What is this 90 Percent Myth all About?
This is exactly what author Roger Fields discusses in his 2nd edition of Restaurant Success by the Numbers: A Money-Guy's Guide to Opening the Next New Hot Spot. You probably heard of this saying as well, "90 percent of all restaurants fail in the first year".
(image courtesy of h5B9 posted to Flikr.com on May 25, 2010. This file is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.)
Fields states there is no concrete evidence to prove the much-cited failure rate for restaurant businesses anywhere. He goes on to prove this by citing a number of studies and literature reviews conducted in the States to prove otherwise. "In the United States, restaurants and food services together make up the nation's largest retail sector (Fields, 2014). According to the National Restaurant Association, total restaurant-and-food services sales are projected to reach $683.4 billion at more than 990,000 locations in 2014.
So what about the food industry in Canada you ask? According to RestaurantsCanada.org, Canada's restaurant industry generates $68 billion in annual sales, which equals 4% of Canada's economic activity (2014). In Ontario, $26 Billion sales was generated by the restaurant industry which is 3.8% of Ontario's Gross Domestic Product. With more than 88,000 locations, the restaurant industry contributes to urban and rural communities across Canada. Furthermore, based on Ontario's Restaurant Industry report updated March 2014, there had been 7.5 Million visits to restaurants every day in Ontario. Factors such as rising supermarket prices, households earning two incomes, and people having less time to prepare meals at home, all contribute to the demand for dining for convenience.
Fields explains that generally, restaurants are less risky and better investments for small business entrepreneurs than other types of consumer goods retailers and even high-tech start-ups. For those that have dreams of owning a restaurant or those that simply just want to know the elements of running a successful restaurant, his 2nd edition is worth a read. He discusses your target market, location, pricing, kitchen designs, staffing, and much more.
Check out other great titles that provide great tips to running a successful restaurant:
Comments