by: John Self, The Service Doc

We’ve all seen “closed” signs hanging in the windows of empty restaurants, especially since COVID tore into our industry and lives. We probably just glanced at the signs but didn’t really see them. Closed signs are such a common sight that we don’t give them a second thought, they just blend into the background, like highway billboards advertising milk or cars.

But the closed sign represents much more than just another building available for rent. Behind the sign lies human tragedy. Dreams crushed, families torn apart, savings emptied, and best friends turned into bitter enemies.

It also means that someone dared to act and breathe life into a dream. The only good news is that this person is not going to spend their life wondering if they should plunge into the risky waters of restaurant ownership. They know. For better or worse, they know.
Most entrepreneurs know and even understand that starting a business is risky, or at least they do intellectually. But that’s not the problem. Owning your own business is an aphrodisiac that can blind owners from seeing any flaws that the concept or the planning may have.

The problem lies at the core of the dream. The owner can get carried away by their passion to open their restaurant and will not tolerate anyone who offers any criticism. The entrepreneur stops listening to anyone who doesn’t agree with them, ”They’re just negative”. Some of this passion is necessary to push through the thousands of problems necessary to get the restaurant open, but not being realistic, not seeking out legitimate people who could point out legitimate concerns that could be addressed BEFORE opening, is a mistake. Sometimes a fatal mistake.

You may have heard that the failure rate for new restaurants is 90%. That’s pretty damn high. It is also completely wrong. Research (mine actually) has shown that the actual restaurant failure rate for the first year is closer to 25%. This is bad enough, but sure not 90%. The majority of the 25% failures in the first year were the result of the owner being completely unprepared, both financially and in experience. They didn’t have systems, business plans, or, in many cases, restaurant experience. The new restaurant owners who listened to legitimate criticisms (and acted on them) made mistakes too, but not fatal mistakes.

Customer service or the lack of it, is another cause of new restaurant failure. Established businesses fail when they become complacent. Yes, the public appreciates and will flock initially to new restaurants. But that only lasts short term. After the dust settles, customer service is what will nourish and sustain the restaurant. Restaurants that are committed to long term success always place customer service at their core. Take a look at employees of companies known for customer service excellence. You’ll see low turnover, great morale, and passionate loyalty that customers can actually feel.

When a company is based on customer service, even the inevitable problems that occur provide opportunities to actually strengthen customer loyalty. Because the business has been built on relationships, your customers often work with you to help solve problems, not turn away like a fickle lover. The value of relationships, of your employees, and ultimately of customer service cannot be overstated.