- The main issue isn’t the food: Many restaurants fail not because of taste, but because of poor management.
- Without a solid system, your business is vulnerable: Over-reliance on the owner and manual tracking makes it hard to scale.
- Technology adoption is key: Restaurants must keep up with market shifts and changing customer behavior.
Restaurants don’t fail because the food is bad—but because what’s behind the scenes is falling apart.
You’ve probably heard it before: “As long as the food is good, the restaurant will survive.” But reality paints a different picture. Over 70% of foodservice businesses in Indonesia shut down within the first three years.
And most of them? Not because the food wasn’t tasty, but due to messy internal management.
Ever felt like your revenue is growing, but your profit doesn’t move?
Or wonder why your inventory keeps disappearing?
If so, these red flags might already be present in your business—and it's time to face them head-on.
Red Flag #1: Uncontrolled Operational Costs
Without clear numbers, costs can quietly eat away your profit.
For example: You’re making IDR 300 million a month, but 45% is going straight to labor costs. Ideally, operational expenses—including staff and raw materials—should be no more than 60–70% of your revenue.
Many fast-food restaurants make this mistake: too many staff during off-peak hours, or bulk buying ingredients without checking daily sales data. The result? Spoiled ingredients, bloated payroll, and strained cash flow.
If you’re still tracking everything manually, it’s hard to identify waste—or where to cut costs.
What you need: A system that gives you real-time insights into daily, weekly, and monthly expenses.
Red Flag #2: Manual and Chaotic Management
A major issue that causes stagnation? Overdependence on the owner.
When the owner takes a break, everything stalls. Staff are unsure what to do because stock, processes, and reporting all depend on one person.
If you’re still using notebooks to track inventory or juggling spreadsheets across folders, you’re playing with fire.
A restaurant with three branches in Bandung had to close two locations because the owner couldn’t be everywhere at once. Their system couldn’t function independently—and when key staff left, everything fell apart.
What you need: A reliable system, not just a reliable person.
Red Flag #3: Ignoring Consumer Behavior Shifts
The market evolves—fast. If you’re still running campaigns like it’s 2018, you’ve already lost ground.
Modern customers want convenience—like ordering through WhatsApp or getting a response quickly on social media. If your restaurant can’t be reached online or never follows up with past customers, you’re missing big opportunities.
Example: A family restaurant in Surabaya lost loyal customers because they ignored social media feedback. Those customers moved on to restaurants that responded faster.
Customer retention today isn’t just about great food—it’s about using data, segmentation, and timely campaigns. This is where integrated CRM and POS systems shine.
Red Flag #4: Unprepared for Competition or Expansion
Opening new branches is exciting. But can you replicate your success consistently?
One of the most common problems: inconsistent SOPs. One branch offers free water, the other doesn’t. One uses cups, the other glasses.
Small things like this make your brand feel unreliable.
And when the owner asks, “How much frozen chicken is left in each branch?”—no one has a quick answer.
It’s not your team’s fault. It’s a lack of centralized, connected systems.
Remember those viral restaurants that expanded fast—only to close half their branches within months? Don’t let that be your story.
Red Flag #5: No Branch Monitoring System
More branches = more complexity. If you can’t see the full picture, you’re driving blind.
Waiting for end-of-month reports means you find out losses too late. No shift tracking? You won’t know which branch is short-staffed during peak hours.
A café owner in Jakarta said they didn’t realize one branch was losing money for 3 months straight—because financial reports kept getting delayed. With a real-time dashboard, that could’ve been avoided.
What you need: Daily automated insights—not just physical presence.
Red Flag #6: Ignoring Legal and Crisis Readiness
Many food & beverages businesses underestimate the importance of legal compliance and risk management.
COVID-19 proved this. Only businesses that quickly switched to delivery and used their customer database survived the shock. The rest? Gone.
Some didn’t close because of low sales, but because they couldn’t keep up with new tax or permit regulations. Legal issues were left “for later”—until it was too late.
Don’t delay legal and risk planning—it’s your long-term survival tool.