EMERGINGEmerging ConceptsRestaurant Industry Insights

How Restaurants Make It Through the First Year

If you’ve done your research, you know that the restaurant industry is not for the faint of heart. According to the National Restaurant Association, about 1-in-3 fail the first year. Compared to small businesses in the U.S. that experience 1-in-5 closures, you’ve got about a 10% greater chance of going belly up in our illustrious industry. Of course, many on the front lines wouldn’t trade it for anything. 

So, what does it take to succeed? While every operator and owner will share a different story, a common thread runs through every successful restaurant. Stamina and perseverance? Check. Determination and discipline? Check. Learn from their mistakes? Check. Financial geniuses? Sometimes.

As Susan Jeffers famously stated, “Feel the fear and do it anyway.” Just make sure you’re heading into this business with your eyes wide open. Even Bobby Flay, who negotiated a three-year, $100 million contract with Food Network in 2022, closed several restaurants throughout his incredible career. Likewise, Gordon Ramsay, a world-renowned chef and TV personality, has opened 60 restaurants, and 23 are no longer with us.

The antonyms for “faint-of-heart” are braveheart, champion, courageous person, and warrior, which pretty much sums up many successful restaurant owners. Let’s explore how they made it through that all-important first year. 

  • Passion

As Fabienne Fredrickson said, “The things you are passionate about are not random; they are your calling.” Passion is the cornerstone of success in most enterprises. It’s the feeling that keeps you working through the long hours and affects every other all-important trait. 

  • Consistency

You’ve undoubtedly experienced this common pitfall in new restaurants. You enjoy your first meal at a newly opened restaurant and think, this is it, my new Friday go-to. Then, you return and find the first impression proved horribly wrong. How do restaurants go from great to mediocre in a few weeks?

Their chef may have left, or their suppliers failed them, but, as we mentioned, perseverance is the hallmark of success. Knowing you’ll rise to the occasion, no matter the setback, is critical.

To ensure consistency, taste items regularly and consider having an unknown patron come in now and then to test the entire experience, from seating to service, quality, and cleanliness. 

Dreaming About Restaurant Two Before Establishing Restaurant One

While acting on your dreams is the key to successful living, expanding too quickly can result in failure. Knowing what works and your target customers are vital as you grow your brand. At EMERGING, we help restaurants successfully expand through the use of data analytics, extensive research, and careful consideration of all the elements that create a successful brand. 

  • Soft Open

New restaurants almost always become the talk of the town. People are anxious to find out if yours will offer the concept, quality of food, and the experience they long for. Be ready. Soft openings with friends and family ensure your team is prepared for the grand event and every day after.

  • Invest in Your Staff

Owners and operators were beyond ready when the constraints created by the pandemic began lifting. Unfortunately, many of their employees had sought employment elsewhere, and the excitement soon turned to reduced hours of operation and closed sections. 

It’s important to consider the actions you can take to ensure a solid team that stays with you down the road. This strategy incorporates good pay, training, and possibly offering benefits, like a discounted membership at the nearby gym. The result is a more balanced lifestyle and grateful employees. Be positive, supportive, and challenge them to be their best selves. 

A program like Tipzyy can help. It’s an app that trains your staff in the art of upselling while offering competitions, keeping staff motivated to do their best.

Avoiding Restaurant Failure

While challenging, success is certainly within reach for those with a solid plan and a strong background. Remember that change is inevitable in any industry. Keep a wary eye on the horizon and stay up on this ever-evolving business model. Give your restaurant the best opportunity to thrive by understanding the numbers, listening to guests, delegating to diminish the chances of burnout, and following these important principles. 

This is undeniably the tip of the iceberg when it comes to successful restaurant tips. At EMERGING, we work with the industry’s top restaurants, entertainment concepts, and ResTech firms. We help restaurants surpass their goals and expand successfully, mitigating risks while increasing profits. To learn about becoming part of our team or to schedule a consultation, contact EMERGING today.


Do restaurants make money in the first year?

While some restaurants break out of the gate with incredible speed, many don’t turn a profit until their second year. To ensure your best chance of surviving and then thriving, start with an appropriate level of funding and extensive experience.

What percentage of restaurants fail their first year?

According to the National Restaurant Association, about 30% of restaurants don’t make it through their first year. A few reasons restaurants close their doors include lack of capital, poor management, no experience in the restaurant industry, intense competition, and poor location choice. 

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