We have seen it over and over again – small restaurants crumbling under the financial climate and high competition.
As a restaurant owner there are always going to be risks and times of low sales, but there are some points that require consideration in order to establish a stronger, long-term successful business.
Here are some ideas that may not only help save your restaurant, but encourage an informed decision to help it thrive.
1. Don’t panic when things appear bleak
As with any area of our lives, there are peaks and troughs in our financial status. In terms of restaurants this may be periods of high sales that then dip to almost nothing.
This is perfectly normal and although it is difficult to get through the hard times there is always a light at the end of the tunnel.
What’s important is to understand what is causing the downturn in clientele and making the necessary changes to improve the situation.
2. Tried-and-true franchise options
Many small restaurant owners opt to open a new restaurant and create a new brand, but this is a large uphill battle full of mistakes and lessons.
Franchising is a solid option for many entrepreneurs looking to open their own restaurant while having the backing of a thriving business model.
It’s also largely successful, with an extremely high success and profitability rate. In fact, the fast food market in the UK stands at close to £30 billion because of the popularity of fast food chains. (Statistic source: https://www.pointfranchise.co.uk/I-53-fast-food-franchise/)
The franchisor’s valuable guidance helps the new business thrive and breaks down a significant amount of hardship in establishing a successful company.
From assistance in choosing a location to staff training, creating a website, providing marketing material, and guidance regarding insurance and legal compliance, it’s a far safer bet than doing everything solo.
3. Planning to sell? Give it more time
The recommended period of time to plan the sale of your business is 2 years. In this time you need to be almost constantly collating information to pass onto the buyers or solicitors.
There are many items that you will be required to produce before the final sale is made; three years of proof of tax, two years of credit history, documents relating to debts and many more.
If you have decided that you need to sell your business, or are making a snap decision due to a crisis, the length of time it will take to make a sale needs to be considered.
This is not something that can be done in a month, so decide whether it’s best to try to overcome the current situation or put up the white flag.
4. Can the business survive without you?
There are many forms of small business’ that will solely rely upon their owner’s expertise and contacts.
A solid risk management strategy is to thoroughly train employees so as to delegate responsibility and place less dependence on the owner.
This allows employees to both handle day-to-day operations and mitigate any situations with clients or other aspects of the restaurants.
They must know proper equipment handling, safety procedures and how to provide appropriate customer service.
5. Don’t wait until it’s too late
If sales are not up to expectation, evaluate what may be causing it. Often, the problems are internal rather than external.
Maybe it’s time to make a change to the menu or work on your marketing tactics to bring in new clients. Perhaps online reviews have been affecting the restaurant negatively.
Whatever may be causing the situation, it’s important to strike back while you still can and make changes that will push the business back into profitability.
Wait too long or be complacent with low sales and the business may fall into too much debt to crawl back into the green.