Have you found the perfect spot to launch your restaurant but you’re not sure you can handle all the nearby competition?
Or do you feel you’re going to have a hard time attracting a lot of customers and good employees?
Well it’s time to consider location a top most priority!
If you are planning to start a restaurant, location might be the most important thing for a beginner. Of course you need exemplary food but you also need to make it convenient to get your product through the door, otherwise what good is delicious food if it’s so difficult to access.
Below are some reasons that prove how better location can affect your sales:
Target demography and Accessibility
Determine the type of restaurant you are planning to open and think about the kind of customers that you will attract. A target demographic or a target market, is a specified grouping of consumers that you market your products to. In simpler terms, once you have determined who you will be marketing to, you need to do some research to find out where the people who match your target market live, work, shop and like to eat.
For example, a fast food type of restaurant will be attracting customers looking for convenience. An environment that provides students and work colleagues a spot for group discussions or maybe just a place to relax and hang out together after a long day, will have an ideal location near universities, colleges and offices where there is always a lot going on.
A sit-down, casual or fine dining restaurant will attract families who like to spend some quality time together, so a nice and quiet, suburban or mostly residential place with not alot of traffic and hustle would be a perfect spot for such a restaurant.
Considering the above factors, you might end up in a good spot but then, is your restaurant accessible to your target market as well as your suppliers and employees?
If a person has to cross a four-lane highway or maybe walk five blocks from the nearest possible parking garage, they might choose to visit your more accessible competitors instead.
When looking at a restaurant location, consider the amount or accessibility of parking space, walking and driving traffic patterns to make it convenient for customers to visit your restaurant.
Be aware of any future construction or roadworks around your restaurant if you have already found an accessible location.
Being too close to competition can turn out to be a major downside. If you start your restaurant business close to competition you might have a tough time gaining popularity in the community, but it isn’t always ideal that you locate away from competitors.
Perform a competitor analysis before purchasing your location. If your restaurant is offering a competitive advantage of the lowest price or a unique cuisine, then choosing a place near your competitor could actually prove to be highly profitable.
“Quite simply, the best place to be, is as close to your biggest competitor as you can be. Foot traffic is obviously important, but landing the ‘perfect’ customer is far more crucial. By being in close proximity to your competitors, you can benefit from their marketing efforts.” says Greg Kahn, founder and CEO of Kahn Research Group in Huntersville, North Carolina, and a behavioral research veteran who did location research for Arby’s, Buffets Inc., Home Depot, Subway and others.
Your competitors have opted for these locations based on the ideal demographics of that particular area and their popularity implies that they have probably also devoted huge portions of their advertising budget towards driving customers to their locations. You can actually end up saving the money that they have already spent for you.
Once you have started well, continue to look for what competitors are doing that you can capitalize from, and also keep a track of all new restaurants with the same target demographics that move in your area.
Funding, Purchasing, Rates, Rents, Labour Costs and Transport
Being aware of business rates, local pay rates, land and property rents before choosing a location has to be a priority. You might even get a reduction in business rates for a limited period of time and also a grant or loan assistance for specific investments.
Understand what you will have to pay for the property you want and also your employees. Research well and take advantage of all that is available.
Labor costs often make up the biggest portion in a budget. The amount of pay your employees expect to make, the minimum wage of that area as well as the availability of potential employees changes on the basis of geography and demographics. Contemplate on minimum wage, expected salaries, and where your workers will be coming from, when deciding on location.
Considering all the above factors before choosing a location for your restaurant is vital to good business. The magnitude of effect that location can have on growing sales is remarkable and can prove to be an excellent way to boost your restaurant business and attract customers on a regular basis.
About the Author: Lisa Brown has been helping her readers in successful business and entrepreneurial strategies for the past 3 years. She currently works with Ekuep (http://www.ekuep.com/en/), which is the first online store in the Middle East that caters to the foodservice industry. It sells kitchen equipment, restaurant equipment, and food service equipment that are made by leading brands from all over the world. These machines and tools are trusted by all restaurant and cafe owners from across the world.