What is the Best Type of Restaurant to Open?
When considering opening a new restaurant, it can be tempting to look for a one-size-fits all model for success. Unfortunately, there is no one “secret to success” restaurant concept. Finding the right kind of restaurant to open is a mixture of deciding what kind of business you want to run, selecting the right location, knowing your competition and staying within your budget. Of course, certain concepts are perennial favorites; i.e. diners will never go out of style. While others are more up and coming, like fast casual and food trucks.
What’s your competition?
Are there already three barbecue restaurants in your area? Does it really need a fourth? And if so, how will you be different? It can be easy to dismiss other restaurants in the area as unimportant; maybe you feel like you can do it so much better (and maybe you can) but it is still a good idea to study their menu, prices and their audience. After all, their audience is who you are going after. Competition isn't a bad thing, by any means. It's good for neighborhoods, towns and cities to have a variety of choices when it comes to eating out.
It also forces restaurants to be their best all the time.
Who is Your Audience?
Who are your demographics? Who do you envision as customers? Families with small kids? College students? Young single professionals? Different restaurant concepts appeal to different types of people. Creating a menu for the a hip millennial office crowd will look different than if you were focusing on families.
What’s your budget?
This more than anything can determine what type of restaurant concept you decide upon. The amount of money you have for start-up capital can only go so far. For example, getting ready to open one of my restaurants, we wanted to install an authentic wood fired pizza oven and have that be the focus of our restaurant concept. But the cost to have it made and installed and to make the necessary improvements to the building (it’s far heavier than a traditional commercial oven and the floor needed special braces to support the oven) would have put us way over budget.
Instead we opted for a regular pizza oven and turned our focus to something else.
What’s your location look like?
If you have a location picked out, it can influence the type of restaurant concept you choose. For example, maybe you have a spot picked out on the coast and so, it would be a natural fit to feature fresh seafood.
Is a Restaurant Franchise The Best Option?
Franchises have a lot of perks: instant name recognition, ready-made menus, solid success rate. They can also be pricey. A McDonalds franchise costs around $300,000 minimum. Taco Bell requires a whopping $1.2 million, minimum! If you want to know more about buying a restaurant, check out this article, Most Popular Food Franchises and How Much They Cost by expert Don Daszkowski.
I would caution you against building any kind of restaurant concept around current food trends (or fads, to be more precise). Trends, just like in fashion, come and go. Think back to the Nineties, when coffee houses were all the rage. While Starbucks and Dunkin’ Donuts have both managed to keep coffee front and center as their main concept, few others have. Read more about spotting food trends and how to make them work for your restaurant concept.
Ultimately, the type of restaurant you opt to open will most likely depend on your personality and ability. If you are creative and want to work with people and food and well, create things - you probably won't want a burger franchise that comes with all kinds of rules and regulations. If you don’t like to eat at a place that has tablecloths, then a fine dining restaurant may not be the best choice. If you like a small, friendly atmosphere of a café or diner, perhaps build a unique concept around that.
If you are looking at opening a new restaurant strictly as a business investment, you may want to consider a franchise, which comes with name recognition and demonstrated success. Opening an independent restaurant gives you complete creative freedom. It is also untested - you won’t know for sure if your restaurant concept will work unless you try it.
Planning a new restaurant is exciting (and can be a bit scary). By doing research into the local demographics and competition and compiling a thorough business plan, you will lay a strong foundation for a successful restaurant.