Read a stat that 80% of restaurant fails happen in the first 18 months

I was scrolling through some National Restaurant Association data last night and saw that 80% of new restaurants close within 18 months. That blew my mind because I always hear the general failure rate numbers but never broke down by timing. Makes me wonder how many of those places had solid food but just bad cash flow planning. Any of you guys made it past that mark and got a tip for the new owners?

2 comments

2 Comments

thea7042d ago

Oh yeah, 80% in 18 months sounds about right. Basically enough time to realize "oh wait, I actually have to pay for food AND labor AND rent at the same time and somehow still make money?" Most new owners I've seen blow through their savings on fancy menus and custom furniture instead of having a 6 month buffer for when things inevitably go south. It's almost like running a business requires more than just loving to cook your grandma's meatloaf recipe.

elizabethwhite2d ago

I mean 18 months feels oddly specific, is that really a hard cutoff or just a round number somebody picked? I kind of wonder how many of those "failures" are people who just got bored or decided they didn't want to run a restaurant anymore, not that they actually tanked financially.