My business is losing money – should I quit?
Dear Baybars,
My business is losing money! Should I quit?
I started my business about two years ago, which is a restaurant, and I am so disappointed. At the beginning I was very optimistic that everything would go well, but now my enthusiasm has gone and l have lost my motivation to work. My business is not succeeding, and I don’t know where I am going wrong. I am aware that it can take more than three years to make a business successful but I am still scared because I am losing money. What would be your advice to me? Should I keep doing it or stop before it is too late? I would really appreciate your answer.
Tina
Dear Tina,
Preparing a business plan before starting a business is crucial.
There are dozens of business plan templates that include hundreds of questions for you to answer. One of the classic questions is about the competitors in your market. I have no idea about the environment where you set up your restaurant. How many restaurants are there on the same street? Are you the only one who is not able to make money, or are there other restaurant owners who, like you, are not happy with their business? These are very important indexes of your entrepreneurial skill. If most of the restaurant owners are not happy, there is something wrong with the market, in which case it seems you need to stop your business at this address.
Preparing a business plan before starting a business is crucial.
If others are not having the same problem as you, I cannot necessarily say you are an unsuccessful entrepreneur. But I can question your way of doing business. I might guess, for example, that you may not have done much market research. Is that the case? It would have been enough just to go to lunch at the other restaurants on the street and to get an idea of the business — that could have given you an important clue.
Also, if others are doing well and you are the only one who is not happy with the revenue of the restaurant, then I have to look at your management and entrepreneurial skills. Particularly in the restaurant business, entrepreneurship becomes a success story only if it is followed through with good management skills. It could be that you are a good initiator but not good at following through in the management area. If this is true in your case, there are 3 important steps you have to take:
- You should immediately develop an innovation for your restaurant: an innovative product, an innovative way of servicing the customer, an innovative way of promoting your restaurant. Maybe you should convince a Dragon from the BBC’s Dragon’s Den to have dinner at your restaurant!
- You should import a restaurant manager with a strong, proven track record. A good restaurant manager means a good human resources manager. The main expectation from a restaurant manager is to set up a great team to run the service and the kitchen. Don’t forget that employees like working for another employee, not directly under the boss!
- Prepare a new marketing plan to promote your restaurant. Give importance to PR and use the power of social media.
Once you have completed all these steps, I am sure you will increase your revenue. But if you still are not able to generate a profit after increasing your revenue, then it is time to seriously consider another entrepreneurial decision: whether to stop, or to go ahead!
Baybar Altuntas
