Owning a restaurant in a good economy is a challenge. Owning one in a down economy is even more difficult. Here are the top 10 reasons why restaurants fail. Avoid these mistakes. 1. Constrained by Your Vision. A savvy owner knows it's all about the customer, not his or her personal tastes and opinions. Don't be self-possessed. Be open to opinions other than your own. 2. No Identity. Lack of identity is the opposite of being constrained by your vision. A restaurant's success depends on its ability to establish a brand and stick to it, so develop an identity and focus on perfecting it. 3. A Bad Opening. "You never get a second chance to make a good first impression" was never truer than in the restaurant business. There's a reason actors rehearse before opening night—you should too. 4. Hiring & Training. Just like a bad opening, bad service will kill your business quickly. If your vision isn't executed properly, the damage to your current and future customers is unavoidable. Most restaurants lack formalized training, procedural and operational processes. Learn from an experienced owner or hire a restaurant or hospitality consultant for expert advice. 5. No Formal Recipes. How can your kitchen, bar, and waitstaff train your staff without formal recipes? This step is critical to controlling costs, curtailing waste, and providing effective staff training. 6. Poor Inventory Management. The cost of food is a restaurant's single biggest expense and, unless the financial control systems are in place, you are vulnerable to a drain on your cash. Reducing inventory means a reduction in food cost, so manage your resources carefully. 7. Undercapitalization. Unexpected and unforeseen events happen all the time, especially in the restaurant business. In many instances, incorrect budgeting is the culprit. Don't get caught up in the dream of being profitable from Day 1—make sure you've got money left in the bank to help you ride out the difficult days. 8. Poor Ownership. Don't be an absentee owner. If you want to own a restaurant, expect to work. Otherwise, don't expect to get paid. But—and this is a big but—if you haven't put the systems, tools, and people in place that allow you to step away from the day-to-day operations, then you haven't bought yourself a restaurant; you've bought yourself a job with a misleading title. 9. Insufficient Market Analysis. A thorough examination of your restaurant's location is vital to know if it is to be successful and, once it is successful, staying on top of business trends will keep it that way. This is another area where an experienced owner, marketer or restaurant consultant can help. 10. Lack of a Business Plan. The previous nine points MUST be addressed in your business plan, and the plan MUST be right the first time. The business plan is what everything your restaurant will do is based on. It will force you to plan ahead, think about the competition, formulate a marketing strategy, define your management structure, and plan your financing, among other things. It is your roadmap to success. Do not proceed without a solid business plan. The old adage "failing to plan is planning to fail" is never more critical than in the restaurant business. Avoid these top 10 mistakes and enjoy the fruits of your labor!