“Location, Location, Location” Hold Everything…
Many startup entrepreneurs go looking for a location first. I believe you need to find your ideal customer before even thinking about finding a space.
No doubt finding a location is especially significant for restaurants because they rely a great deal on visibility and exposure to their customers.
However, before you spend any time and money on searching for the best location, you need to find your best customers!
The following information is found out by asking the following questions.
Where do they live?
What type of services do they desire, such as table service (wait staff/no wait staff)?
What type of concepts do they want such as fast -food and drive-thru, fast casual such as Five Guys or casual dining such as Applebees?
These are just some of the questions that play a big part in where you locate.
When choosing the best location for your business, your first step is to target the right community (suburbs or city).
You can analyze the communities you’re thinking about by considering the following questions.
Is the population base large enough to support your restaurant?
Does the community have a stable economic base that will promote your restaurants growth?
Do the demographics closely match that of the customer you wish to serve?
Next, you’ll need to analyze the population.
Each year, the U.S. Census Bureau publishes the Economic Censuses, which are comprehensive studies on the number of businesses in various areas and the populations of the communities where they’re located.
Once you know those statistics, you can decide if this is where you should establish your restaurant.
For more information, visit the Census Bureau’s website.
Keep in mind an area’s economic base can have a direct impact on your restaurant. People move from one place to another for better jobs, more money, better schools, and a variety of other reasons.
To research the areas economic base, check census data and other business statistics for the following information.
The percentage of people employed full-time and the trend in employment.
The average family income.
Per capita total annual sales for goods or services similar to yours.
Here are some red flags to pay attention to!
Is there a necessity for high school and college graduates to leave town to find employment.
The inability to find local jobs.
Declining retail sales and industrial production.
Local business owners are experiencing weak sales.
Here are some favorable signs!
There are chains- or department-stores opening in the area.
Branches of large industrial firms locating in the community.
An active and progressive chamber of commerce and other civic organizations.
Excellent schools and public services.
Well-maintained business and residential properties.
Good transportation facilities.
Construction activity and a minimal number of vacant buildings and empty houses for sale.
It’s also vital for you to understand the demographic profile of your potential customers to evaluate a community for location properly.
See if the city or town you’re considering offers a population with the demographic traits necessary to support your restaurant.
Purchasing power – Search out the degree of disposable income within the community.
Are residences homes rented or owned?
What are the means of transportation?
Do prospective customers in the area own vehicles, ride buses or bicycles, and so on?
Age ranges. Are there primarily young people still approaching their prime earning years, young professionals, empty nesters, or retirees?
Family status – Are there lots of families in the area or mostly singles?
Location, Location, Location Choosing a Site…
Well, I’ve covered just some of the ways you can find out about your potential ideal customers before you find your restaurants site. Now let’s look at choosing a location.
SBA studies found that poor location is among the chief causes of all business failures. In determining a site for a restaurant operation, you must be prepared to pay for an excellent location.
The cost of the site often reflects the volume and quality of the business you will build.
Never select a site merely because the business is open and available or because the rent is low. Keep in mind that there is a direct correlation between low rent and high advertising expenses.
Base your selection of a site on the market research information you’ve attained and the potential of the area to generate income support your restaurant.
The most important consideration for choosing a site for a restaurant business is a convenience for customers.
Restaurants don’t need to locate in high-rent districts unless you want to open a fine dining/high-end restaurant then you may have to establish in one.
It’s essential to conveniently located on the beaten path and be visible to your customers.
You’ll want to consider the following factors when searching for a location for your business:
Restrictive ordinances. You may encounter unusually restrictive, such as limitations on the hours of the day when food purveyor trucks are permitted to load or unload.
Cities and towns are made up of areas from a few blocks to many acres in size and are zoned for only certain types of tenants. Within each zone are often further restrictions.
A commercial zone may permit one type of business but not another, so make sure to check the zoning regulations of any potential location before pursuing a specific site or spending a lot of time and money on a market survey.
History of the site.
Learn about the recent history of each site you’re considering before you make a final selection. There are sites in malls and big shopping centers, as well as in independent locations that have been occupied by a succession of businesses that failed.
Businesses most often fail because of poor management or lack of experience but sometimes choosing the wrong location is a factor. Find out how the site you’re considering affected the businesses of previous tenants or owners.
Something else to keep in mind is your business neighbors. They can influence your volume of business. Their presence can work for you as well as against you. Make sure your neighbors attract customers with a similar demographic profile as yours.
How much rent can your business afford to pay?
Your first-year profit-and-loss projections will tell you the number of sales your business will most likely generate.
Terms of the lease.
Occasionally, an otherwise ideal site may have unacceptable leasing terms. The time to negotiate leasing terms is before you sign the lease.
Negotiating a lease is a common practice. Be sure you consult with a professional if you no experience in this area.
Accessibility to your customers.
When determining accessibility, sit in your car and judge traffic patterns (both on foot and in cars) at different times of the day. Try to decide what hours your business needs to keep to be most convenient for customers.
Revisit the site on different days to observe any changes in the pattern. Do some informal research by interviewing people passing by the place you are considering.
Do they feel a need for your type of business at this location?
Would they patronize it?
What kinds of food and services would they be interested in having in their area?
Where do they now go to eat?
Customer parking facilities.
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