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 or most profitable type of restaurant. 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. For instance, diners will never go out of style.
While other concepts are more up and coming, like fast casual and food trucks. Consider asking yourself these questions.
Who Is Your Competition?
Are there already three barbecue restaurants in your area? Does it really need a fourth? And if so, how will yours 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 hip millennial office crowd will look different than if you were focusing on families.
What’s Your Budget?
Your budget, more than anything else, 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 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 from instant name recognition and ready-made menus to solid success rates. They can also be pricey. A McDonalds franchise costs around $300,000 minimum. Taco Bell requires a whopping $1.2 million, minimum!
I would caution you against building any kind of restaurant concept around current food trends or fads. Trends, just like in fashion, come and go. Think back to the 1990s, when coffeehouses 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.
The Bottom Line
Ultimately, the type of restaurant you choose to open will also depend on your personality and ability. If you are a creative, out-of-the-box thinking and have a desire to work with people and food, 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.