How Do You Choose the Right Restaurant Concept?

Gauge the competition and start small so you can make changes

Hispanic woman looking at restaurant menu


Sollina Images/Blend Images/Getty Images

There are lots of different restaurant concepts, from a food truck design to classic fine dining establishments. How do you pick the right concept when you decide to open a new restaurant?

Many an owner has chosen his restaurant concept before figuring out if it's the right fit for his location and this can be a mistake. Deciding to open a bakery/coffee house in a small town that already has three other highly successful bakeries might not be the best idea. Just like writing a business plan for your new restaurant, you'll want to do a bit of homework before you decide on a final restaurant concept.

Study the Competition

What types of restaurants are already well established in your area? Are there already lots of pizza places or Mexican-themed restaurants? If your concept isn’t different from the competition, how are you going to stand out from the rest?

Learn as much as you can about every other restaurant in your area—their menus, price ranges, and their customer service styles. Even if a particular restaurant doesn't appeal to you personally, it stands to reason that it appeals to a lot of other people if it's thriving and successful. Learn something from that. Find out why.

Is the food that great? Is it the type of cuisine that's being offered? Maybe it's the customer service or some other gimmick. Figure it out. It might even involve sending "secret diners" in for a meal and having them chat with other customers to find out why those folks keep coming back.

Launch this fact-finding mission long before you open your doors, and remember that the cuisine is a pivotal factor. If the most popular place in town is a Tex-Mex joint, you might want to head in a different direction. Even if your food is better, it will take a while to establish that, and it will cost you money to keep your doors open until it happens.

There's no rule that you can't start out with another concept and include your impressive Tex-Mex dishes as a side menu or feature. Just don't lead with them. Word will hopefully spread if you let your food do the talking.

Decide How Much You're Going to Spend

Certain restaurant concepts cost more than others. Do you want to specialize in authentic wood-fired pizza? A wood-fired oven is thousands of dollars more expensive than a regular pizza oven.

Does your restaurant menu require expensive ingredients like seafood or steaks? Even if you qualify for a huge loan to open your new restaurant, you'll burden yourself with a huge payment each month to service it—before you know how busy you'll ultimately be.

It’s great to dream big when you're thinking of a new restaurant concept, but starting small is sometimes the wisest option. Save the priciest equipment and food costs until you have a firm idea of your restaurant's sales and you have a solid customer base. Again, nothing says you can't add more features later.

Keep Your Focus

Variety and changing things up can be good or bad, depending on how far you take it. It can help your restaurant get off the ground more comfortably without a huge outpouring of money, but be wary of confusing your customers. Keep the "extras" to a minimum. Limit changes and additions to one or two items, not a wholesale metamorphosis.

One restaurant that comes to mind was a bakery by day and an Italian restaurant by night. It even changed names at appointed times. The phone would be answered "Hello, The Bakery!” at 4 p.m. then switch over to "Hello, Luigi’s!” an hour later.

This was very confusing for customers. Eventually, Luigi’s was dropped, and The Bakery went on to thrive.

If you decide to diversify as you get off the ground, keep your focus and keep it small. Again, word of mouth is key. Your product should do your talking for you. It's better for someone to say, "I had the best Carbonara at The Bakery the other night!" or wonder, "Wow, great Carbonara at The Bakery? Who knew? I should tell someone about that." You don't want them staring at the phone in their hands, asking themselves, "Did I call the right number?"

Be Wary of Fads 

Restaurant fads come and go, and it’s tempting to open a restaurant featuring the hottest new food trend. Remember the mid-1990s when coffeehouses popped up everywhere, and suddenly every mom-and-pop restaurant featured cappuccino? Starbucks rose to prominence during this time, but what about the others? Where are they now? You don't want to follow them into obscurity.