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Opening A Restaurant Location

Before you open a restaurant you need a solid business plan. Part of your restaurant business plan is researching just where to open! “Location, location, location.” It’s an old saying, but it expresses clearly how much of your success as a restaurant entrepreneur depends on where you open.

Download PDF restaurant dining tables outside

This short guide will help you understand the key considerations you should be aware of before locking in your restaurant’s location.

Research Demographics for Your Restaurant Location

Demographics are statistical information about the age, gender and income range of the people who live nearby. It’s important to do a demographic study before opening a restaurant location. The research you do for your restaurant location helps you know exactly what you’re getting into. The demographics of an area tell you about the community you’re planning to open a restaurant location in. The demographics of the area need to match closely to your restaurant’s target market or you’ll need to adapt your business plan so that your restaurant concept does.

Typical Demographic Questions:

  • What’s the average income?
  • What type of work do the people do?
  • What’s their average age?
  • What’s the ratio of single people to families?
  • What culture do they identify with?
  • What types of food are they familiar with?

Can you see how your restaurant concept will serve the needs of the individuals in the community and fit their lifestyle? If not, then you need to change your concept or change your location.


Do An Old-Fashioned Stakeout Before Opening a Restaurant

To make sure you’ve picked the right restaurant location, hang around on the street for a while. Make tick marks on paper to count how many people come by at different times of the day. Do people come on foot or by car? Is there a charge for parking?

Stand in front of your proposed site and strike up a conversation with passers-by. Ask them where they’re going, where they’re coming from and why they are there. Ask them if they like the type of food you’re planning to serve when you open a restaurant location there.

Visit other restaurants nearby and see how they are doing. What are they doing right? What are they doing wrong? Take note and search for online reviews. By learning about what works in the area and what doesn’t you can create a better restaurant business plan.

Your restaurant concept should be both a fit to your surroundings, and also bring in something special and unique, that improves the area.

Open Your Restaurant In the Right Building

Remember, everything is negotiable. As a restaurant entrepreneur, you already know how important it is to keep costs down to reduce risk to your capital. Negotiate any terms in the lease you can, to get a better deal. Remember to look for who pays costs like landscaping, heating and cooling and exterior design. Try to get the property owners to pay for these kinds of building costs.

Often, your restaurant is exactly what the developer needs to bring positive attention and improved ambiance to their building. This is a place of power which you can negotiate from. Bring your beautiful renderings and designs with you to the meetings, so they know what you’re offering to add to their building. Explain how your restaurant will raise the value of the other units they’re leasing.

Opening a restaurant location inside an historic building can be a great way to gain instant social credit in a community but be sure to take steps to mitigate the risks of using an older structure. Make sure that all the electrical wiring is in good shape and that there is proper ventilation and heating if you’re in a cold area.

Last but not least, beware of a long lease when choosing your restaurant location. You probably don’t want to think about it, but it’s important to consider how a 10-year or 5-year lease would affect your finances if you had to relocate your restaurant or close before the end of a long lease term. Establish your presence in the area as a popular destination first, then consider a longer lease.


Choose the Right Space to Open Your Restaurant

Make sure to have a full inspection of the location before moving in! A building in a poor state of repair must be fixed up before your open or before design begins or it can end up costing much more than you planned for. Unaddressed problems with the site will negatively impact guest experiences and staff productivity — as well as your bottom line.

Resist the urge to be impulsive and falling in love with a restaurant location. Understand the impact of the situation. Are there objects that are immovable that must be built around? Is there really enough room for everything you want to build? Keep in mind that what looks like a huge empty area will quickly close-in when you start adding a kitchen, wait-station, bar, dining area, and so on. Start designing the proposed layout before you fully commit. Use colored tape on the floor to mark out where everything would go, so you have a real sense of space management. It’s better to find out it’s not going to work now, then when you have already invested money in building.


Avoid Opening a Restaurant in a “Jinxed” Location

Learn from other’s mistakes to avoid them. Has this location been home to multiple different restaurants in a short period of time? Maybe there is a difficulty that the previous owners encountered that you’re not aware of? If there is something you’re missing that’s made it hard to be profitable or after frequent turn-over, people in the area may come to associate this place with poor or inconsistent quality. You certainly want to avoid “The Curse” when choosing your restaurant’s location.

Ask lots of questions and do plenty of research before opening a restaurant location. Your restaurant business plan helps you become successful by showing you problems to avoid and opportunities to pursue, to protect and grow your investment.

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