Published in Business
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3 reasons why restaurants go out of business

3 reasons why restaurants go out of business

I’ll be honest. This did seem a little random, but I felt I had to write this based on some recent not-so-stellar experiences eating-out. 

We’ve all seen our favorite locations get shuttered up. It’s been heartbreaking to see places where we had first dates, special birthdays, and anniversary dinners disappear because they couldn’t keep afloat. My heart has been broken for them and I hope that their owners and employees have been able to find alternatives.

There are also restaurants which have cropped up since and show signs of faltering even as they’re starting out. Can you tell the ones which will close down in months from the ones which have the X-factor to stick around?

In my opinion, if restaurants truly invested heart, time, and money in these three factors, they would have people lining up at all hours. What are these three truths? Restaurateurs, pay attention:

  1. Invest. In. Service.: Don’t go cheap on this. When I say ‘invest’, employ people who love food passionately and are outgoing. Who will always smile and greet you with joy. Who will frequently check in and attend to your requests but not forgo that smile. Who will let your customers know that the food’s running late, but with an apology and a smile. Who will greet you on the way out instead of just ignoring you and assuming you won’t be back. Train your employees in positive language and in the art of listening. About 9 years ago, I was at a top-tier restaurant where the staff overheard a guest saying to another guest that it was his birthday. No one at the table knew that before. But at the end of the meal, the staff brought out cake, sparklers and wished him for his special day. It was so unexpected and done with such panache. That’s the sort of place you’d want to return to, wouldn’t you?

2. Don’t skimp on quality: It doesn’t matter if you’re a connoisseur of fine food or just ‘meh’ about it, chances are that you’ll know if the ingredients are fresh. How many places have you been to where the meat is rubbery, the vegetables suspect, and the rice dry and stale? Quality and freshness matters. Even in tough times, restaurants should not be skimping on the best and freshest ingredients. Customers will figure it out and it’s just not worth it.

3. Don’t skimp on take-out portion sizes: After the pandemic, I’ve been noticing that some restaurants have vastly reduced their portions for take-out. I know, these are tough times. But making this obvious change deters and puts customers off. A month ago, I paid $9 for a shrimp salad appetizer at a restaurant. The salad was great — the only caveat was that the $9 dish had just two pieces of medium-sized shrimp! Even though the rest of the food was great and the ambiance was nice, it’s unlikely I’d go back.

To be clear, there are possibly other underlying complexities as to why restaurants go out of business. Financial issues, competition, soaring rents, lack of labor, an uninspired menu, an absent chef — there are many reasons. But from experience, the ones that have closed down have also suffered from one, two or all the three problems outlined above.

If you’re in the restaurant business or know someone who is, share this article with them. Do they agree or disagree with my assessment? Please feel free to share your thoughts in the comments. Here’s to hoping your current favorite restaurant is here to stay. I sure hope mine is.