Why Restaurants Go Out of Business

Recently someone asked me why so many restaurants go out ofbusiness. I answered that too many people open a restaurantbecause it's their dream.

A number of years ago I was walking along the street near myhome and office. I came upon a brand new Continental-typerestaurant down a few steps from the street, very atmospheric.Standing outside was the chef/owner with pride of ownershipwritten all over him. We fell into conversation, I congrat-ulated him, mentioned I was a publicist and he invited me into talk.

He explained that he was originally from New York, had spentthe last decade or so working as a chef in Florida at some ofthe top restaurants there. His dream was to open his own placeand he decided to do it in New York. His financial "backer,"if you could call him that, was a friend in a completelyunrelated field with very shallow pockets who had no ideaopening and running a restaurant was such an expensive project.

The owner/chef (we'll call him John) should have knownbetter but thought he could open on a shoestring. A very shortshoestring. He hired a waiter who agreed to work for tips anda Spanish-speaking (only Spanish-speaking--no English) busboy.John felt that since the place was so small, no more than 12tables or so), that as enough of a staff. I asked about someoneto greet people at the door. John said that the kitchen doorwould be left open and he could run out when people walked in.I'm serious! He desperately needed a publicist, amongother things; he said he'd scrounge up the money somewhere,and against my better judgment, I went to work.I tried his food and it was really wonderful. Unfortunately,while this man could certainly cook, he had no idea how torun the front of the house and didn't even have too firm agrasp of the economics of pricing his food. After less than two weeks, his one waiter disappeared so hewas left with a busboy who couldn't speak any English tryingto work as a greeter and a waiter.

One evening during this time I called the restaurant andthere was no answer. Wondering whether my client had goneout of business without telling me, I grabbed mt coat and randown to investigate. The place was dark and closed with nosign. As I walked away, two men walked up, planniung to dinethere. They saw it was closed and said, "I guess they wentout of business." The next day I spoke to John and he saidhe hadn't gone out of business but there was some big sportsevent that night and he figured there wouldn't be muchbusiness so he might as well close for the night. I explained to him that you can't close without at least a signand many people probably assumed he had closed for good.

John admitted he never thought of that.

I was able to drum up a fairly gratifying amount of business,critics' reviews (the New York Times reviewed it on radio)and a mention in one of the gossip columns. After two monthsI could see he had no idea what to do so I quit and thefollowing month so did he...he went out of business.

This should give you some idea why restaurants close.

Miriam Silverberg is founder and president of Miriam SilverbergAssociates, a boutique public relations firm in New York City. Listed in Who's Who of American Women, she has lectured extensively on how to create publicity and is a contributor to professional journals.