Thursday, March 28, 2024 | Ramadan 17, 1445 H
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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Most restaurants fail. Here is why.

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I am one of the many people that have come up with the idea of opening a restaurant at least once. In my case I failed to open the restaurant because of adverse circumstances. Others opened, but failed to generate enough business. For example, Mr. Mansoor, an Omani gentleman who shared with me his story.


At first he thought that a restaurant could have been a source of passive income for his family. He felt that money would have come automatically after opening. Unfortunately, he ended up being one of the 60 per cent of restaurants that close in their first year. Surprised? How about 80% of restaurants close within their first 5 years? Why so many restaurants fail? Well, location is probably the most important factor. Although there are some exceptions when established chefs can open in the middle of nowhere, and still have plenty of customers, for new restaurants that is hardly imaginable.


Often, restaurant owners fail to choose a convenient location. Not everyone is willing to take a detour to try some new food experience. Especially because food is such a personal preference, that we seldom abandon our comfort zone.


That brings to the second main reason why many restaurants fail: the type of cuisine. Mansoor thought carefully about what type of cuisine he wanted to promote. He wanted a pizza place, or a Turkish fast food. Unfortunately, due to the pandemic, he could not find a chef able to cook a good pizza. So he ended up settling for his second option, a Turkish fast food, mostly serving doner kebab and other small dishes.


At the beginning things seemed to pick up fast. Mansoor was confident that soon he would have paid back the initial investment. But when the hot season started, his chef decided to go back to Turkey, and left Mansoor with no backup. He closed the restaurant for nearly a month while he found a replacement chef. That caused business discontinuity, and when he finally opened again, most of the habitual customers did not come back. Mansoor told me that it was like starting all over again, but this time with a chef that was not originally from Turkey, so the food was not authentic as it was before. He shared with me that at that point he considered changing the restaurant to Indian cuisine, since the chef was well versed in it. But unfortunately, the cooking equipment he bought was specifically designed for Turkish food, so he had no choice, but to continue. That triggered the third reason why most restaurants fail: manpower.


Because the business slowed down during the summer, he was forced to let go one of the waiters to save some money, but another one quit soon after. So, Mansoor had to work at the restaurant himself, and in the weekends he had to bring his son along to help out. His dream of a passive money-making machine evaporated in less than 6 months. By the 10th month he told me that he had enough, and decided to close at the end of the commercial lease. But this is not the end of the story, fortunately. Next week I will share how Mansoor managed to turn things around and he is now running a successful food business.


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