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Small Business Management 5th Edition by Timothy Hatten
Edition 5ISBN: 978-0538453141Small Business Management 5th Edition by Timothy Hatten
Edition 5ISBN: 978-0538453141 Exercise 2
Everyone likes to eat…you love food…why not open a restaurant It may not be quite that easy. Kenny Lao, 30, knew he better be unique when he started his New York City Rickshaw Dumpling Bar in 2006. But Lao says, "If you have a strong concept and have your execution and operation strategies down pat, any time is a good time to open a restaurant-even now." Lao built his dumpling empire on six varieties of dumplings (including a chocolate dessert dumpling) and simple addons like Asian salad, noodle soup, and green-tea milkshakes. It takes approximately 2.5 minutes from order to delivery. Rickshaw sells about 1.4 million dumplings per year for $1.3 million in revenue.
Look at Figure 1.4, "Causes of Business Failure." If a restaurant business goes under, what do you think are the most likely reasons
Look at Figure 1.4, "Causes of Business Failure." If a restaurant business goes under, what do you think are the most likely reasons
Explanation
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Business failure:
Business failure occurs when a company gets closed with financial loss to the creditor. This occurs when in a business an owner fails to follow the basic rules and conditions for achieving success.
Causes for business failure:
Lack of concept
A good restaurant requires a clear and lawful concept. The business of the restaurant fails when it has not identified a good concept to be better than its competitor.
Lack of capital
The root cause for lack of capital is not having enough money to start a restaurant, poor decisions causing cash fund to deplete quicker than expected, or too many expenses on equipment.
Poor locations
Poor locations are the most important reason for a restaurant failure. The owner should set a target audience and location before setting up the restaurant.
Poor quality
If a restaurant fails to produce good quality food, it will definitely lead to business failure because restaurant is a business where high quality of the product is expected.
Inventory management
Poor inventory management will lead to the closure of a restaurant; without proper inventory management, a restaurant cannot perform better.
Business failure occurs when a company gets closed with financial loss to the creditor. This occurs when in a business an owner fails to follow the basic rules and conditions for achieving success.
Causes for business failure:
Lack of concept
A good restaurant requires a clear and lawful concept. The business of the restaurant fails when it has not identified a good concept to be better than its competitor.
Lack of capital
The root cause for lack of capital is not having enough money to start a restaurant, poor decisions causing cash fund to deplete quicker than expected, or too many expenses on equipment.
Poor locations
Poor locations are the most important reason for a restaurant failure. The owner should set a target audience and location before setting up the restaurant.
Poor quality
If a restaurant fails to produce good quality food, it will definitely lead to business failure because restaurant is a business where high quality of the product is expected.
Inventory management
Poor inventory management will lead to the closure of a restaurant; without proper inventory management, a restaurant cannot perform better.
Small Business Management 5th Edition by Timothy Hatten
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