Here are always complaints that when they opened their own restaurants after the epidemic had subsided, they had no improvement for the first two or three months and had no choice but to resell them. They could not believe that they met the Three-month Death in the F&B industry!
So, why does the “Three-month death” phenomenon happen? What can be done to effectively avoid a three-month closure and keep the restaurant alive?
1. Why Do Restaurants CloseThere are a million ways to fail, but the three-month Death can be summarized in the following in four different ways:
Business was Never Good
Business was Good, but not Sustainable
Sudden Death Caused by Financial Problems Instant Collapse
Caused by Powerful External Factors Intervention
The business may have started well at first, but it was suddenly crushed by accident. These accidents can be broadly classified into two categories:
(1) Natural Disasters Natural disasters are completely unavoidable, as in the case of the COVID-19 pandemic. When a block is suddenly fenced off for renovation, it is common for a row of restaurants to become “out of sight” in an instant, for a month or two to several years, and it is also difficult to prevent through prior investigation. In short, such a situation in that people normally has no power to change and reverse is referred to as a natural disaster.
(2) Man-made Disasters Essentially, man-made disasters are one’s own failure to do the right thing. For example, the sudden death caused by financial problems, as well as the encounter with food safety problems, hygiene problems, fire hazards, the collective exodus of staff, and the sudden abandonment of the category by the market.
These are problems that restaurant owners can do their own best to avoid in advance. Owners could save a lot of trouble if the relevant aspects are done well.
2. Reasons and Solutions for the “Three-month Death”
In the following, we will look at the four types of death just mentioned above and examine their causes as well as propose corresponding solutions. This refers to the insufficient flow of customers, which means there is a problem with attracting new customers. There are two kinds of situations.
Case 1 : Guests do not know your restaurant
Reason 1 :Poor Marketing Campaigns
Solution : Marketing campaigns are essential when opening a new restaurant. The owners need to do marketing campaigns according to the nature of their own restaurant category, whether it’s sending out flyers, investing in takeaway platforms, doing various discounted top-up activities, or launching tastings occasionally. Nowadays, marketing and promotional activities have been crucial as the taste of the dishes, being the basic skills of catering, and are essential except in a few special circumstances (such as selling boxed lunches on the train cart).
Remedy : After opening the store, there is insufficient marketing and publicity, and the customer flow is small. If your store is still early in the games, and you have adequate conditions, you can consider investing some additional budget for marketing and publicity. At the same time, you could consider offering some very competitive discounts and discount combinations (but do not do it at a loss) – don’t think that if you discount too much, you will “lose money”, or you will be able to “screen out the wrong customers”… The restaurant will go out of business if it does not survive. And for a restaurant to survive, especially for those small owners, it needs customer flow first, not high prices.If the problem has already occurred and has dragged on for some time, and additional marketing costs cannot be afforded, the worst move is to drag it out aimlessly. It will burn up the costs, and saps passion and patience for business.
Reason 2 : Wrong Site Selection
Solution : Always make rational decisions before opening a restaurant, don’t be hasty and rash.
Process of Site Selection : First, calculate your break-even point based on the category you intend to operate in, the size of your store, and the target costs, and then work out how many tables you need to seat and how many tables you need to turn over each day in order to achieve no losses.
Then, look at the target customer base around your target address, and look at the actual customer flow around your target address (all of the above with reference to similar restaurants) to determine how easy or difficult it is for you to do this. Easy to do, difficult to withdraw.
Principles of Site Selection :
match your target consumer group;
corresponds to the consumption power/pattern of the target client;
corresponds to the appropriate consumer environment/business district;
convenient transportation;5. easy to take away.
Remedy : if the problem is only the restaurant surrounding customer base and the business category does not match, you can try to adjust the category and direction; if you have rashly chosen a very bad location – low customer flow for dine-in, poor parking for take away – then I suggest cut your loss in time.
Case 2 : Guests do not want to come to your restaurant This means that you have the opportunity to be seen by your target customers, but it doesn’t create enough appeal for them to come in or place an order.
Reason 1 : The frontage is not up to scratch
Advice : The frontage (including the store name) should be visible, legible, understandable, and easy to spread. The core categories of business should be displayed, and the level and style of decoration should match your target customers and the categories of business.
Reason 2 : Weak marketing campaigns
Advice : Use attractive enough activities to attract target customers. The first goal is to form consumption in the store, the second is to develop them into members, and the third is to form recharge.
Reason 3 : Neglect or over-reliance on third-party platforms
Advice : Some third-party platforms have their own set of ecological logic, and I do not want to teach you how to spend money on such platforms, but it does work in many cases. You can search for yourself if you need to, but try to figure out the logic and methods of their use, and do not trust third-party operations easily.
Reason 4 : Menu Advice: You can go to search on search engines such as Google. The menu is different from other catering knowledge. The effect it presents can not be faked. Your research is mostly right, but the key lies in how to implement them. So, I’m not going to talk about it individually – in fact, I did not study the menu in depth.
The above is an explanation of the reasons for the “Three-month Death” of the F&B industry and what measures should be taken when facing the consistently poor business. However, there is more behind the “Three-month death” of the F&B industry that we should explore. If merchants want to keep their restaurants stable and growing, please keep following the Three-month Death: How to Avoid A Poor Catering Business Opening? (PartⅡ)