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Given the dismal failure rates for new restaurants (some reports put it as high as 90%), it is heartening to watch a local restaurateur succeed with a new restaurant. But can a successful new restaurant ever be too successful?

Being “too successful” may sound like a nice problem to have; after all, how can you ever have too much success? But a hot new restaurant can, in fact, overestimate its capabilities and cause its own demise.

A few months ago, a brewpub restaurant opened near a friend’s house in California. It filled a continually unsuccessful restaurant space located in a residential mall. Locals in this densely populated area spoke of it as a doomed location since multiple restaurants had failed. Yet, the local population was hungry for a good restaurant where “everybody would know their name.”

These Californians may have finally gotten a restaurant that will survive. Why? Because the owners wisely shunned some initial revenue by carefully piloting their new endeavor toward long-term success.

This new venture features multiple outdoor fire pits built into the tables, family-friendly outdoor areas, and a dog-friendly patio perfect for the local family-centric neighborhood. The bar is efficiently designed with rustic wood and metal seating on all sides. Roll-up doors bring the outdoor breeze into a covered room where food service is concentrated. Multiple TVs for sports, myriad craft beer on tap, a full bar, and a sleek menu of food options round out the experience.

Go soft for openers

So far, the response has been overwhelming. So much so that wait times can be two hours before enjoying a simple meal and a beer by a fire on a late spring evening. But here’s the thing: It’s still a soft opening at this place. It is slammed most evenings, but it has limited hours and a limited menu while a portion of the patio still has construction materials on stacked wooden pallets waiting for its expansion.

This restaurant owners have created a demand partly by being so limited in its initial offerings. They knew that being too successful at first would develop insurmountable problems later. With the rush of business that a long-anticipated restaurant gets, imagine how detrimental full hours and menus would have been to service and food quality. Instead of a potentially disastrous grand opening without a practice run, the owners have carefully crafted a manageable operation that can expand appropriately as the initial excitement wanes.

Anthony Bourdain’s book Kitchen Confidential chronicles dozens of failed restaurant experiences that come from the hubris of owners who think that a little initial success confirms their expertise and perfect formula. Time after time, the owners would quickly open another restaurant and find themselves unable to provide the dining experience which keeps customers coming back again and again.

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Keep ’em coming back

A new restaurant can be too successful by losing control right from the beginning. Waiting for a table at a new restaurant doesn’t dissuade people that much; waiting forever for food does irritate them—especially if it’s because a new kitchen crew and a bevy of servers are not trained and ready for the onslaught of initial customers. If you can’t keep up from day one, you will never regain the trust of diners. If you’re lucky enough to get a second chance and still have not recovered control, you will lose them forever—they simply won’t return. And since retail business relies on repeat customers, the initial impression is vital to long-term success.

For these California restaurateurs, the short-term plan means less initial revenue for the sake of longevity. The soft opening is providing numerous learning opportunities for the owners and their staff to hone their skills. They get early feedback on preferred menu items and will revise and expand the menu accordingly. Bartenders and servers are learning who the regulars will be, what their preferences are, and ways to keep them coming back.

In the months to come, the menu will expand a bit but will have already been refined by early customer feedback. As the newness wears off and the owners can judge what works best in what had been a doomed location, they can intelligently scale up or down to achieve the greatest profit. Maybe they will open the rest of the patio, extend hours, or initiate reservations to keep service levels and quality exceptionally high.

For now, the long wait is tolerated while sipping local craft brew and running into neighborhood families you might not see often. This soft opening and slow, controlled operation will benefit the neighborhood business. When the owners chose not to be as successful at the start, they were calculating their long-term success. When customers return again and again, they will undoubtedly be greeted by name.

RELATED: Business Lessons Any Entrepreneur Can Learn From a Failed Restaurant

The post Can a New Restaurant Ever Be Too Successful? appeared first on AllBusiness.com

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