Owning a Restaurant: Choosing a Location

As I continue to advise you on your restaurant startup, you’ll notice that all the steps are leading towards the important step of writing your restaurant business plan.

Introduction

There are so many aspects of owning a business to take into account to be successful. I’ve asked you if you have the drive and determination? Many times I’ve alluded to the pressures and pitfalls of being a restaurant and business owner.

I’ve talked about choosing a concept and choosing a name and I’ve given some management tips and helpful advice along the way.

Now, we’re getting to the real nuts and bolts of our journey: how to choose the right location.

I thought I would go over a few things I want you to think about while on your location search.

1. Visibility

busy street

How many times have your seen a restaurant open up and then close down a short time later? Have you ever wondered why this happens? Or have you ever passed a business and wondered to yourself why it was there in the first place?

I do.

If I’m being honest, when I was making my list of most important things to consider I had a lot of trouble choosing one above the other. Finally, I settled on the fact that people have to see you so they’ll think about you.

“Out of sight, out of mind.”

I’ve seen restaurants in the back of shopping centers, hidden behind other buildings. I’ve seen hotels located off the main roads. They usually aren’t around long.

We’re in a high profile business and in order to be successful people need to know about you and know you are there. That’s one reason social media marketing and technological trends work so well for our industry.

When I was running my deli, I was located in a strip center that was on a busy corner but located behind other businesses. My biggest obstacle when I opened up was just getting people in the door.

It took a ton of social media marketing and grass roots marketing such as fliers and visiting other businesses nearby. I even hired a kid to stand on the corner and spin a sign (which turned out to be the biggest draw, btw).

Make sure people can see you whether they are walking or driving by. It’s important to have a very visible sign that also lets people know you’re a restaurant that’s open for business. More on signage later.

Remember: visibility equals free advertising.

2. Access & Parking

parking lot

The one good thing I did have going for my deli was that once people knew about it, it was easy to get to and had lots of parking.

We were located within walking distance to many shops, businesses, schools, and apartment complexes. Our parking lot was also easy to get into from the main street. There were multiple entrances, a circular driveway if needed, and even an entrance from a side street.

All of this ease of access and parking helped during my lunch rush. The businesses and schools located close to me only had 30-45 minutes for lunch, so getting to me easily helped me because they knew they would be in an out within minutes.

It also made things easy for the vendor’s truck drivers during delivery times.

Keep parking and accessibility in mind when scouting locations. Customers won’t hesitate to move on to somewhere else if it’s too hard to get to you.

3. Size & Affordability

small kitchen

I’ve put these two together because I’ve met a few owners who actually do their due diligence when planning their restaurant startup and writing their restaurant business plan, unlike most who just think they can open the doors and be successful.

These owners find the perfect location but make one big mistake; they fail to take into account the location’s size and lease terms or buying cost.

Based on your concept, you should have a general idea of what kind of equipment you will need in your kitchen and front of the house. Keep that in mind when scouting sites. You want a kitchen that can flow and not be crowded or one that is forced to be unorganized because of your equipment.

Same with the front of the house. Customers don’t like to be packed in and employees need an easy flow to stay happy and efficient.

Also, you’ll want to keep your rent around what you will make in one day of sales. If you can’t do that, if rent is too high, find somewhere else. Don’t settle for high rent just because of the location.

Lease terms

The lease terms fit into the affordability category, but I wanted to talk about them separately.

Always remember you can negotiate lease terms.

I failed to do this with my deli. I was young and just learning the business side of running the restaurant. I had a small space (41 person capacity) and had the flow planned out well to accommodate for the business I expected.

However, I signed into a lease that was outrageous. At the time, it was taking me a week to make one month’s rent, not one day like the rule above. Of course, I started to get behind, and the landlord was unwilling to negotiate the rental agreement I had signed promising him the high rent.

Another problem was my sign. The light was not working and it was partially blocked from view by bushes and trees. The landlord refused to fix the sign or have the trees and bushes trimmed, sighting that in the lease I was responsible for anything with my name on it.

If I would have known I could have negotiated from the beginning, I may not have may not have agreed to the bad lease points and gotten into trouble.

What’s nearby & Competition?

lots of restaurants

The last two things I’d like you to focus on when looking for a location are what types of businesses are going to be near you and will there be any other restaurants close to you.

I believe it’s a good thing to be near other businesses. Retail businesses are great because you catch the traffic from passersby and shoppers who need to take a short break or meet for social time. Being located close to other types of businesses is good also because people have to eat at some point during their day, whether before, during, or after work.

Being close to your competition is also a good thing. In my neighborhood now, there are two huge grocery store chains directly across the street from each other. This is good for me because it makes them keep prices competitive.

Being located near your competition can help if you have a friendly rivalry, you or they can catch overflow business, and a reputation is built by having multiple restaurants located near to each other.

Be careful with competition, though. If there are too many of the same type of restaurant in one area it can hurt. You want to differ from the others so that customers don’t have too many choices.

By now I hope you’ve built a good idea in your head of what kind or restaurant you want to open and have begun to understand how to go about making it a reality. Soon we’ll take all of this and turn it into a business plan so that you can seek financing if you need to, or to use as a reference when you open.

If you have any tips for me, or would like me to or add information to these articles please feel free to let me know.

If you would like me to help you with any aspect of your restaurant startup or restaurant business plan, please contact me at any time.

Remember to like Serviceable and to share with your friends and coworkers.

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