6 Restaurant Startup Mistakes to Avoid

It isn’t a secret that the restaurant industry has a notoriously high rate of failure. In fact, a commonly cited study found that as many as 60 percent of new restaurants fail within their first year. This statistic is often enough to dash the hopes of many who dream of opening a restaurant, but it’s important to understand the reason behind these failures. By learning from the mistakes of others, you can avoid the common pitfalls that bring down new restaurants and give your own restaurant a better chance at achieving success.


Mistake #1:  Thinking That Amazing Food Is Enough to Bring in Customers

If good food were the only thing that was required to make a restaurant successful, there would be thousands of restaurants still in business today. However, there is a lot more that goes into a thriving restaurant. This mistake is usually made by entrepreneurs who fail to realize that dining isn’t just about filling your customer’s stomachs with tasty food, but about providing your guests with an entire dining experience. The atmosphere, the cleanliness of your restaurant, and, above all, the service that your staff provides all contribute to offering a superior dining experience at your restaurant that will make guests come back for more.


Mistake #2:  Failing to Place Importance on Location

In real estate, the common phrase is “location, location, location,” and this saying is also applicable to where you establish your brick-and-mortar restaurant. A building that is up for rent could be exactly what you had in mind for your restaurant, but it won’t do you much good if the area is already littered with burger joints. Likewise, a restaurant that caters mainly to the younger crowd would have a difficult time if they set up their business in a location that has an older population.  

Ignoring just how much location matters for the success of a restaurant has brought down many establishments, and it’s important that new restaurant owners avoid this same fate by doing their research.


Mistake #3:  Bad Marketing Strategies (or None at All)

Your restaurant can serve mouthwatering food and provide a great dining experience, but word-of-mouth advertising can only get your restaurant so far. Entrepreneurs should have a marketing strategy well before the launch of their restaurant so that its opening day is a success.

A bad marketing strategy could potentially be even worse than no marketing strategy at all.  Nearly every new business works with a limited budget, making it particularly important that your money is well spent in the beginning. Funneling money into useless advertisements that fail to engage your target audience is a huge waste of money. New restaurant owners should think carefully about the best ways to develop their brand, build their customer base, and engage their audience so that they can retain loyal, lifelong customers.


Mistake #4:  Not Investing in Your Restaurant Equipment

Getting some items used or on the cheap side is practical, but in some instances, it is better to invest in equipment that won’t fail on you in the worst of times. Few customers will sympathize over the fact that their food is taking an hour due to failed equipment. Entrepreneurs will need to recognize when to invest in quality restaurant supplies and when to purchase items used in order to avoid a catastrophe in the kitchen.


Mistake #5:  Not Securing Adequate Funding

It can be difficult for some small restaurant owners to secure the funds they need to open their eatery. Unfortunately, this is partly due to the fact that new restaurants have a high risk of failure, and banks are less likely to back restaurants because of this. Thus, some restaurant owners have relied on their own personal savings to get their business off the ground or add business partners to gain additional capital.  

No matter how you fund your restaurant, it is important that you have planned out your finances carefully. Running out of funds at the wrong time can bring down a restaurant for good, making it critical for restaurant owners to have a sound business plan in place to successfully grow their business.


Mistake #6:  Underestimating the Amount of Work

Opening a restaurant is hard work, and many entrepreneurs underestimate how much of their time running a successful restaurant actually takes—especially in the beginning. Some restaurant owners simply close their doors for good because they grew exhausted trying to manage it.  There is a lot of sacrifice that goes into opening and running a restaurant, and entrepreneurs should be prepared to work weekends, get called into work at the most inconvenient times, and be patient when it comes to seeing a return-on-investment.

Despite this, many find that this hard effort is all worth it to see their dream restaurant become a success. Those who are willing to put all their time and effort into such an endeavor will find the experience rewarding rather than just plain grueling.

Knowledge Is Key for Restaurant Owners

New restaurant owners will most certainly make mistakes along the way and learn valuable lessons, but there are many lessons that can be learned without the dire consequences. While the statistics regarding restaurant startups may be disheartening, they can serve as a reminder for entrepreneurs to be cautious when it comes to opening their own restaurant. By learning from the past mistakes, new restaurant owners will be able to sidestep the common pitfalls of former startups and give their own a better chance at success.


Author Bio: Rich Lansdale has been in the restaurant industry for two decades helping run his family's restaurants in Washington, D.C. He writes about his experiences in an effort to help those just starting out and those struggling to make it. One of his favorite things to do is host a dinner party for friends and family. Read more from Rich at

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