Ever pass by a retail store that seems to change businesses every six months? Assuming that it’s not haunted by poltergeists, this is the kind of situation that clearly demonstrates the point of this article – that even the right business won’t succeed in the wrong location. This is especially true for restaurants because if people don’t know you’re there, they can’t become your customers. So how do you know which is the right location for your restaurant or food business? Here are a few tips to help you make the right choice.
Know the ‘hood
Decide which neighborhoods would be best served by your food concept. Observe where the locals are eating now and what types of food are already available in the area. Note the average amount people are spending and how the current offerings compare with the menu you have planned. If this is your first location, I recommend that you choose a neighborhood that is established and that you know well. After all, your first customers are likely to be friends, family, community members and business associates who can help get the word out and bring their own crowd in. Many restaurateurs will develop a concept based on what they perceive to be unique, a better value – or completely missing from an area.
Think looooong term
Neighborhoods change so it helps to begin your search with someone who not only knows the neighborhood, but where it may be going. Since you will be negotiating a long term lease, a real estate broker with experience in the area can be an invaluable resource. They may be able to suggest other locations that are equally suitable or know of spaces that may be coming available soon. They can also inform you of new developments in the area, retail trends or tenants that plan to move in or out.
If you build it – will they come?
An absolute must for any new restaurant is traffic – either on foot or on wheels. Unless you are planning to hire a celebrity chef that can draw people to your destination, your customers need to be already there. You can get information on population statistics by checking with the local or national Chamber of Commerce http://www.uschamber.com or by going the United State Census Bureau website http://www.factfinder.census.gov. You will want note the type of population as well – their approximate ages, income levels, daily routines and lifestyles. Are they students, professionals, families with small children, tourists, retirees, etc? Here again, your broker can help by providing you with data from websites accessible only to real estate professionals.
You can also do some of your own due diligence. Lace up your walking shoes or hop on your bike and scope out the area yourself. Are there enough people around during the hours you plan to be operating? What times of the day is it busiest? If it’s when people on are their way to school, to work or to shop, you may want to offer a special breakfast menu or an early lunch. If it’s near office buildings or schools, you may want to offer lunch specials and after work promotions as well as catering, delivery and takeout.
If the location requires a car to reach, is there sufficient parking? Will you need to offer valet parking? Is there easy access on and off the road? Will your restaurant be visible from the road or will you need strategically placed, eye-catching signage to direct people to you? Also look at what other types of attractions, businesses or institutions are nearby that will help to bring in potential customers.
Do the math!
No business plan is complete until you’ve calculated the rent verses income potential. Because the best locations are usually the most expensive, you need to figure out a location-to-population ratio that you can work with.
Don’t forget to look into the zoning laws, regulations, community board approvals and permit requirements that may come into play at a particular location. By consulting with a construction company, expeditor, liquor lawyer or real estate attorney you will avoid costly mistakes, prevent delays from failed inspections and be able to open for business in less time.
Remember, most people won’t make the effort to hunt for a restaurant. They go where it is convenient or in reasonable proximity to where they normally travel. And, they will return if they had a positive experience – a combination of an appealing atmosphere, delicious food, an interesting menu, great service and fair pricing. By keeping this in mind before you begin your search, you’ll know the right spot the moment you see it!
Written by Marjorie Borell, VP- Restaurants and Retail, New York Commercial Real Estate Services. Visit RestaurantSpaceNY.com