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Choosing a Location for Your New Restaurant

Choosing a Location for Your New Restaurant

Few factors have more impact on a restaurant’s success than its location. Intense preparation, exciting menu items and unbeatable service can all prove defenseless in the face of a poor location. Whether you are beginning constructing a new building or starting up your restaurant in an established location, educate yourself on factors like demographics, real estate value and local competition in order to situate your new restaurant in the best and most profitable place you can.

Determine Your Target Market

After analyzing your demographic region, you can plan to target a group of people based on one or more shared traits. Make sure you place your restaurant where your target market actually lives, or where they are likely to be. When you understand your target market, you can figure out what location will gain you the most business. Commonly targeted market segments include families with children, business professionals and sports fans. If your concept is meant to cater to families, make sure you open your restaurant in a location that will be convenient and enjoyable for families to visit.» More on Target Marketing for Restaurants

Look at Local Area Demographics

Chances are good that you already have a concept in mind for your new restaurant. Likewise, you probably have your eye on a certain town or city as well. As the prospective owner, it behooves you to do a little digging into the local demographics. This involves researching characteristics of the people who live in the town and neighborhood in which you are thinking about planting your restaurant. Some of the most important demographics to consider include:

  • Age groups. Different people want different things from their community. As such, predominant age groups within an area will affect the business trends a restaurant sees. Ideally, you should situate your restaurant in an area with people who will frequent your establishment.
  • Population. The number of people in a given area is also important. Research the populations of towns and cities so that you know how large your potential market is. Some restaurants do incredibly well in small towns; others do not.
  • Income levels. By investigating income levels, you will become better aware of what the people in a given area are willing to spend, or what type of restaurant they would be most willing to visit.
  • Education level. Educated people, including college graduates and young business professionals, are drawn to certain concepts more than others. The opposite is also true. Consider the education level of the population in the area and how it will affect your establishment before you set up shop.
  • Crime rate. Criminal activity may be a detriment to some locations, since high crime has the ability to drive down an entire neighborhood. On the other hand, plenty of restaurants succeed in high crime areas. For example, restaurants with bars often find success in inner-city or downtown areas, which are often bustling with activity but usually susceptible to higher crime. Even locations with large populations may see more crime than smaller towns, but from a business perspective the larger city may prove more profitable.»More on Demographics for Restaurants
Analyze Your Competition

Explore your area for any restaurants that could pose a threat to your start-up restaurant’s success. If your intended concept is an Irish pub, but there are multiple establishments with similar concepts already in the area, you may consider looking in a different location. However, you may be able to lure guests who frequent the other pubs to your Irish pub instead, if it has something better or more attractive to offer. For any location you consider, perform some detective work. Map the area and research the other restaurants nearby, where they are located and whatever you can learn about their menus, prices and clientele.» More on Gauging Your Restaurant's Competition 

Consider the Components of Location

Be sure your concept and target market will be able to support your chosen restaurant location, in case of any setbacks. Little setbacks exist for just about every new restaurant, but paying attention to the details of your location can drastically reduce the chances of failure. Consider the following details and how they might affect your choice of location:

When Desire Outweighs the Difficulties
When there is a perceived need for a restaurant like yours in a certain location, it will appeal to people and bring in new customers. In this case, a difficult parking situation or poor visibility may not be a problem. There are plenty of restaurants that succeed without these details. However, start-up restaurants need all the help they can get to solidify a customer base, so do not overlook the benefits of a good location.
  • Visibility
    A restaurant that is located on a prominent corner at a busy intersection has high visibility. A restaurant like this may even be considered a landmark location. Conversely, a restaurant nestled in a grove of trees barely visible from major roadways will always battle a disadvantage simply based on its location.
  • Area traffic
    Determine about how many people walk or drive by your prospective location each day. An area with a lot of traffic usually increases the chances that someone will drop in for a bite.
  • Ease of access
    Even with highly visible signage, people will not come to your restaurant if they have a difficult time getting there. If your restaurant is located on a section of road with no easy left-turn into the lot, for instance, people may not feel compelled to go out of their way or make U-turns to eat there. One way to combat poor accessibility is with specific directional signage or easy-to-read marketing materials to help direct customers to your location.
  • Parking
    People tend to get frustrated with restaurants that offer limited or no parking spaces. While ideally your overall concept and food will outweigh any negatives about parking, you should make it easier for guests to come and go in order to increase business. The easier parking is at your restaurant, the more likely it is people will park there. For areas with little to no parking, valet services offer an effective alternative.
  • Area zoning
    Consulting with the local Chamber of Commerce or a city planner will help you determine any important future city zoning measures that could affect your proposed location. If zoning laws for the lot you are looking at are going to be adjusted in the future, it may be prudent to look elsewhere.
  • Real estate value
    The real estate value of your location may be trending upward or downward and it helps to know what to expect. Higher property costs may involve a higher rent payment, but they may indicate a customer base with more disposable income to spend eating at your restaurant. Do your research and see what you can afford as well as what kind of business to expect.» More on Using Your Restaurant's Location

Your restaurant’s location plays a leading role in the traffic and overall business your restaurant receives. By researching area demographics, outlining a target market, considering visibility, traffic and ease of parking, you will be well on your way to mapping out the best location for your start-up restaurant.