The Four "C"s of Restaurant Success

As a new business, restaurants are consistently ranked among the leaders for failure rate. According to a study conducted by Michigan State and Cornell Universities, 27% of new restaurants were closed after only 1 year in business. After 5 years, 60% of them were no longer in business.

In today's fast paced society, where we dine out so often, why is it that so many new restaurants fail? More importantly, how can a new venture avoid failure, and achieve the success they desire?

It really comes down to four areas that can make or break any food service operation. If you can take care of these four, you will be on your way to success. The four areas are (not necessarily in order of importance):

Cost
Customer Service
Consistency
Cleanliness

If you can consistently address these areas, you will see success.

Cost

One of the biggest reasons restaurants fail is management's inability to control costs. The biggest cost killers are food cost and labor cost.

Controlling your food cost is more than just buying at the lowest price (although not overpaying is important). It also requires watching how much you are wasting, and how much is leaving your storerooms while no one is looking. To help control food cost you should do an inventory on a regular basis. This will let you know how much food you have, and will help prevent over-ordering. Set up "par sheets" so you know how much of each item to prepare for that day. This will help in minimizing the overproduction of food that will get thrown out at the end of the day. And finally, make sure you have good security measures in place so your profits aren't walking out the door at the end of the shift.

Controlling labor costs is a matter of scheduling. You want to make sure you have enough people working to handle the busy times, but you must minimize having too much staff standing around during the slow periods. This comes down to knowing your business. It doesn't take long to figure out when the busy times are, and schedule accordingly.

Customer Service

Customers are the reason you are in business. I'm reminded of a waiter I once heard jokingly commenting, "Working here would be great if it wasn't for the customers". While I agree that some customers can be demanding, most problems could be avoided by doing a better job of taking care of the customer up front. It's much easier (and less costly) to avoid a problem, than to fix the problem after the customer is upset.

Make the customer feel welcome, and that you truly appreciate their business. They could have gone anywhere, but they chose to come to you. Train your staff, and demand that they treat the customers as honored guests.

Within reason, do what it takes to keep your customers happy, and to fix any mistakes (even if the mistake wasn't your fault). In the long run, it will pay off. It's less expensive to keep a customer than it is to attract new customers. While they may not tell others about what went right, be assured they will talk about what went wrong.

Consistency

Another key is to be sure that what you offer your customers is consistent. That applies to service, quality of the food, cleanliness, etc. If I am a returning customer, it's because there was something about your restaurant I liked. I can back because I wanted that experience again. If I order the same thing off the menu I had last time, I want the same recipe, prepared the same way. My grandmother could get away with a pinch of this and a dash of that, but in a restaurant setting, you're better off having a recipe and making sure your staff is following it.

What about taste? Well, I've found that taste is a matter of personal preference. What I may feel is a great dish, someone else might think is too spicy, or too bland. You can't make a dish that appeals to everyone. However, you can make sure that the dish you do prepare is the same every time.

Cleanliness

I'll let you in a little secret. The customers will make a decision about the quality of the food long before you set a plate in front of them. Service matters, presentation matters, and above all else, cleanliness matters. I recently visited a little take-out place that I almost walked out of because it looked dirty (I didn't because it was in another town, and I didn't know of any other place that was open that late). The food was surprisingly good, but when I talked to people in the area, they all said they don't go there any more because of the appearance.

If your restaurant is clean, your customers will have more confidence that you are preparing safe, wholesome meals. If the place is dirty (especially the restrooms), you will have lost their confidence long before they actually try the food.

The difference between success and failure comes down to your ability to do well in the areas of cost, customer service, consistency, and cleanliness. If you do well here, you will have a better chance of seeing your dreams come true. If you fail in these areas, your business life will be short lived, and you'll have to sit in wonder of the places that do succeed.