Opening a business of any kind can be risky, but it can also provide you with a way to earn income. While we all have the basic life necessity to eat each day, that doesn’t guarantee success in the restaurant industry. In fact, restaurants are highly competitive businesses that require a lot of work in return for tight profit margins. Before you fall in love with the idea of opening a restaurant and taking off with it, consider the following:
1. Demographics and Location.
Walking onto a college campus and visiting with professors in the business department can leave you with a feeling that location is one of the most important factors of a successful business. It is. If you’re looking to get into a quick service restaurant in a strip mall location where you would finish the interior build out of your space, the landlord should provide you with statistical data that can help you decide if the space is right for you.
A traffic counter is one way a landlord sells his spaces that are not yet leased to potential renters. Each time a car drives over the device it is counted. Usually the higher the traffic counts, the better the location, but this is not the only deciding factor on a good piece of real estate. You should take into consideration if the development is a destination spot for shoppers, or if it is merely a place where people drive by to get from one destination to another. It might be a good idea to walk away if it isn’t a destination, even if traffic counts are good.
2. Securing a Business Loan
It’s usually not possible for small business owners to buy a restaurant franchise, hire a contractor to finish out a retail space, purchase restaurant equipment, buy food inventory, hire employees, and turn on the lights without getting financing of some sort to get it all started. Long before you consider signing a lease or franchise agreement, you need to approach your bank and get information regarding a business loan. It’s better to get a business loan than it is to get a personal loan, especially if the business heads south. While it’s probably not your intention to open up shop and then declare bankruptcy, having the loan in the name of your business can help protect your assets.
3. Finding Reputable Vendors.
One of the benefits of owning a restaurant that is a franchise is the buying power that the franchisor has with vendors. They can help you with everything from preferred contractors to credit card processing companies, and the buying power of the franchise can bring you major discounts that might not be available for locally owned restaurants. The food vendors might offer higher quality products for individuals who buy a franchise.
4. Managing the Build-Out of Your Retail Space.
It’s up to you to work with your contractors to ensure construction is underway after you have determined where you want your restaurant to be. While it depends on your personality, you may want to be present during some of the major building phases. Plan on having site inspections from city officials a few times as construction is underway and before opening to the public. Your local Health Department will also have to sign off on your restaurant before you will be allowed to open for business.
5. Hiring Your Team.
A few weeks before construction is projected to be complete, you need to start hiring your team. Post jobs on local websites, the Department of Workforce Services website, and in community classifieds. Invest in printing big banner signs to display outside your restaurant that advertise your desire to hire customer oriented team members. It’s important to get the right people in place before you open so you can serve the droves of customers that will likely come through your doors.
6. Plan Your Grand Opening Event.
Having a big grand opening event is a really good way to draw customers to your restaurant. A lot of effort and careful planning should take place in the weeks and months before you open. You may want to consider offering free fountain drinks for a year to the first fifty customers who walk in. Fountain drinks cost pennies to produce, but the buzz you create in the community will help bring customers to your restaurant.
Once you’ve opened for business you need to remain focused and determined to keep increasing sales and customer satisfaction. Success in the restaurant industry doesn’t come easy, but with discipline and a lot of careful planning you can find it.
Written by Lauren Hill. Her interests include marketing for the very competitive restaruant industry and the resource partners supporting local and national restaurants.
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During the site selection process we consider and analyze many variables which contribute to a viable restaurant site within a specific trading area. Working with you and your real estate representatives, we review geo-demographic data, local economic information, site-specific variables that affect business (traffic counts, ingress, egress, parking, visibility, etc.), local traffic generators and the local competitive set to help ensure you’ve chosen the best location for your business.