Fate of Vancouver Restaurants Spells Need for Better PlanningPosted by Jessica Oman
Last year, we were sad to learn of the closure of Ensemble Tap, a restaurant I had been meaning to try for months. As someone who eats out – a lot – I do spend time evaluating what makes a restaurant succeed or fail, and muse on what the owners could have done to prevent failure.
Business plans are one of our core service offerings, so we never like to see businesses shut down. I really believe that poor planning is at the heart of many of these failures. Restaurant owners don’t adequately assess their target market (everyone eats food, so everyone should want to eat here, right?), or they underestimate how much capital they’ll need in order to open ($100,000 is a lot of money! That should be more than enough). Other mistakes I’ve seen are thinking that the restaurant has no competition (um, okay…) or that it will be filled to capacity every night (see “competition”).
We’ve all seen restaurants that were understaffed, where servers were poorly trained, where branding was inconsistent, or prices too high for the quality of food. All of these factors can cause a restaurant to go under, and most can be avoided or minimized through better planning.
In the form of a business plan, of course.
If you’re thinking of starting a restaurant in any city – let alone one as competitive as Vancouver – you need to look at all of the ingredients in your success recipe and make sure that one rotten item isn’t ruining the entire formula. For example, say you have an amazing and well-known chef, unique recipes, an intimate dining room, and a great, affordable location, but to keep costs down you make your portions really small. Or you don’t adequately train your staff. Just one negative factor can keep customers from ever coming back, simply because they have so many other options.
Also, don’t forget that there are lots of substitutes for going to the restaurant – so you’re not just competing with other restaurants, but with take-out joints, grocery stores, even that pretentious smoothie bar at the neighbourhood gym. People can fill their tummies in lots of different ways, and to convince them to refuel at YOUR place, you’ve got to have one incredible offering. To get them to come back again – that’s the real recipe for success.
Some restaurants are really creative about getting people to come back over and over. HUB Restaurant leaves (or used to leave) a feedback card with every bill. If you filled it out, you got a coupon to come back and get a free dessert or an appetizer. This is so much better than a loyalty card because it guarantees you’ll try something new on the menu and get to know the restaurant’s food so you can recommend it to your friends.
When you’re writing a business plan for your new restaurant, don’t just consider all the things you need to do to get going – think about what you’ll do to keep growing. Have a system in place to get feedback from your customers. Find out what they like and what they don’t, and as soon as you see a trend, change something and invite them back.
What do you think restaurant owners could do to keep people coming back so they can stay open for longer? Share your stories in the comments below.