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What Myths are Hampering your Restaurant Business?



The restaurant business can be just as challenging as it is fun. From the quality of the food you’re serving to the tip pooling and tip sharing methods you’re implementing, everything needs to be on point. It’s easy to think that the simple provision of good food and customer service, as well as the implementation of delivery and tip distribution software, is good enough to ensure your restaurant is successful. However, establishing success in a very competitive industry requires that you go beyond the norm. There is no such thing as ‘enough.’ You can always do more.


Many myths exist in the restaurant industry and may be preventing you from going all out and seeing the kind of return you hoped for when you established your business. These are the myths that are hampering your restaurant business and the ways you can counteract them.


Restaurants Mostly Fail in the First Year



Especially if you’re running a small restaurant business, this myth can be quite the intimidator, especially if you don’t see instant results. It has been said that 90% of restaurants fail before the end of year one. However, this myth has been debunked.


Through studies conducted in recent years, the Bureau of Labor Statistics deduced that just 17% of restaurants closed in the first year between 1992 and 2011. It’s a misconception that if you don’t hit the ground running, you’re prone to instant failure.


Once you have a firm marketing strategy, can successfully (and efficiently) allocate resources and have quality technology to count on, like strong tip management software, you stand a greater chance of surviving past the first year.


Great Food Will Make Your Restaurant Successful



One of the easiest traps to fall into is thinking good food is all you need to make a successful restaurant. If your food is top-notch, and people like it, they’ll patronize it more, and that should make your restaurant successful, right?


It helps, sure, but you need to factor in the plenty of other restaurants that also serve top-quality food. Thinking that great food is the most prominent driving force behind a successful restaurant business rather than being part of that force leads to complacent service and lazy marketing, among other things.


You should consistently find ways to keep customers coming back. There are many cost-effective ways to market and present your services, so customers are convinced that you’re the biggest thing in town. A successful restaurant also needs a versatile team to successfully cater to the needs of each customer. Meeting more of those needs means more/better tips, leading to more emphasis on tip allocation and how to fairly distribute tips among your staff.


Loyalty Programs Are Ineffective


Claiming loyalty programs are ineffective couldn’t be further from the truth. Statistics from the National Restaurant Association show that 56% of family restaurants and just under 70% of fine dining institutions have seen increased customer participation in loyalty programs.


Additionally, most consumers are likely to check out restaurants that provide these programs. Offering discounts, special incentives, and other rewards positively affect your restaurant brand’s reputation and outreach. The addition of these programs can lead to customers being more willing to spend on your services over time because you’re always looking out for their best interests, which can lead to more tips, putting your tip sharing software or tip pooling software to good use.


Discounts are the Key to Getting New Customers


On that note, however, it should be stressed that not every discount you offer your customers is a good idea. Sure, you want to encourage loyalty with that kind of friendliness. But, too much of that friendliness can hurt your business’ bottom line too.


Use discounts that only make sense for the business and the customer market it’s attracting. It’s all about timing and quality with your promotions, coupons, and special offers, not quantity.


Tips Must Be Monetary



Non-monetary tips aren’t something employees are fond of, especially if they’re working for lower wages and need that additional financial boost. No restaurant tip is automatic, after all.


However, while monetary tipping is the typical tip distribution method involving customers and staff, smaller gestures are practical tips just the same and encourage staff as they know their work is fully appreciated. Some customers may buy the bartender a drink as a thank you or offer them a gift, especially if it’s someone who’s served them before. These gestures show appreciation and the heights of customer satisfaction. They should be regarded as measures of success in how your restaurant business is consistently attracting customers.



For all your automatic tip sharing and tip management needs, or advice on how to calculate tips effectively, TipHaus has all the automated solutions to optimize your restaurant business. Contact us today for all your tip management needs!

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