No one walks into opening a restaurant on a whim. In fact, many restaurant owners constantly have abysmal restaurants failure rates ringing in their ears.
And while getting past your first anniversary or surviving another year in business is indeed cause for celebration, kicking back and coasting on your current success is a recipe for future failure, particularly when you factor in the many challenges looming ahead.
Understanding these threats and taking proactive management steps can help you navigate these obstacles and enjoy a bright, bustling future.
1. Steep Competition
There are currently more than a million restaurants in the U.S. accounting for approximately $782.7 billion in annual sales, according to the National Restaurant Association (NRA). How many of these restaurants are in the neighborhood of your restaurant or even on your block?
The fact is that while many restaurants do fail, plenty of others manage to keep their doors open — and not by happenstance, either.
Adding your restaurant to the list of success stories requires constant vigilance: What will distinguish you from the pack?
From making smart hires to planning the perfect menu, attention to detail, consistency across everything you do, and a growth mindset all contribute to your solvency, and will continue to be essential factors looking ahead in the restaurant industry.
2. Changing Consumers
Consumer tastes change. The best way to keep them coming back for more? Change with them. Keeping up with the latest market trends is a must-do for today’s restaurant owners.
This doesn’t mean completely revising your restaurant every time a new trend appears on the horizon, but it does mean being open to new ideas.
You don’t have to transform your restaurant into a food truck, but debuting a few menu items capitalizing on the food truck-fueling ethnic cuisine trend can help you keep your restaurant fresh and appealing to today’s diners.
Knowing what diners like and dislike is even more important than ever due to the fact that consumers — whether you like it or not — now have a voice and platform through which to share their dining experiences thanks to social media.
Wondering what else diners are looking for right now? Check out the NRA’s handy roundup of top food trends for 2016.
3. Technology Transformation
There’s no doubt that technology is transforming the face of the restaurant industry. From online reservations to mobile payment methods, these changes are here to stay. But which will best serve your particular patrons, and how quickly do you need to adapt to these lightning-fast changes?
Unfortunately, these questions are without clear-cut answers. Whether you debut iPad ordering or partner with a food delivery service ultimately depends not only on the type of atmosphere you’re looking to support in your establishment, but also on your ability to execute.
Because while technology can indeed be a boon when wisely used, it can also be a bust if it detracts from service, eliminates the personal element, and/or interferes with the overall diner experience.
A rule of thumb? Technology for technology’s sake may lead to trouble, while technology to solve a particular challenge or meet consumer demand has people-pleasing potential.
One technology trend all restaurants need to be prepared for, however? Social media and online reviews. In a world in which a mere half-star drop in Yelp ratings translates to the risk of millions of diner dollars lost, proactive social media strategies will continue to be a critical endeavor in the future.
But social media doesn’t have to be a noose around the neck of your restaurant — particularly for owners who choose to view it as the chance to interact more with customers, enhance loyalty and improve their overall brands. Yes, doing so requires constant effort. But it also adds up to sought-after results.
4. Economic Uncertainty
Between rising food prices, the low wage argument and economic variances, many factors jeopardize the future of tomorrow’s restaurants. Restaurant owners are constantly facing decisions which the ability to make or break their establishments.
While these situations may not be easy, managing them with smart strategies — from cutting hours to assessing food buys — is all part of ensuring a healthy bottom line.
Ultimately, you don’t need a crystal ball to know that restaurants will continue to face more than their fare share of challenges moving forward.
However, the flip side of the coin reveals a more heartening prospect: These same challenges can be leveraged into unprecedented opportunities by restaurant owners who are prepared to proactively take them on.