Business & Finance Health

Things to Consider When Your Restaurant is Going Out of Business

The restaurant industry is a tough business, with up to 60% of restaurants failing to make it after their first year, and 80% of them failing to make it past five. These figures can provide some solace if your restaurant is going out of business, then, because it’s not all that uncommon, and doesn’t necessarily mean you were solely to blame for your bad luck.

Yet while deconstructing a business and considering where to go next can be a tough ask and quite an emotional outcome to pursue, doing so with the most amount of dignity is important. This way, you can also limit your losses and do your best to offset the assets you already have.

In this post, we hope to offer a few tips that can help should you find yourself in this tight spot.

Consider Selling Your Inventory & Assets

Restaurant equipment is fairly valuable, and always in need. But first, we would recommend adequately stripping the restaurant of its assets if you cannot sell the business itself. Placing these items in a storage unit offered by Park City Self Storage is your best bet, as then you can ensure your valuable equipment will be protected around the clock and stored in the best possible conditions.

From here, you may auction off your old equipment, storage units, refrigerators, cooking utilities, and more, thus limiting the losses you face and helping you make some headway with your debt.

Make Headway With Your Finances

It can feel all-too-temping to place your head in the sand and ignore the financial obligations you are tied to and may be chasing you with renewed vigor. Losing a restaurant can be tough enough, let alone meeting your debts after the fact. 

We would recommend being totally transparent and proactive about managing and consolidating this debt, perhaps through using debt consolidation services, the advice of your accountant, or loan settlement programs with your bank. Whatever you do – don’t ignore, that will simply expand the scope of the problem.

Thank Your Staff & Guests

While this initiative may not have worked for the time being, it’s good to avoid burning bridges and sullying your professional reputation. Who knows if you’ll get back into the restaurant industry in the future? 

For that reason, posting a grateful note to your patrons and especially those staff members who have worked with you can help you close those relationships on a positive, if bittersweet note. This way, you can retain your dignity within the community as appropriate. Social media can provide the best platform for this – but personal messages towards your staff work too.

Don’t Be Disheartened

The truth is that any restaurant investment is a process that involves heavy risk, and sometimes, that risk doesn’t bear fruit. Even professional chefs like Gordon Ramsay and Marco Pierre White have had restaurants fail in the past. 

This doesn’t necessarily mean that you were terrible at pursuing this dream, nor does it mean you can avoid learning for the future. Yet there’s no reason to beat yourself up about it. Recalibrate, and look to the future with a more informed experience.

With this advice, we hope you can settle your restaurant appropriately, even when it’s going out of business.