HAVE A GREAT CHEF? BETTER HAVE AN EVEN BETTER LOCATION.
If you are looking to start a restaurant, you are probably familiar with McDonald’s stance that it is not a hamburger establishment, but a real estate investor. This giant corporation believes that location is more important than any other factor in determining success of a food establishment, and it is absolutely correct. When looking to start any local business, understanding the demographics and purchasing behaviors that people display among different neighborhoods can mean the difference between success and failure. This holds true, especially in the restaurant business. Don’t rule out a location just because another restaurant previously failed there. It could be the restaurant was the wrong fit for the neighborhood. A different concept at the same location could make all the difference.
Use the Demographics
No matter how great your food is, or how solid your business plan is, a restaurant cannot succeed if it is poorly placed. A good location doesn’t guarantee a successful restaurant, but it can help. Putting an upscale restaurant where most people eat fast food is never going to be a good idea. Similarly, throwing a greasy spoon in a downtown area filled with nightclubs and upscale housing might not end well either.
For a reasonable price, a prospective restaurant owner can obtain demographic data for a certain area. If you already know what type of restaurant you want to build, you may have to do this in a variety of neighborhoods, but if you are building your restaurant around what is desirable, you’ll only have to do it once. This is why some experts advise that individuals actually plan out location prior to anything else about the restaurant.
Use the Competition
If you know exactly what type of restaurant you want to build — and changing that is simply not an option — one of the best resources is your future competition. Obviously you can’t just walk into an established restaurant and ask for their marketing strategy, but you can use plenty of your own resources to figure it out. Look at a few of your most successful competitors and gather the demographic data of their clientele. Then you can look for an area where there is space available for rent that matches your target demographic. Like anything else in business, this can take time and research, but if you are serious about a successful restaurant, you need to be willing to put in the due diligence. If you can lock in the right location, you will be that much more likely to succeed.
Use Professional Help
A great real estate professional who knows the city can help you with demographics and trends to find the perfect location. And when you find that location, having the right lawyer can make all the difference when negotiating a restaurant lease. If you need assistance locating the best professional advisors to help you establish your new restaurant business, contact DiPasquale & Summers for guidance and consultation.