Choosing Restaurant Location
The Staff of Entrepreneur Media, Inc.
– Entrepreneur Staff
Depending on how much money you have to invest in your food-service business and the particular type of business you choose, you can spend anywhere between $70,000 and $1.5 million on a facility.
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Not every food-service operation needs to be in a retail location, but for those that do depend on retail traffic, here are some factors to consider when deciding on a location:
- Anticipated sales volume. How will the location contribute to your sales volume?
- Accessibility to potential customers. Consider how easy it will be for customers to get into your business. If you are relying on strong pedestrian traffic, consider whether or not nearby businesses will generate foot traffic for you.
- The rent-paying capacity of your business. If you’ve done a sales-and-profit projection for your first year of operation, you will know approximately how much revenue you can expect to generate, and you can use that information to decide how much rent you can afford to pay.
- Restrictive ordinances. You may encounter unusually restrictive ordinances that make an otherwise strong site less than ideal, such as limitations on the hours of the day that trucks can legally load or unload.
- Traffic density. With careful examination of food traffic, you can determine the approximate sales potential of each pedestrian passing a given location. Two factors are especially important in this analysis: total pedestrian traffic during business hours and the percentage of it that is likely to patronize your food service business.
- Customer parking facilities. The site should provide convenient, adequate parking as well as easy access for customers.
- Proximity to other businesses. Neighboring businesses may influence your store’s volume, and their presence can work for you or against you.
- History of the site. Find out the recent history of each site under consideration before you make a final selection. Who were the previous tenants, and why are they no longer there?
- Terms of the lease. Be sure you understand all the details of the lease, because it’s possible that an excellent site may have unacceptable leasing terms.
- Future development. Check with the local planning board to see if anything is planned for the future that could affect your business, such as additional buildings nearby or road construction.