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Top 5 Reasons Bars & Restaurants Fail



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what's up y'all Dave are at the real bar

bein from bar Patrol net I'm gonna talk

to you today about the five biggest

reasons I see that bars fail I also have

a video called the number one reason

bars fail you want to go check that out

I see it on a daily basis in my business

I'm super passionate about that I think

I touch on number three in this video

but I want to expand a little bit for

more things you to focus on star to be

negative and call it the reasons bars

fail but 85% of bars are failing you can

turn around to use these five things to

make your bar succeed you want to make

sure to listen to number five because

without number five you can't do the

rest of them it won't work so go check

it out subscribe to my youtube channel

for more cool stuff let's head to the

computer we're gonna go over the five

biggest reasons that bars fail here we

go okay so here we go we're going to

talk about the five biggest reasons that

bars and restaurants fail outside of

financial backing you know this doesn't

include financial backing this is

actually the number one reason that bars

or other businesses fail but we're going

bar and restaurant specific but if you

don't have financial backing when you

first open a restaurant and you have

some rough times in the beginning and

you're just expecting the profits to

come your business is going to fold so

I'm not including that here that is

actually the number one reason but we're

going to go specific to the bar

restaurant industry so the number one

reason kind of kind of cliche but

location location location it's it's

cliche and real estate it's the same

thing for the bar restaurant industry

this picture is a exaggeration obviously

but if you're not in a good location

you're in trouble and you can't just

have a good concept and you can't just

have a busy location alright and what I

mean by that is a good concept in a bad

location that doesn't bring in traffic

is completely pointless you can have the

greatest concept in the world but if

it's located somewhere where no one goes

what's the point and then a busy

location might have rent that's too high

and it's skyrocketing your occupancy

percentage so that's something you need

to look into financially and for more an

occupancy percentage and other cost

percentage standards you can watch my

video it's called what should your bar

and restaurant cost percentages be

and it goes over all of the industry

standards and just so you know your

occupancy I should not exceed ten

percent of your total sales that's kind

of a general standard so that's number

one location number two there's no

systems in place and anyone who knows me

knows I'm huge on putting systems in

place there's a lot of owners who just

work for hours and hours and have no

systems and if you haven't read the

e-myth by Michael Gerber this is the guy

that kind of pioneered this whole idea

of putting systems in place he did

pioneer systems but he kind of analyzed

it and wrote a book on it and it really

puts a clear picture and gives you a

vision of what he's talking about and he

uses McDonald's as a big model and the

philosophy states that the business is

not dependent on the owner meaning the

owner doesn't have to be there 60 or 70

hours just could be the GM - this could

be a manager's role and they feel like

they have to do everything and manage

every single person all the time the

philosophy here is the owner manages the

system not the employees so you put

systems in place they just run on their

own and McDonald's it's the same thing a

lot of these other franchises you put in

systems and then you just hire you know

a decent manager employees you don't

need a rock star and pay him a ton of

money the system runs itself you just

plug them in and the systems are set up

so precise that anyone can do it all

right without systems in place employees

and managers will do whatever they want

which is usually selfishly motivating

this you might see this in your place

you might be like yeah when this does

what they want there's no systems their

actions and behaviors left unmonitored

will eventually destroy the business you

can't just let people do whatever they

want or things are going to fall apart

systems allow you to focus on the

business instead of Spain all of your

time doing menial tasks and putting out

fire fires so some examples of

businesses some systems are you know

opening and closing side works that

that's you know kind of a common one but

it's a system right you don't have to go

every night and ask you know employees

that they did their side work because

they have sheets they fill it out they

check it they get it signed by a manager

and they just do it automatically

because the systems in place daily

booking and accounting you know regular

inventory counts so you can track what's

going on and then customer service rules

not just go out there and give some

great service you can't just tell them

that you have to

you have to give them rules you know

greet guests within 60 seconds when they

walk in the door greet them at the table

make sure there's refills follow up

after the food arrives all these rules

that they need to follow so it's a

system in place so number two is system

and speaking of customer service number

three is poor customer service is the

number three reason that bars and

restaurants fail and everyone hears

about customer service oh yeah yeah it's

important but you need to stay on top of

this or you are done it's cliche but

it's for a reason

you know don't stop marketing but shift

your ratio of time you spent on

marketing and promoting your business to

spending more time focusing on giving

guests who are already in your bar and

restaurant a premium experience I'll

never forget that's the most important

thing you do if your attention is

elsewhere and you're not focusing on

them they're not coming back so the

truth is if you spend a hundred percent

of your time ensuring that your guests

all had an absolutely fantastic

experience every time they came in you'd

be so busy that you would even have time

to focus on marketing and you wouldn't

even need it it costs forty to seventy

dollars to acquire a new customer and in

our industry and repeated business and

word-of-mouth marketing cost you almost

nothing it is super valuable that's what

you should be spending most of your time

this means that your staff must be

well-trained by following the systems

you put into place to ensure maximum

experience for every single guest every

single time this is so important all

right Cornell University to study I have

this generally correct I don't have this

little word for word but this is the

general oversight of it forty percent of

the guests overall rating the guests

that they brought in they rounded like a

thousand people and study them and had

them do a survey after their overall

rating of the service that receive was

based on three things how quickly they

were greeted whether their drinks were

refilled and how quickly they received

the bill all right this is like two

minutes of their 90 minute experience

accounted for three percent of their

overall rating they can't stand it you

know the time is a big thing they come

there to be treated like kings they've

been working all day they want an

experience and when you ignore them at

the door or you're texting when their

ice tea's not filled it pisses them off

and then they're gonna go on Yelp and we

know how that goes people love to to

[ __ ] and rant and rave on Yelp so

you know attention to detail making sure

that taken care of is extremely

important the food and drinks are

important but they are secondary when it

comes to gaining repeat business how you

make the person feel and the experience

you provide is more important in the

product you're serving and that doesn't

just mean your host and your servers and

your bartenders like you sit in the

office and do nothing you the manager or

owner need to get out there and speak

with every table that comes in alright

you're the star of the show and they

feel very important you walk up and say

hey I'm the manager how you doing how is

everything or if you say I'm the other

that's great he took time to come over

because it doesn't happen that often so

it's rare and when you when you get it

they feel important and I call this a

lot of big personality I wrote about

this in my book and it is a powerful law

and the customer customer service

industry you walking through and being

the personality in the face of the

business very important all rights going

to number four there's no measuring

monitoring or following up and this

these systems are extremely important

that you measure the numbers and the

data at what's going on so you can see

what's going on your business these

numbers tell a story and you know the

85% of businesses I come across and bars

and restaurants are not doing this if

you don't measure it you can't monitor

it and if you can't monitor it you can't

tell where things are going wrong and if

you can't tell what things are going

wrong you can't improve it and if you

can't improve it what the hell are you

doing in this business anyway you should

just go work at Walmart or something

like that

the famous management expert Edward

Deming helped improve and save Ford

Motor Company he says and God We Trust

all others must bring data and this is

so true if you're gonna be successful in

business monitoring the inventory the

quality of food and the drinks going out

and the quality of service each guest is

receiving is the only way to survive and

thrive without putting measuring and

monitoring systems in place you might as

well close your doors right now because

the only way to ensure your imminent

failure is to blindly hope that

everything behind the curtain is okay

you need these numbers you need

inventory you need to track all of your

data and then analyze it to see what's

going on so you can improve and grow

it's the only way to make it

and then the last one I move this up

here this one's so important poor

execution and this is in general life

people have a horrible time executing

their plans and goals and it really

comes across in the restaurant industry

I'll go do some consulting for bars and

restaurants and I'll tell them exactly

what they need to do and they end up

just not executing any of the plan I

give them the plan they just don't do it

you see them Bar rescue all the time Jon

Taffer comes in says you need to do this

this this changed the name to this data

as soon as he leaves it'll be a little

message a day on the show say and they

change back and they failed so no one's

executing the plan that that's coming

back so why don't people execute well

because execution requires people to

change their habits and their behavior

and why do you think so many New Year's

resolutions are broken inside the first

three weeks this is so common right

everyone they have an idea of what they

want they create a plan to achieve their

goals which requires them to change

their current behavior and create new

habits they were not practicing before

and over and over again they break the

rules this takes more effort than the

most common people playing for them

that's that's the things they know it's

going to take some effort but they don't

plan for how much effort and it's mainly

because you know your bar and restaurant

is teeming with so many tasks and

priorities that to execute your plan

takes a pinpoint focus and systems and

an effort to change that most people

don't possess which is why implementing

systems written down not just up in your

head is so important to the success your

business I keep repeating systems but if

you're going to execute you need the

systems written down you know the key to

everyone executing their assigned tasks

managers and employees alike is creating

the systems and then it called a culture

of accountability where the team is

accountable to each other and not just

the owner and manager they need to be a

team employees will work hard to avoid

getting in trouble and gain approval

from the manager but they will work

twice as hard to avoid disappointing

their team so it's so important you get

it wrong on board you get ones feedback

you make them feel important that you're

all there for the same reason you're not

just barking down orders at them you

want to make it a team effort and

everyone will work harder for each other

so there's an overview of the five

biggest reasons that bar and restaurants

fail from my perspective and all the

bars and restaurants I've worked with

take care of those first five and

priority and then you can take care of

the smaller issues after I am Dave

already the real bar man and visit bar

control net if you want to have more

cool articles check out the inventory

system I will see you next time

I'm out