Why Do Most Food Businesses Fail in the First Year?On March 11, 2018 by NACE
Starting a food-related business requires careful and thorough planning. Without proper planning, you’ll most likely fail even during the first year of your operations. Conducting research about your chosen business and your target market is also necessary to avoid failure.
However, no matter how careful you are, you’ll still encounter plenty of challenges in your first year of operation. Here are some of the common reasons why some food-related businesses fail during the first year, and some tips on how to avoid them, so you’ll have a greater chance of succeeding in your chosen venture:
One of the reasons why food businesses fail, even if they’re still in their first year, is that they’ve chosen a poor location. Note that your business location can contribute a lot to your success. However, this doesn’t mean you should overspend when looking for a location. Good locations often carry a higher rental cost, causing some food business owners to be unable to cover it.
In this case, a wise tip is to pick a location based on your business’ format. If you’re renting, then ensure that the rental cost does not go over 10% of your total income. Also, consider important factors in choosing the location, including size, front location, accessibility, parking, and other building amenities.
In comparison to other businesses that require you to only manage a single group using a single skillset, a food-related business has plenty of moving parts that need a diverse group with various talents, personalities, and skillsets. That’s why you really have to be extra careful when choosing someone to manage your business.
Choose someone with experience and who is trustworthy enough in handling your staff. Also, avoid trusting someone completely with your business reputation and money. The best way to manage your team is to be more compassionate and understanding, while also offering insights and motivating them.
Poor customer service
Of course, if your customer service is poor, then you’ll have a lower chance of succeeding in the food industry. Customer service and good food are two of the most vital factors to keep your business open. With that in mind, don’t hesitate to ask for customer feedback, as that’s the only way to assess whether your customers are happy with your food and services.
Other possible reasons why most food businesses fail during the first year are lack of advertising, lack of understanding about food cost, overspending on unnecessary things before the actual opening day, inexperience, and lack of involvement on the part of the owner. Research about those areas in which most food business owners fail, so you can avoid the same mistakes. Also, take note that a lot of careful planning, strategizing, and hard work can help you attain the success you’re hoping for in the food industry.