Starting a business isn’t an easy task. That being said, starting a restaurant business might appear to be very simple, but it is not actually that easy. Even so, ensuring sustainable growth and long time successful operations of the business might be more difficult than starting a restaurant business in the first place.
Small business financing might come in handy for maintaining the financial well-being of such an enterprise during difficult times, but efficient and well-planned strategies and business operation tactics are essential to ensure the growth of the business and its sustenance.
Australia has seen significant growth in the restaurant industry in the past five years. The changing lifestyles of people have led to an increase in the demand for restaurant services. The increased popularity of online food platforms like, UberEats, has also led to the growth of the industry. With a market size of approximately $19 billion and approximately 25,000 restaurants operating in the country in recent times, the restaurant industry has seen a growth of 1.7% in the past five years.
According to research and statistics, the revenue growth of the market has been 0.7% and the restaurant business sector has found new popularity amongst the residents of Australia. Several people have invested in the restaurant industry leading to a growing number of small-to-medium-sized restaurants in the country. Small business loans in Australia for restaurants have also been increasingly applied for, and have been provided by various financial institutions due to a rise in the number of new restaurants.
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The future market of restaurant businesses in Australia
Based on current market statistics and the growth index of the restaurant industry, the future of restaurant businesses in Australia is bright and shining. The rise in the demand for restaurant services and home delivery due to a shift in lifestyles is likely to further enrich the sector and ensure its growth in great numbers.
The rise in the number of small business lending firms that provide easy and fast small business loans for restaurants would also effectively lead to the start of several new restaurant businesses across the country through convenient financial assistance that could be a boon for several entrepreneurs.
The expected compound annual growth rate (CAGR) of revenue of the sector on an average is set to hit a record 5.1% during the period of 2018-2023. The industry has turned out to be an appealing sector of investment for entrepreneurs for its huge opportunities for growth and a comparatively low rate of failure.
The reasons behind the failure of a restaurant business
Restaurant businesses have a comparatively low rate of failure when compared to other small businesses of various other sectors. Research indicates that about 17% of restaurants fail in the first year of operation, while 80% of restaurants fail within five years.
However, the success of such an enterprise is greatly reliant on several factors. The failure of restaurants isn’t based on a specific reason but a number of them, with contingency planning and preparation being the key ones. Let’s take a look at the most common reasons behind the failure of restaurant businesses:
1. Poor customer service
Customer service is one of the most important aspects of any hospitality business. However, with the lack of proper hospitability and customer service, the longevity of the restaurant in the industry might be limited.
2. Lack of marketing
A huge number of restaurants fail to operate in the long run due to improper marketing techniques and insufficient customer reach.
3. Average food quality
With the rise in health consciousness and food awareness amongst customers, the below-par taste and quality of food and services of a restaurant is often responsible for its failure.
4. Neglecting the feedback & online reviews given by customers
Customer feedback and reviews, both online and physical ones, must be considered and given importance to.
5. Improper accounting and insufficient cash flow
Improper accounting of sales, revenue and financial management is one of the biggest reasons that lead to the failure of a restaurant business.
That being said, various lending agencies, like Hubbe provide excellent financial assistance and business funding for small businesses like restaurants to manage the cash flow and finances of such enterprises and ensure its growth. Small business lending services of different types can help in hiring new staff, improving customer service, enhancing online and offline marketing, hiring new chefs to meet the taste that the customers want and also creating an interesting infrastructure for the visitors.
With small business loans of various types, such as secured and unsecured business loans, different needs of the restaurant businesses can be efficiently met.
Also Read: How Alternative Finance Helped a Restaurant Business Owner in Australia?
Also Read: How Business Equipment Loans are Useful for Restaurant Business
