Why Restaurant Fail

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Essay - Why Restaurant Failed

In 2003, American Express claimed that as much as 90% of the restaurants failed in their opening year. Reasons for failure go beyond economical perspective. Owners’ quality of life and family issues challenges restaurateurs’ ability to survive.

The report points out the linkage between an organizational life cycle and family life cycle. Family is a driving factor for a restaurateur, mentioned by majority of owners interviewed. Often, family opinions help drive business decisions. It is also important to recognize employees’ family needs as well. One instance can be seen during New Year’s Eve 1999, where most restaurants opened past midnight to take advantage of the millennium celebrations, one chose to close at 5.00pm so that his employees can spend quality time with their families. A successful restaurateur needs to strike equilibrium between organization needs and family needs.

Family sacrifice is a contributing factor in running a restaurant business. This factor is mentioned by both successful and failed owners in various reports. This also includes sacrifices made by family members for the owners. For example, one failed restaurateur sold the business because she wanted to spend more time with her children while they were growing up. The willingness to sacrifice can make or break a restaurant business.

Quality of life has a serious impact on the business. Majority of failed restaurateurs suffered from divorce, ill health or even due to retirement. Other changes in personal life and changes in stage of personal life cycle too contribute to the success of the business.

Certain personal traits are common among successful owners. An owner must be able to motivate himself and his employees, handle stress, willing to give attention to business, be passionate, enthusiastic about his work.

In conclusion, to be a successful restaurateur, one needs to devote as much effort in managing their business as well as their...
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