Why Do Restaurants Spell "F-A-I-L-U-R-E"?

And it is not just beginning chefs who find the restaurant business challenging.  We've seen many top names bite the dust in utter defeat.  You have too.  It is rather axiomatic that restaurants are hard to start.  And there are lots of reasons given, such as:

• Restaurant owners don't know business
• Poor location
• Cuisine that doesn't match the location
• Start up costs are out of line

And all of these, or none, may apply to your business.  Restaurant business plans aside, there is something else going on here.  What, for instance, is a "failure"?  According to most sources that count business success, there are several factors that might put a business into the failure column.  A few of these are:

• Change in ownership.  If your restaurant sells out to another firm or entrepreneur, your business will be counted a "failure".  If you take on a partner, your business will be counted a failure.
• Change in address.  If you move to a larger location, your business is counted as a failure.
• Change in corporate structure.  If you incorporate your business, you business is counted as a failure.

While these things are true in all businesses, the rapidly evolving nature of restaurants means that things like ownership changes are just more likely to occur.  A restaurant that expands from serving just dinners to also serving lunch, and maybe breakfast, may indeed want to take on a new partner to share the management responsibilities.  A restaurant that starts as a small home catering business may move to larger facilities, and incorporate.

These kinds of rapid changes just happen with greater frequency in the restaurant business.  Few manufacturing or retail businesses experience this type of dynamic change.

Sure there are failures.  There are in every business.  But don't let the failure rate in restaurants discourage you.  Just go in better prepared and you will do just fine.