Top 5 Operational Fails for Restaurants to Avoid

There are many fantastic small business success stories in Australia, but that doesn’t mean some of them didn’t learn the hard way. We’ve all been there, that’s why we’ve prepared a list of operational pitfalls you can avoid to make your small business restaurant a success.

1. Inventory Management

Challenge: Moving materials and stock out the door.
Managing your stock is critical, as every day that it isn't being used is costing you money in materials and waste. This includes overheads like storage and insurance, as well a shortfall in operating capital from overspending on stock that is not moving out the door.

Solution: Find the right suppliers.
Look for options where the suppliers provide storage or deliver direct and also look at 30 day accounts so not too much money is held up in stock purchasing in the short term.

Solution: Planning makes perfect.
Look for trends in what is being sold quickly or what is not moving off the shelves fast enough. One of the biggest mistakes made by small business owners having too much inventory is the lack of tracking what is popular and what isn't. If you know know what's working, you can plan your orders wisely and scale back (or even remove) the items that have low demand.

2. Managing Staff and Payroll

Challenge: Know how many to hire and how long to schedule.
When starting a business, many owners do not know where to start when it comes to staffing and scheduling. It can be overwhelming, especially since there is no hard formula on how to do it. Every business has different peak hours, months, and seasons that make it difficult to plan.

Solution: Do your research
In the early years, only employ staff that are absolutely critical and you know you can afford. Do your research and understand the industry you're in. If you've opened up a ice cream shop in the winter, you're likely to need half the staff you'll require in summer. If you've open a surf shop, it will be the opposite for your businesses.

Solution: Scheduling is your friend
You'll learn within the first 6 months of your business which shifts work the best for your business, especially since you'll most likely be working them yourself with the addition of supportive staff. Keep track of these timeframes, it'll help you schedule staff in the best way to reduce cost.

3. A Poor or Absent Business Plan

Challenge: Business plans are hard.
A solid business plan is not only critical for the short and long-term operations of your business, it is a vital tool for expansion. Additionally, financial institutions require these plans to approve finance services and loans.

Solution: Leverage government resources
The solution: The Australian Government provides plenty of useful tools to create your business plan and keep it in check.

4. Poor Social Media and Web Presence

Challenge: The world has gone digital
Australians spent a total of $1.95 billion per month on online shopping in 2017, but half of businesses across the country don't even have a website. And despite the fact that there are 15 million Aussies active on Facebook every month, just 47 percent of small businesses Australians spent a total of $1.95 billion per month on online shopping in 2017, but half of businesses across the country don't even have a website. And despite the fact that there are just 47 percent of small businesses every month, have dedicated Facebook pages.

In a digital world, the businesses without web and social media presence will be quickly left behind.

Solution: Go digital on a budget
Most of us cannot afford contracting professionals to build and populate our website. We recommend website builders that make it simple and easy to get a webiste such as Squarespace or Shopify (if you're selling things online.) With marketing on social media, if you aren't an expert there's plenty of literature to read online or you can partner with marketing solitions such as Liven to bring in more traffic.

5. A Focus on Customer Retention as much as Acquisition

Challenge: Customer retention is hard
Getting customers through your door (be it brick and mortar or digital) is one step towards growth in business, but keeping them coming back is the key to success. Loyalty and rewards programs provide incentives for customers to return. Small businesses all the way up to large corporations are including them as part of their operations in the modern era.

Solution: Find a loyalty program aggregator
It's been shown that individual loyalty programs have learned the hard way that users want more variety. If you make a loyalty app for your business, it's unlikely customers will use it as no one likes to marry themselves to one food option. Now more and more small businesses are seeking aggregated loyalty programs where they can tap into a strong active user base of a network. Liven helps provide this type of solution for restaurants in Australia.