Donald Burns, who opened 57 restaurants and closed five, walks through a seven-point checklist: review your P&L and cash flow, assess competition and market conditions, evaluate your brand strength, cut costs where possible, check team morale, consider your own mental health and goals, and explore alternatives like selling or finding an investor before you decide to close.
Should I stay or should I close? If you're a restaurant owner, that question may have crossed your mind a few times. I know it crossed my mind when I owned restaurants. Closing your restaurant is a difficult choice to make and it's important to consider various factors before making that final decision. Here are seven key points to help you make a more informed decision about whether you should stay open or if you should close your restaurant. Hey TRC Nation Donald Burns, the Restaurant Coach, author of youf Restaurant Sucks and in my career I've opened 57 restaurants and I've actually had to close five. It's so sucking to have a closer restaurant. In this video, I want you to have the right questions. You need to ask yourself to have an honest conversation about whether you need to keep fighting the good fights or close this concept to fight another day. Number one Financial Analysis Evaluate your restaurant's financial health by reviewing your profit and loss statement, cash flow and other financial data. Now if you don't have those tools, you're already in trouble. Consider whether your current financial situation is due to temporary challenges or more long term systemic issues. If it's the former, you may want to explore ways to improve your cash flow and profitability before considering closing. Number two Market Conditions. Hey, markets change and sometimes very, very rapidly. Remember, Covid every analyze market conditions and competition in your area. If the market's saturated or if there are significant economic challenges facing your area, closing your restaurant may be the best decision for your long term financial health. Number three Brand strength. You have to assess your restaurant's reputation and your brand strength overall. If you have a strong brand and a loyal guest base, you may be able to weather a storm and bounce back. Now. On the other hand, your brand has been damaged by bad reviews or you have very little recognition in the market, which we call market penetration, it may be very difficult to recover. Number four Operational efficiency. Examine your operation to determine whether there are any areas that you can reduce cost, streamline processes or improve efficiency. Sometimes a few simple little changes can make a real big difference on the bottom line. Number five Team morale and performance. You really got to gauge them around performance of your team. A motivated, high performing team can be critical to turning things around. If your team's struggling, consider investing in training, developing and support to help them improve. Remember, restaurants become better when the people in them become better people. Number six Personal factors. Now you really have to reflect on your personal goals, aspiration and your mental health. Running a restaurant is extremely demanding and it's important to consider the toll it's going to be taking on you and your personal life. If you find that the stress is too much or that your passion for the business has waned or vanished, it may be time to move on. Number seven Explore Alternatives before making decision to close, consider other options, such as maybe selling the restaurant, bringing in a partner or an investor, or pivoting the concept to suit the market better. This is what we call a rebrand, and sometimes it's the best thing you can do. During my consulting days, the majority of my consulting gigs were for rebranding. And just so you know, rebrand is going to cost you some money to rebrand, and it's going to take a lot more time than you think to reestablish your new brand in the market. Closing your restaurant is a major decision, and it's essential to weigh all the factors carefully. Now, if, after careful consideration, you determine that closing is the best course of action, you need to create a detailed exit plan to minimize financial and emotional hardship for you, your guest, and your team. Remember, even if closing your restaurant is the right choice now doesn't mean it's the end of your entrepreneurial journey. Learn from this experience and apply those lessons to future endeavors. Don't forget to like, comment and subscribe for more valuable tips and insights on how you can make more while working less in your restaurant.
If your restaurant only works because you work 80 hours a week, it doesn't work.
