Lackluster Performance? Save Your Restaurant With These Restaurant Turnaround Strategies

Let’s not beat around the bush—running a restaurant is very hard. It’s why only a few businesses last long enough to become local institutions or large, multi-location chains. It’s estimated that 80% of restaurants close within their first five years of operations. And even a promising launch doesn’t guarantee significant staying power. 

Given these facts, business owners need to be equipped with restaurant turnaround strategies if they want to weather the ups and downs of the industry and achieve long-term success.

Can You Save a Failing Restaurant?

As a restaurant owner, you must remain alert for signs of a failing restaurant. These could be obvious indicators, like failing to pay employees or vendors on time, or more subtle, like having empty tables on high-traffic days such as weekends and holidays.

Regardless of what is behind the decline, letting the situation continue will lead to negative financial performance, plummeting your brand’s reputation and eventually forcing your establishment to close.

That’s where restaurant turnaround strategies come in. While the actual results of your turnaround strategy might take months to bear fruit, it’s important to take action straightaway. Failing restaurants need outside assistance. Restaurant consulting firms like TRG can provide you with the analysis, data reporting, and restaurant turnaround strategies you need to reverse a downward trend.

Five Key Areas of Focus for Restaurant Turnaround Strategies

The goal of every restaurant turnaround is to identify and eliminate the inefficiencies in its business practices while introducing processes that revive its profitability. To achieve this goal, effective restaurant turnaround strategies must consider all of its key aspects.

1. Finances

At the end of the day, every restaurant is a business and a business needs to protect its bottom line. If your restaurant is struggling, it’s time to consider cost-efficiency methods. Adjusting the restaurant’s inventory management and pricing strategy can help eliminate unnecessary expenses. 

Track your business expenses closely and monitor your cash flow to protect your restaurant’s finances.

2. Operations

Simplifying operations to achieve efficiency is an important part of restaurant turnaround strategies. For multi-location chains, it could involve closing down underperforming outlets. Other tactics include extending business hours to complete more table turnarounds or offering special promotions to attract more customers.

3. Marketing

Once a restaurant turnaround is underway, it’s important to spread the word. Important changes spark customer curiosity and drive traffic to the location. 

Additionally, you need to take an omnichannel approach to marketing. Use a mix of social media, traditional media, and outdoor advertising to promote the restaurant and raise brand awareness.

4. Customer Experience

As a part of the service industry, restaurants need to cater to their customers’ preferences and demands. Scanning customer reviews to identify what your demographic likes and dislikes about the restaurant can help you refine the dining experience. It’s important to study all the customer data available to thoroughly understand their expectations.

5. Staff

When attempting a restaurant turnaround, staff are key stakeholders. Long-term employees are familiar with the way the restaurant operates. This information is critical for creating positive transformation. 

Restaurant turnaround is also an opportunity to readjust your staffing structure by either letting go of unproductive employees or adding members to your team.

Three Main Stages of Restaurant Turnaround Strategies

The longer a restaurant stays in business, the higher the chances it will need restaurant turnaround strategies. Evolving customer preferences and market trends mean that restaurants need to update their tactics from time to time. A restaurant turnaround takes place over three phases, namely:

• Assessment: This stage involves analyzing the restaurant’s current state as well as looking for strengths that can be augmented and weaknesses that must be addressed.
• Planning: The next stage involves crafting measures to achieve the desired results, such as setting key performance indicators (KPIs) to track performance according to your revised standards.
• Execution: The final phase, which is the longest, involves implementing all the practices outlined during the planning stage. It might take months before the results are clear, but it’s important to maintain consistency during the execution phase.

To achieve the best possible results for your restaurant turnaround, consider working with a consulting firm. An external party can take an impartial view of your business and present you with a balanced perspective of what’s needed for successful restaurant turnaround strategies.