One Year and Done

https://media.timeout.com

According to a frequently cited study by Ohio State University on failed restaurants, 60% do not make it past the first year. Why is it that that so many first year restaurants go out of business? Business Insider’s  Senior Reporter, Richard Feloni investigated and talked to Food Network Chef, Robert Irvine and wrote the article “ Food Network Chef Robert Irvine Shares The Top 5 Reasons Restaurants Fail”. The conclusion of the interview with Chef Irvine was the two biggest obstacles were poor staff management and lack of accounting skills.

The problem that is very obvious to me, is how poorly the owners are at accounting the food costs, labor and how to make a profit with taking in all these different factors. Most first time owners have very little experience in this side of the business. As you can see in any job in life the longer you have worked at it the better you become. A trend that is seen in the industry and what Chef Irvine pointed out was these businesses started with poor management and lack of experience in the industry.

Another big reason that the businesses go under in the first year is because management of the staff is more complicated than a typical customer might see it as. Chef Irvine says, “Unlike other businesses where you may find yourself managing just one group of people with one specific skill set, restaurants have a ton of moving parts requiring a diverse group of people with varying skills sets, talents, and personalities." The restaurant can’t rely on the reputation of good food it also needs to have a sound business plan in place to be successful. This is what the young business owners can learn over time it is not just about what you serve on the table, it involves many other aspects to have a successful long term restaurant in the industry.

Future Research Question: What makes restaurants that serve similar food sucessful or unsuccessful?