The rate at which restaurant business in Nigeria fail is quite alarming and it has become something that even the restaurant business owners are left with no option than to close than the business.
However, from my past and subsequent experiences, I’ve witnessed so many restaurants being closed down on regular base. And each time I keep on wondering why such should happen.
Whenever such happens, I’m always left with a deep thought. Meanwhile, I’ve been able to analyse and source-out so many reasons why restaurants in Nigeria fail.
So on this very content, I’ll be highlighting some important reasons why restaurants in Nigeria fail.
Reasons Why Restaurants Fail In Nigeria
- Poor Management Scheme:
Poor management is the grass root of every business failure. When there is absence of good management in your restaurant business, it simply means that the business is at the peak of going bankrupted. Such as when employees don’t know their roles exactly or know what the restaurant mission.
The management of the restaurant can be categorized into planning, leading, organizing and leading. As someone with experience of managing restaurant in Nigeria, I can tell you that getting the management right is the backbone of the success.
- Poor Business Evaluation:
Another reasons why so many restaurant businesses fail in Nigeria because of the owner’s inability of discovering their mistakes and licking holes.
There is a reason of poor business planning and poor menu evaluation. People just put up menus that has no standard recipe. Sometimes, it taste good today, tomorrow it becomes more salty, the next day, it is pepper.
The variance scares customers away and those are the things that scares them away from other restaurants to your. You should fix it.
If you don’t do a regular evaluation, your business will certainly fail one day. This simply means checking and analysing your business regularly so as to correct any weak point or mistake.
- Bad Geographical Setting:
Bad geographical setting is one of the causes why so many restaurant businesses fail in Nigeria. In as much is this matters towards building a successful restaurant in Nigeria, it also contributes to the failure of businesses too.
When you set up your restaurant business in a bad location, poor neighborhood, wrong customer demographic, you’ll definitely end up a failure probably because you targeted the wrong market.
When you go to an urban area where your customers can be found in thousands to set up a fine dining restaurant, your business may be likely to survive past 2 years.
- Bad Hygiene:
If you’re running a restaurant under a bad hygienic closet, you’ll end up losing all your customers and that’s business failure. Restaurant business in Nigeria is a food service business, so it demands total clean hygienic environment from kitchen to storage area, from the waiters dressing to the tables where customers are seated. Cleanliness must be reflected in your restaurant if you want to move ahead. Don’t neglect his aspect if you really want your restaurant business not to fail.
Restaurant business takes time for it to be successful and sometimes it takes more time for the brand to be known. Success in this business demands total willingness to wait.
The owners become impatience and are unwilling to wait for the business to grow. This makes them to make more mistakes that only causes the failure.
- Steady Price Slashing:
Discounting is a major problem in restaurant business as many restaurant managers seems to believe that they ought to do so. But they keep eroding their profit margins until they just are not sustainable (no more business).
The costing of food is an essential factor is running a restaurant, because that is what determines your gross margin. While I can teach you how to cost your food menu that will make your business profitable, I expect you to learn this before starting your business.
Expert and excellent service goes a long way to appeasing customers querying a price rise. Now, this very situation could be curable if you can stop competing solely on price but on value and satisfaction where possible.
- Debt Dependent:
This is another reason why so many restaurants fail in Nigeria, over reliance on borrowed cash can actually make a restaurant business fail.
Do you have more debtors than creditors? Then your business is at the peak of falling. You should inject your sick business with a new life by collecting outstanding debts, renegotiating debts.
- Unfriendly Attitude:
Listen up, your business isn’t growing and won’t grow when you have a bad attitude. If you don’t know how to relate with your customers they won’t return.
Yeah! This is a major problem that you should avoid.
- Poor Planning
It is said and believed that he, who doesn’t plan, plans to fail. When you don’t plan, you’re indirectly setting up the bricks for business failure. I can help you write a bankable restaurant business plan in Nigeria.
Moreover, every business man should cultivate the habit of planning, this is a very vital factor towards business growth hacks.
- Haphazard Accounting:
Be reminded that if you don’t have your back office paperwork in order, it simply means that your venture is on a slippery slope and it will soon slip in.
Sadly, too many business owners have a head-in-the-sand approach to their business numbers, says Carl Taylor, founder of Business Builders Academy.
Listen, this can be corrected if you act fast to engage an accountant or do more DIY bean-counting.
Accounting is what institute the major processes in restaurant business. Getting a pos system that tracks stocks, foods, states prices and the number of menus served a day etc. You don’t need to be a math pro, all you just need to know is which numbers are important and what they mean.
Having read all these, you can actually take a quick dose from this content to re-fire your failing restaurant business in Nigeria. Is your business about to die? This content is also for you. Take cautions and grow that your business.
You can hire me for consultancy services or management services for your restaurant or pub or club business. Let grow the business.
Do check up on our online course page to find some short low price courses you can learn to boost your business.
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