A peak in the window on the construction of the latest craft brewer in the South Bend/Mishawaka area. The Heavenly Goat Brewing Company will be opening in the former Gino’s Pizza in Heritage Square. This will be an excellent location and a highly anticipated opening. Good luck to Greg and Joel, we can’t wait!
It is a well known idea that restaurant businesses are notorious for starting up and failing within the first few years of business. Eye-popping statistics are thrown out like, “90% of all r…
Source: Why do so many restaurants fail?
It is a well known idea that restaurant businesses are notorious for starting up and failing within the first few years of business. Eye-popping statistics are thrown out like, “90% of all restaurant start ups fail within the first three years.” Researchers from Ohio State University, interested in the validity of this type of statistic, studied 2,500 restaurants in the Columbus area and found that only 25% of restaurants turned over ownership in the first year and 60% turned over after 3 years. This rate is still high, though not nearly as high as some anecdotes or even lenders would suggest. Of this 60%, many restaurants have not failed, they have simply been sold by their owners even though they are making money.
So what is the reason for the 60% rate of ownership change? H.G. Parsa, the professor at Ohio State University that headed up the study, concluded that most restaurants failed because of owners’ willingness to put sufficient attention on the business itself. Life often gets in the way, i.e. divorce, illness, children, etc. Those that have worked in the restaurant business know the hours are brutal and sacrifices of personal and family life are necessary to make a restaurant or bar successful. This can be very draining on an owner and many find that after a couple years they are no longer willing to give up family and personal time for the business. They may either choose to sell the business or simply devote less time into it and watch the business start to degrade.
This time and attention to the business can be the contributing factor to many of the more obvious restaurant failure reasons: Poor customer service, inconsistent quality, poor money management, insufficient marketing and lack of investment in quality people. These are all manageable issues. Quality restaurant employees are hard to find and while many staff are good people, they simply will not be as dedicated as the owner. That is a reality that owners need to be aware of. Owners need to be willing to sacrifice much of their time and energy for the business, create a well thought out business plan and execute the plan and adapt throughout the life of the business. The restaurant business can be rewarding and profitable but need to have the right kind of owners.
I got a chance to walk through parts of the Hoffman Hotel Apartments in downtown South Bend recently. The artist apartment building is now open and actively leasing. Currently the owners have 18 tenants that have already moved in since the building opened on March 18. The studio apartments are attractive with great views of downtown and Notre Dame! The project also features common fitness area and artist creative studio space. Pictured below is the creative space on the top floor.
LaSalle Hotel apartments next door are set to open in just a few months and will feature beautiful 1 and 2 bedroom apartments and commercial retail space. Two great projects for downtown South Bend.