Restaurants are an important part of travel. In posting a culinary question last week, I realized that many fodorites have a great knowledge of the restaurant industry. What makes a restaurant fail? In a more positive take, what makes a restaurant succeed?

I think if there were a sure-fire formula, everyone would follow it and have a success. First, I think luck has a lot to do with it.
The rest is a varying combination of location, pricing, food quality, ambiance,publicity/word of mouth, and service. I can think of a lot of places that have a lot more of one of those than another, sometimes it seems they have none at all of some of those factors, and yet they succeed for many years.

Hi Shane, while I have never been in the restaurant industry I do know something about restaurants as I was an Insurance Broker for years and wrote insurance policies for lots of restaurants.

One thing that I know that can make a difference between a restaurant succeeding of failing is whether or not the owners have a good business plan. I have know lots of good chefs that were wonderful cooks but they did not have any idea how to run a business, which of course a restaurant is. And in our city we just recently have a restaurant go out of business. There were 14 partners and not one of them had any experience with the restaurant industry although evidently they have all been successful with their other businesses.

Another constant theme is whether or not a restaurant is consistant with the food they serve and the hours and days of operation. Also knowing how to hire the proper employees is a factor as proper service can sure make or break a restaurant IMO.

The mortality rate for restaurants is very high yet some restaurants are in business for decades as they have taken the time to educate themselves regarding being a business owner.

Having said that I have known some restaurants that have stayed in business, and how they have accomplished this is beyond me.

Having married a successful restauranteur of 30 years who is now a successful restaurant consultant, the surefire recipe of success is simple but hard for some to execute.

You have to have excellent food, excellent customer service, excellent management skills, and money.

When any one of those four things fails, your restaurant will go out of business.

What makes a restaurant fail?

Being Undercapitalized - The #1 reason businesses fail in the first year. You might have great food and service and your restaurant has a sunset view, but if you can't pay your vendors...you're out.

Overall bad food

Inconsistency - some days it will be great, go back and it's terrible

Location, location, location

poor service -even if the food is good but you have snooty,slow or unfriendly service

If the restaurant is dirty - yuck

insufficient parking

no liquor licence

I guess what makes it succeed would be the opposite of the above.

Annebel, believe it or not, location often has little to do with the success or failure of a restaurant.

I'm not sure what you mean when you wrote that "...I realized that many fodorites have a great knowledge of the restaurant industry."

If your only basis for such are postings on recommendations, or knowledge about "where-to-go" restaurants (and I suspect that this is your prime and only basis), then I disagree with your premise about asking such question on a topic that most here would like to be experts on , but, sadly are far from being one. This is a good travel board, but the restaurants that are mostly recommended here represent the minority within the restaurant industry as establishments that are recommended here appeal (or cater) mostly to tourists.

Dopn't get me wrong, as I have seen around here, you are free to ask anything on this board, and I mean ANYTHING. However, if your intent is to get qualified answers, then you are better off asking such question in boards that truly specialize (and truly know what they talk about).

ez, I think my family's livelyhood being supported by the restaurant business makes me an expert.

Also, any restaurant the caters strictly to tourism would go out of business.

Tourist cities don't 'hide' the good restaurants from the tourists, they cater to locals and tourists alike.

Go,
If you read my post, I didn't write that ALL posters here are not qualified to respond.

However, I strongly disagree with your contentions:

>>>"Also, any restaurant the caters strictly to tourism would go out of business.

Tourist cities don't 'hide' the good restaurants from the tourists, they cater to locals and tourists alike."<<<

I have frequented highly-regarded establishments (based on people I know and whose opinions I trust) and more than enough bad joints to dispute your comments above, without involvimng my close friends business associates in the food and wine industry. But I think I'll just fold my cards and leave the discussion to the others here - qualified or otherwise.

I love this question! I'm not in the business quite as long as GoTravel's Guy, (my DH and I own a mom-and-pop place for 22 successful years) and I agree with everything she wrote, especially about location. Here's my take:

Be Consistent. Also known as: Don't serve anything you wouldn't eat yourself - and it better look and taste the same as it did yesterday and the day before.

Spend Less Than You Take In. This one is probably the hardest to follow - especially with all that lovely cash in the drawer at the end of a great day. I watched my neighbor open a restaurant, overspending all along the way (never even considered purchasing used equipment). The restaurant was a wild critical success. But within 8 months they closed their doors - because all the money got spent without paying the bills. It is very hard to remember, that of those three thousand dollars in your hand, you can only have about three hundred for yourself. And if yourself is FOURTEEN partners, as in LoveItaly's example, fuhgeddaboutit! Fourteen just doesn't go into 300!

Quality counts. Don't skimp.

Treat everyone (including your staff) with Respect, and be willing to do ANYTHING you ask someone else to do. Including clean out the dumpster (to this day my husband will not ask an employee to clean the dumpster - he does it himself!)

As for luck, my husband's favorite saying is, (he gets told how lucky he is all the time) "The harder I work the luckier I get."

Maybe location does not matter in some places but where I live, location is important, but not everything.

I have some favorite restaurants that I will not go to if I am not in the mood to sit in traffic for 45 minutes or more or get to or to drive dark and winding roads to get to a restaurant that is so out of the way I need to use my car's navigation to get to. some restaurants although wonderful are just too out of the way to get to from any area...I think location may hurt a restaurant to a degree. There is a restaurant I know of that is tucked away in the middle of a residential waterfront neighborhood. It is not far from me, but it took me a couple of times to actually find it. I recently had a ladies luncheon there, and everyone commented how they have heard about it but they never knew where it was, so they never went.

Erudite information above, but to me the experience and the facts just don't explain all the successes: the 'teflon' places that most people agree have lousy food or bad service that survive, even thrive, anyway. I guess they win on convenience or low prices or, some unmeasurable factor.

Some places, like Tavern On The Green thrive because of the wow factor and because they are extremely well run. I would also guess that a large percentage of their business is F&B catering (wedding receptions, parties, bar mizvas, bat mitzvahs etc) which has higher returns that just dining.

The bottom line is that you have to treat your customers well and run a smooth business.

Ones with lousy food will go out of business given enough time.

Good business sense and a good business plan are needed. But you must have:

Quality. Good quality food, using ingredients that are fresh, never questionable. Keep on top of produce levels, too much you will have spoiled product, not enough and you cannot deliver what the customer requests.

SERVICE. This can make or break you for sure because a bad reputation will kill you. Customers will more readily speak of their bad experiences to their friends and co-workers than any good experiences. I am amazed at the lack of courtesy when I go shopping or out to eat. I find as a manager that it is very difficult to hire, attract and maintain GENUINELY, fiendly, well mannered employees. Especially the younger kids. They must be motivated constantly and you must lead by example.

Cleanliness. Keep a clean, sanitized kitchen. Train employees on food safety and make sure it gets done. Get as many people food safety certified as you are able. If people understand the hazards and reprocussions of a dirty kitchen they will be more likely to keep a clean one. Never let cleanliness slip in the customer area.

Value. People must percive that they have gotten a good value for the money that they have spent.

Also pay attention to your market for advertising, and hit that target.

Cleanliness in the kitchen is of course a laudable goal, but it is an unseen for most customers. The New York City Dept of Health publishes lists of restaurants with violations; in the past some very famous and/or popular places have had them, and the violations weren't only technicalities, but items like 'rodent droppings.'

Go-Travel makes a good point, there is more than one way for a restaurant to make money. Catering and a bar scene can hugely contribute to profits.

IMHO - what makes most restaruants fail is undercapitalization and an unrealistic business plan. (If you don;t understand exactly what either of those is - and how to put the latter together) you have no business trying to open a restaurant.

(It is generally not the cooking, the service - although it may rarely be the location - it's usually that the owners think a resaurant just need good cooking - rather than a solid and realistic business plan.)

(The failure of that idiot's restaurant on the TV series is the prime example of this - he did not have a clue what he was doing - the worst management I've ever seen - no planning at all.)

Here in Naples, Florida, restaurants seem to come and go at an alarming rate. My favorite situation is when a place opens after months and months of interior work, and then closes after only a month or two of being open. I agree that probably means there were way under capitalized. How in the world could they expect to start making money as soon as they open? Or maybe they didn't figure out how much their overhead would be from the start, or how much they were spending on getting open to begin with.

What makes them fail? Bad service is number one in my opinion, bad or mediocre food is actually number 2.

Patrick, there is a little Italian restaurant by my house that I eat at at least once a week.

The service is attrocious but the food is so good I can't stay away. They once charged my credit card THREE times for the same meal.

I dream about their marinated tomatoes in olive oil and fresh basil.

Just like the soup-Nazi phenomena here in NYC. Or, for that matter, most Chinese places in major Chinatown areas such as in NY, SF, LA, Toronto and Vancouver.

Service border from bad to attrocious (or oppressively dictatorial, as in the soup place), but these places rake it in and stays forever.

It has to be the food.

This thread doesn't explain how places like Olive Garden stay in business. The food isn't good, the service isn't good, and it's not necessarily cheap compared to much better Italian restaurants.