Whether you’re opening your first restaurant or fifth franchise, it’s important to know what to look out for to ensure the success of your new venture. Here are some things to consider when scouting for a new restaurant location.
So your décor is great and you’re on a side of town that’s trendy and busy. Only problem? You’re tucked into a side street that sees little foot traffic. While good marketing can go a long way, generally it’s best to choose a space that’s highly visible. To determine visibility, look at foot- and car-traffic patterns. If you’re close to a playground or park but your restaurant isn’t child friendly, you won’t find a regular customer base. Determine if the majority of the people in the area and pedestrians are your target customers. If not, it’s not the right place for you. In terms of car traffic, you need to consider whether the occupants of a passing car will be able to see your restaurant in order to make a last-minute decision to stop or not.
South Africa is generally a driving nation. While other transportation means like Uber and Taxify are becoming increasingly popular, the vast majority of restaurant patrons will drive their cars to your restaurant. These patrons want safe, off-street parking or at least ample street parking. You need to consider whether your premises has enough on-site parking, or if the street outside has enough parking for your customers. In suburbs, this can also mean engaging with residents’ associations to avoid conflict down the line.
The space you rent or buy needs to fit your size requirements. You can’t serve a large restaurant at full capacity from a small kitchen. Larger spaces also reduce workplace accidents by minimising slips, trips and falls.
4. Crime rates
Look at community Facebook groups and the local newspaper for crime reports to gauge whether the area is a high crime zone or not. Customers will be dissuaded from visiting restaurants if there’s a danger they might get mugged walking to their cars, have handbags stolen from the outdoor seating area, or get smash-and-grabbed at the traffic light.
5. Competitor analysis
Do your research about which other restaurants are in the area. Are those restaurants doing well? Is there a gap in the established market for your restaurant? If there are already many similar restaurants in the area, you might not want to saturate the market. Also research your space. If it wasn’t a restaurant before, there will be added conversion costs but if it was, find out why the previous restaurant closed down.
Cost is the bottom-line consideration for any business. If the rent or purchase of the space is more than you anticipate in profit, then the location is simply not feasible. However, if you believe the location will be integral to your growth and success as a business, then you should consider the pros and cons. Some risks do pay off, but you don’t want to get to a point where you’re struggling to cover basic costs.
This feature first appeared in Full Service, the business magazine for the restaurant and catering industry. Read the full magazine.
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