Top Mistakes Restaurant Owners Make, and how to avoid

So you are a restaurant owner, and you want to know what top mistakes to avoid to stop wasting your money? Whether you are a small business, a big business, or somewhere in between, you will benefit from becoming more efficient with what you do, and by pointing your efforts in the right direction.
Whilst it might sound great to have a turnover of one million dollars, if you only keep $10 at the end of the financial year, that turnover hasn’t turned into profit, which is some of the reason you have gone into business for yourself in the first place. Please read our post on Top Mistakes Restaurant Owners Make and save yourself from unwanted trouble!

Top Mistakes Restaurant Owners Make will cover:

1. Equipment
2. Lighting
3. Staff
4. Suppliers
5. Offering

1. Equipment

Is your equipment efficient and reliable? Or is it power hungry and/or breakdown often, either when you need it most, or using up staff time to work around it? Does it do what you need from it? Or does it lead to lots of work from your employees to make it to get the job done for you?

If you cannot rely on your equipment, or it is costing you in excess of what it brings in for you, you need to assess whether it has a place in your business, or not.

2. Lighting

Not only does lighting play an important part in making your restaurant or cafe feel welcoming and not cold and clinical, as we spoke of in this post here, but it also plays a role in your electricity and maintenance bills.

With advances in technology, LED lighting can replicate the warm feel that was only achieved with incandescent and halogen bulbs and downlights. But it also decreases the amount of electricity used, and reduces the time maintaining the lights by replacing bulbs that have blown.

Restaurants and cafes might have their lights on for over 10 hours daily, which can equate to over 2,000 hours. That would be 2 incandescent bulb changes, as the usually last a maximum of 1,000 hours.
Every time a bulb needs changing, you need to get someone to change it, which costs you time and money.

Here is a link to Tom’s Guide about lighting; which will cover more of the technical information you need to take in to account to make a good decision for your company.
While you do need to make the change to good lighting, if you haven’t already, you need to make an informed decision so you can take action once and get it right.

3. Staff

These people will make or break your business. They really are your ambassadors, especially in a hospitality business. You can easily audit whether you cheese on toast is delicious, your coffee isn’t burnt, or your steak is cooked to perfection. But what about your staff?
Some customers, rightly or wrongly, will make a fuss about bad service (hopefully in a constructive way). Others won’t, and you’ll never see them again. As repeat customers are key to flourishing in the hospitality industry, you need staff that are reliable and able to present you and your brand in the best possible light. This will keep customers coming back, which is essential.

So how do you get good staff? Whilst technical skills are important, and an attitude of putting in effort, if the staff member isn’t aligned with your values and the personality of your team, you and they will be going in different directions.

This is why personality testing is something that is an important metric to take into account. I am sure you have heard of the Meyers – Briggs 16 personalities? This shows what people think, say, and do, but also shows the motivation and values they have which leads to these things.

Here are some links to some free tests so you can see what I am talking about:

https://www.16personalities.com/free-personality-test

https://www.truity.com/test/type-finder-personality-test-new

I highly recommend getting a paid test once you narrow down your applicants, as the money you spend on the test could save you a lot of conflict and crossed wires down the line. Better to pay a little up front, than pay a lot down the line…

Whilst skills are important, as long as they have a general understanding of how to do the various things you require them to do, a specific technical skill can be taught. But it is much harder to teach values or a personality type, and so this is why understanding who you could be potentially employing is such a pivotal part of the employment process.

4. Suppliers

Without them, you wouldn’t have a product to sell to your customers. So they are also a very important part of making an offering to the public that will encourage them to choose your cafe or restaurant. Are your suppliers consistently giving you a good product, when you need it?

Are they able to help you when you have made a mistake, or need a quick refill?

Do they source their produce from environmentally responsible sources, and morally responsible sources too?

Are they doing well, or are they often short of things? That is okay, as you could either go with a new supplier who does more, or simply diversify and have two suppliers. That way, if anything goes wrong at their end or yours, you have more opportunities to get the supplies you need to keep your business in operation.

These are important questions that many customers are interested, and if you do take a societal view on sourcing your product, this is something that is good to share with your customers – many of them will want to know these things!

5. Offering

What do you offer? Are you offering it because you like it, or because you think others will like it? Or even because the other cafes and restaurants offer it? There is nothing wrong with these approaches, but it is important to know why you are selling something. Secondly, it is important to know does it actually sell!
And if it does sell, how much money does it make you?

You do not have to cut back everything just to an efficiency perspective. That kind of cold and logical based approach could well lose you customers, and just making money isn’t the reason why most of you got into the hospitality industry in the first place. But it is good to know what makes you money, and what are the loss leaders you offer –  the offerings that get people into your establishment, that you might not make much profit on, but does provide a way to get them to look at the rest of your offerings.

Do you know the facts and figures about all the offerings you make?
When they sell, how much they cost you to make, how much room that take up, whether they are easy to source from suppliers, etc. ?
This doesn’t need to be the guiding light on why you sell what you do, but you should know these things.

And something like a simple 10 cent increase could turn something from losing your money to making you money. Over the year, it will add up. No one likes gouging, but no one expects you to fund their meal choices either.

That is our take on Top Mistakes Restaurant Owners Make. Over to you…

Thank you for reading our Blog Post. Being a restaurant or cafe owner is usually a decision that is a long term commitment. It isn’t a job that you can give 2 weeks notice for, and there is something about it that has attracted you and is a passion for you and your family. Given that long term commitment, these things that you can do, although some might seem small, will have an increased effect when you take the long view. The sooner you start addressing the financial leaks, the sooner you will have accumulated more money to spend on the things you would prefer to.

I hope this post on Top Mistakes Restaurant Owners Make will give you food for thought, or should that be thought for food? – and help you to address things that are holding you back from the success that you desire in your business.

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We look forwards to hearing from you!