Common Mistakes Restaurant Owners Make

Starting a restaurant is serious business: from all of the planning and research to menu creating and marketing, there’s so much that goes into opening an eatery. With so much to do to keep the business afloat, it’s no wonder that around 30% of restaurants fail within their first year. In this article, we’ll break down some of the most common mistakes that can cause restaurants to fail—and how you can steer clear of them to set your business up for long-term success.

Bad Financial Management

It’s no secret that restaurants require quite the pretty penny to run, which is why financial management is crucial for any eatery. When a restaurant doesn’t have a solid money management plan, the business can suffer significantly. Whether it’s a lack of a reasonable budget, overspending or improper cost tracking, these factors can sink a restaurant quickly.

How Do You Manage Restaurant Finances?

It’s crucial for restaurateurs to create a reasonable budget, track expenses, manage their inventory, and set reasonable menu prices that’ll generate revenue. Additionally, restaurant owners should perform frequent audits of the restaurant’s finances to make clear plans for the future. Check out our guide on How to Manage Restaurant Finances for a thorough breakdown.

Poor Food Quality

Serving low quality dishes or incorrect orders to customers can tank a restaurant real fast. With so many options in today’s market, providing diners with top-notch food is a requirement, not a feature. But what can cause issues with the food quality of a restaurant?

What Can Affect A Restaurant’s Food Quality?

For starters, low quality ingredients can definitely make or break a menu. If the ingredients in a dish don’t taste as they should, it’ll turn away customers quickly. Another factor is poor quality control. If low quality ingredients get included in a shipment and are missed, these free radicals can negatively impact your food. Finally, inconsistency can affect a customer’s opinion of a restaurant. If someone visits a restaurant, orders a steak, then comes back and orders a steak again, they’re expecting that steak to look and taste the same as the first time they had it. However, if their steak comes cooked incorrectly or is smaller than before, they may not return due to a lack of consistency.

How Can a Restaurant Improve Its Food Quality?

Implementing rigorous quality control checks, utilizing detailed recipes, standardizing cooking techniques and sourcing high-quality ingredients are key components for any successful restaurant.

Bad Service/Staff Management

For the customer, bad restaurant service is a big deal breaker. From rude staff to inattentiveness, poor service can have a significantly negative impact on a restaurant. But what can cause bad service? There are several factors that contribute to subpar service, but some big ones include:

• Poor or non-existent staff training—It’s vital for any restaurant to properly train their staff members on service expectations, hospitality, and industry standards. Without the right training, staff members can’t consistently deliver 5-star results. 


• Inadequate staffing—An understaffed restaurant can lead to a whole host of service issues. Whether it’s long wait times, overworked employees, or high employee turnover, these can greatly impact how a restaurant runs.


• Low employee morale—This can be caused by many factors, but whatever the reason may be, low employee morale can really sink any ship. Poor morale can lead to bad service, rude staff members, and a high turnover rate.

How Can a Restaurant Improve Service Quality?

Restaurant owners can easily improve their service quality by focusing on these main factors:

• Comprehensive training


• Proper staff management


• Optimizing operations

Providing staff members with comprehensive training sessions and materials can set the expectations that need to be met for them to deliver exceptional service. Additionally, having the right amount of staff members and implementing proper staff management techniques can keep things running as they should. Finally, it’s vital to keep operations streamlined, whether that’s optimizing kitchen workflows to minimize wait times or ensuring table turnover is completed in a timely manner.

Lack of Business Plan or Market Research

As Benjamin Franklin said, “If you fail to plan, you’re planning to fail.” For restaurants, that saying couldn’t be more true. The lack of a strategy or plan can greatly contribute to a restaurant’s failure by leading to a host of issues. Without a roadmap, how can anyone reach their destination?

Many owners fail to do crucial market research prior to opening their restaurant, which can have a domino effect on their success. These vital components include:

• Conducting a competitive analysis


• Identifying target market


• Creating a marketing plan


• Surveying potential locations

Additionally, failing to follow up this market research with a well-informed business plan can be detrimental to the restaurant’s longevity. In order to avoid premature failure, owners should take the time to write a thorough business plan so that they have that all-important roadmap.

Overcomplicated Menus

Having a menu that caters to everyone’s tastes is important, but it shouldn’t have everything and anything on there. An overcomplicated menu can cause several significant problems, and ultimately lead to a restaurant’s downfall. 

Signs of An Overcomplicated Menu

Restaurateurs should be on the lookout for any and all of these attributes with their menu so as to identify overcomplications.

• Too many menu items—Having too many options on a menu can not only overwhelm customers, but it can overwhelm staff.


• Too much of a variety—A menu with too much of a variety in dishes can be confusing all around. Not only does this affect the decision-making of the customers, but it also negatively impacts branding and the bottom line. For example, if a restaurant labels itself as a pizza joint but it also carries falafel and sushi, not only is that confusing for staff and guests, but it also means ordering more ingredients than necessary just for those specific menu items.


• Poor Menu Design—Menus need to be laid out and organized for ease of use, so a hodge-podge one can turn customers away. When designing a menu, restaurant owners should take into consideration the menu’s size, amount of items, the layout, and even the color schemes.


• Confusing, long, or too-short menu descriptions—Menu descriptions need to be, well, descriptive. If they lack any explanations of the menu item, have too much description, or are confusing, that can contribute to poor customer turnout.

To avoid having an overcomplicated menu, restaurant owners should audit their current offerings to streamline the selection. They should also take a look at what items fit into their brand identity and make sure the overall design is user-friendly.