So many reasons to NOT open a restaurant

I’ve written before about unskilled, unprepared or underfunded restaurant startups that end up in failure. And the turnover here at the beach just in the last year alone is proof positive that only the strong survive in this business of eating. An occasional owner will even blame “the economy,” ignoring or denying the obvious fact that other restaurants right next door or across the street continue to thrive. Though certainly disappointing and traumatic, the failure of one’s beloved concept is often a sad wake-up call from reality. 

This point was driven home for me last week during a visit to Fort Lauderdale, Fla. I like to stay in the East Las Olas area because it reminds me of our own Rehoboth Avenue, Baltimore Avenue and Wilmington Avenue all rolled into one east/west road teeming with restaurants, cafes, bakeries, carryouts, hotels; pretty much everything that we have in downtown Rehoboth, Lewes and Dewey Beach. 

So far, so good – until I ventured out onto Las Olas Boulevard to discover that more than a few of the little eateries I remembered from the same trip last year had been replaced with For Lease signs. But wait – Fort Lauderdale isn’t nearly as seasonal as our tiny Delaware Cape Region towns; shouldn’t it be easier to keep a restaurant running year-round in a city that sports two international airports, multiple shopping malls, high-rises as far as the eye can see, and a huge year-round population? For a rare moment, I was speechless (that moment didn’t last long...). 

I’ve written more than once that the hardest part of owning a restaurant in our Delaware resorts is the relatively short busy season and the inconveniently long and sometimes financially stressful off-season. Fort Lauderdale’s busiest time runs from around Thanksgiving to around Easter, but the relatively temperate weather keeps the differential between seasonal populations more to a minimum. 

So I decided to make myself useful and do a little research. I dropped in to a couple of commercial real estate offices along the Boulevard and casually asked about the surprising turnover in food service businesses. I introduced myself as having owned and operated restaurants in the past (true), and implied that I was researching restaurant spaces there in coastal Florida (sort of true). 

Lo and behold! Several of the friendlier agents confided to me that they are under constant pressure from their landlord clients to qualify potential tenants before they sign on the dotted line. In other words, to make sure that the restaurateur wannabes possess sufficient funds and working capital to not only construct and open the place, but also to keep it running during slow times. Though much of that information can be easily gleaned from financial statements, bank balances and references, the real challenge for these agents was trying to determine, as diplomatically as possible, if the potential lessee had any clue as to what he or she was getting him- or herself into. 

One of the agents told me that she tries to get together informally with the potential leaseholder to learn about his or her motivation and experience. Any fan of Robert Irvine’s “Restaurant Impossible” on Food Network can recite from memory the list of well-meaning yet fatally flawed motivations that often doom a food service business to failure before it even starts. “Mom is such a good cook! We have lots of dinner parties, and the family decided she should open a restaurant.” I can almost hear the mournful notes of “Taps” echoing in the background. Or, worse yet, “I financed and opened the place,and all I need are really good managers and employees to run it for me. I shouldn’t have to be there. I’ve got other things to do!” (Hear it? – “Taps” yet again.) 

The majority of successful restaurants have strong on-site ownership or generously vested management that provides not only quality training for employees, but ensures that systems are in place to incentivize those employees and let them know how important they are to the operation. If the owners bring savvy business experience and people skills to the table – both in the kitchen and in the dining room – the chances of success increase dramatically. 

We really have to look no further than some of our most successful restaurants here in Rehoboth Beach. The employees respect and support the ownership/management, and the owners/managers return that respect and support. And it’s all backed up with sound business practices and the means to consistently execute them. 

So maybe it’s not so much about on- and off-season business peaks and valleys. Maybe it’s more about making a total commitment to your concept, your business and your employees in order to keep hungry customers coming back for more.