4 Important Factors When Choosing a Location to Open a Restaurant
Choosing a location for your restaurant is one of just a few keys to profitability. Parking and accessibility can be as crucial to a restaurant's success as great food and service. There is a famous saying in real estate that also holds true for restaurants: "You make your money when you buy."
A restaurant's location influences many aspects of your operation, including the menu and style of the dining room. If you already have a certain restaurant location in mind, don’t get too attached until you know if it has all the right requirements for a successful restaurant.
Ideally, a new restaurant location should have its own parking lot. If that isn’t an option—for example, in a major city—consider partnering with a hotel in the area that has its own parking options. Many famous restaurants are housed in hotels, and for good reason. Not only is there parking, but the benefit of foot traffic that is staying right upstairs is incalculable.
There’s a reason that major restaurant chains are often located near highway exits: It makes them accessible for customers. Certain restaurants can get away with food or service that isn't the best simply because their locations are so accessible, like restaurants near the Eiffel Tower or Collisseum. There is plenty of foot traffic in urbanized areas, and restaurants only need to attract the customers from the street into their business. Most successful restaurants—other than the truly elite—are easy to find, and you will find them in city centers or unique locations throughout the world.
This goes along with accessibility and is very important for new restaurant locations. People have to know the restaurant is there, either in person or on their mobile devices. This is why property prices in downtown districts and developed strips are higher than other areas. They offer a level of visibility that can bring in a great deal of walk-in business. Consider advertising in search engines and social media to enhance your presence across all forms of media. Make sure to register your restaurant in search engines as the type of food you offer and your price point, as it will be easier to attract the clientele you want when they go to search.
Are there enough people in the area to support your business? There need to be enough people who live in or pass through the area on a regular basis to keep you busy. To determine a particular area's population base, you could do a site study. However, these can cost up to $25,000. Most people looking at their first restaurant don’t have enough money in their budget for a professional survey. A less expensive method to determine the population base of a certain area is to use a pie chart, as well as asking the local chamber of commerce and town office for more information.
If you would rather pound the pavement, simply walk around the area where you plan to build. Intuition can place a big role in choosing your site.
Address all these elements when you sit down to draft your business plan for a new restaurant, which you will need before applying for a loan. In addition, by understanding each of these elements, you can better choose the right location for your new restaurant.