Restaurant Survival Mode Takes Vision and Planning

So, you're considering closing your restaurant? You are not alone. For everyone in the business the thought periodically comes into play sometimes weekly, often daily, and depending on the stress level and problems we face, possibly, hourly.

And, it is happening more frequently to more owners as locations are being shuttered across the country.

According to an article in The LA Times more restaurants have closed this year than in any year in the past decade. And, making matters worse, most of the closures have been small family owned businesses that just couldn't hang on.

Chuck Keagle, who has closed six of the 10 Cask n' Cleaver Steakhouses his family owns claims "It's been a miserable 2 ? years." According to Keagle, customers are spending about 25% less than during the economic boom.

And even though business began to stabilize for Keagle and others, with the decrease in spending and small profit margins to begin with, many owners are saying enough is enough.

Before you make the decision to close the door, you need to stand back and analyze what is driving you towards that decision. Is it the pressure of paying bills? A lack of capital? Or, is the stress level simply too high to continue to deal with?

Whatever the answer, make sure to take time to think about your investment, reformulate your business plan, and analyze all of your options. Closing the door on an on going business, no matter how difficult the future may seem is a monumental decision that is harder than just leaving one night and tossing the key. Plus, it costs money.

Often, lots of money.

One of the fallacies of closing a restaurant is that the owner assumes the stress and turmoil of no business will end. Unfortunately, the stress and turmoil continue only now cash flow has stopped, completely.

That is why it s so difficult for single unit operators to end the misery. Most restaurant owners deplete their reserve funds and run though ever penny they have in hopes business will turn around.

In the LA Times' article one restaurant owner claimed he was in "survival mode". He had been in business for 20 years and he had enough cash reserves for another 18 months. He was going to attempt to hold on to see if things would get better.

While holding on is a great way to protect our assets, another step would be to develop an exit plan that will protect a portion of your reserve and with luck, bring some return on your investment.

There are steps to take before throwing in the towel. But these call for a lot of thought, a good business strategy and a game plan.