’t Have a Vision

When businesses fall into a rut, the biggest reason for this rut is because they lose sight of their vision. What is it that drives you every single day? How can you expect your team to go to bat for you every single day when you don’t even remember why you started this business in the first place?

Get back in touch with why you are in this business. Why did you get started? Why is your restaurant the best place to visit when there are other restaurants in your area? Once you can answer why you’re in this, then you will start seeing the vision of why you got started.

That could mean that you need to rebrand, but at least you will bring an energy into your business that was missing, an energy you need to be that driving force of your team.

2. Your Mindset Is Wrong

I remember working with a restaurant owner who said that they didn’t believe that their mindset was off. They only believed that their business wasn’t working for them because of outside circumstances, but that was their mindset — they didn’t believe they had power over their own business.

The number one reason why most restaurants fail is because the owner has given up. Why continue to fight or move forward if the owners have thrown their hands up in the air?

In order to be successful in this industry, you have to not only understand why you’re in the industry, but believe that you have all of the power. There is absolutely NOTHING that you cannot solve. But that’s only the first step.

You need to shift your thinking from a victim mentality and shift it toward being in control of everything that happens to your restaurant. Every choice that you make for your restaurant has a consequence — good or bad. When you make a choice to do nothing, you’re creating a consequence based on your inaction.

When you focus towards solutions, you will never have problems that you cannot fix.

3. You Have No Systems or Weak Systems

The last reason why your business is failing falls onto your systems. Stop working yourself to the bone for inefficient results. Everything that everyone does in your restaurant must fall into a system that has been created.

How did McDonald’s become so successful?

It boiled down to the systems that they created. When they thought of the idea for McDonald’s, the founders knew the way to stand out was to create a system to have the food to them instantly.

When you create strong systems, your business flourishes because you don’t have to worry about whether or not something is getting done. Systems work, which is why so many growing restaurants focus on training and development.

But you cannot focus on training and development without developing yourself as the owner. When you open a restaurant, you are telling your employees to follow you. When you lose your vision, when you stop trusting your systems, and when you stop developing yourself, you lose...and so does your team.

Your business thrives or fails based on who you are as an owner. You are taking all of the risk and that’s terrifying because if it fails, you lose your livelihood. The staff just loses a job, something they can find again.

You are a leader. Everything that you do bleeds down into your team, and the customers will be able to feel it because it will affect your team more than you could imagine.

Your restaurant thrives or fails because of you, your systems, your vision, and your mindset. Make the promise to yourself to continue to fight because your team needs you. When you show them that you have their back, they’ll prove to you that they have your back.