Failing Restaurant Action Plan

Action Plan a for Failing Restaurant

Is your restaurant in trouble? Contact us by phone at (303) 757-3663 to see how we can help!

Today you’ve written three checks that won’t clear the bank until the deposit is credited tomorrow morning. The 941 tax payment is overdue and you have no idea how to come up with the cash to pay it. You’re now on a COD basis with every vendor, although 30-day terms are preferred. Last month’s rent was tough to pay – or maybe it’s not even been paid yet.  The next payroll has you scared – literally. The Tagamet® is gone and your ulcer is acting up. Your chef just quit, and the chore of finding new talent is daunting. These are all signs that a serious financial disaster is looming for you as the owner/operator of an independent restaurant. 

These problems are, unfortunately, commonplace today in our industry. Even though as a professional owner/operator you try to put on a “Happy face” to hide the pain, your view on almost every front is bleak.  In fact, it’s likely that you’ve never been more challenged personally and professionally. Your credit is tapped, a bank loan is out of the question, and you simply can’t ask anyone for more money. The advice of well-meaning but inexperienced friends and associates was disastrous. Financial mistakes have been made and when everything is considered, just shutting the doors and walking away looks pretty good. 

“This is the secret life of a failing restaurant owner,” I told our Consultants in a recent staff meeting. “It’s a tough, lonely, and frustrating place to be, and it pushes the limits of every person that’s ever been in that position. Even worse, in many cases, they are the victims of circumstances they simply could not control, and it just does not seem fair.”  Today there are thousands of people in the exact same scenario; you are not alone.  This information is being provided here because you, or perhaps someone you know, are going through these difficulties, and information about this troubling topic has been difficult to obtain.cause you, or perhaps someone you know, are going through these struggles, and information about this timely topic has been difficult to obtain.

“We have helped many others in your situation, and we’re here to help you,”. Declining cash flow, increasing food costs, and inability to make money are common issues and effect many more restaurant owners than would be expected. Last week we spoke with two different restaurant owners that had similar situations. In fact, one person had not shown a profit in over four years, and the other had not made any money in the last three and a half years.  It seems the allure of independence and control of the self-employed drives people to abuse themselves in ways they would never abuse others. 

Undoubtedly, there’s no easy way out. But NRC has a proven action plan that can help you navigate this storm and land you safely on the other side..

  1. Rewind the clock six to twelve months. What was life like back then compared to what it’s like now? What changed to cause the current dilemma? Try to isolate the top cause(s) and understand exactly what happened and why. This is not the time to place blame or point fingers - it rarely helps. 
  2. Take a high level view. At 35,000 feet, the weather is always beautiful. By getting on top of the storm, this high-level perspective will help you sort out the players, the problems, and the potential solutions. Evaluate your financial projections and create various scenarios for both yourself and your restaurant. Because of your intimate involvement and attachment to your restaurant, this step can rarely be done without professional help. Contact an expert. NRC has done this successfully for over fourteen years.  In fact, we guarantee our results.  If not us, an outside viewpoint can sometimes identify issues and solutions that you cannot see from inside the storm.
  3. Seek unconventional solutions. Admit to yourself that you’re in a forest and it’s difficult to see through the trees. Look for solutions that you’ve not considered before. Again, this is where the advice of an expert will be invaluable.
  4. Don't give up hope. You put yourself into the driver’s seat early in the game. You had high hopes for it then. Giving up and walking away serves no purpose. Be a realistic optimist; look at your glass as being half-full instead of half-empty. You were probably the lead cheerleader on day one, and that responsibility still belongs to you, even in these tough times. The counsel of seasoned professionals will help you find the positives and possibilities once again.
  5. It's the menu. It all starts here.  The menu is THE MOST IMPORTANT PIECE OF REAL ESTATE YOU OWN.  The menu drives almost all your costs; both food and labor.  Take a hard look at it.  Utilize reports from your POS.  Most of all, contact NRC to assist you and provide valuable insight.  We will help make it a profit generating tool.
  6. Social media is key. Both good and bad.  Buried deep in the noise of social media you can generally find the truth of what your guests think of your restaurant.  Look for trends.  Be responsive and make changes.  This can also become an effective marketing tool if used effectively.  Talk to us. 
  7. Make an investment. Where has free advice gotten you so far?  The best advice is from those who have devoted their careers to the industry, and it’s not free. If you want to retain the value in your business and even turn the business around, make an investment in your future. Turn to those who understand the turmoil you’re experiencing and can ensure that your particular set of circumstances are addressed. An expert can help you lay out a detailed plan that will incorporate a solution for your present issues and redirect your current path toward achieving your dreams of success. 
  8. Get help immediately. Remember that a closed business has no value whatsoever. While the doors are still open, you have options. Should you close the business, your options and your financial investment will disappear. Now is the time to be decisive, and swift action will be to your own benefit. 
  9. Keep everything in perspective. This is a business that’s in trouble, and it needs help. Remember that a bad decision now will be one that you’ll have to live with for many years. 
  10. Do not procrastinate. Things will not get better on their own. You must take things into your own hands and act with a clear sense of direction. You need solutions, and you need them now.
  11. This is business. Try to separate your personal life from your professional life. Do not look at this as a personal failure. Rather, take the view that this is a professional challenge. Engage professional assistance, act like a professional, and in short, as my good friend Marvin Adams told me many years ago, “Just make it happen!” - because if you don’t, nobody will.
  12. Act today. Read and re-read every one of the above steps. Act on them immediately.

Your goals started with a dream to create a gathering space for family, neighbors, friends, and strangers who would become friends. You envisioned a comfortable, well-appointed atmosphere with savory, nourishing dishes, and desserts and spirits for celebrations. Catch hold of that vision once again, and let us help you achieve your dreams and goals. Success in the restaurant industry is a highly elusive and rapidly moving target. You’re in the most competitive and difficult business in the world. With an expert to walk you through these steps, to help you keep a clear head and make wise decisions, you can watch your ship come in.

How Can We Help You with Your Business?

Contact us by phone at (303) 757-3663 or through email at for a free quote!

David Kincheloe is the President of Denver-based, National Restaurant Consultants®, the “Restaurant Startup and Troubleshooting Experts.” Their popular Operations Analysis™ and other consulting services are available worldwide. Learn more about the firm and get your free copy of the RESTAURANT SUCCESS SCALE at: or by calling  (303)757-3663. To contact Mr. Kincheloe directly, please e-mail him at: