How to Pick the Right Location for Your Restaurant

How to Pick the Right Location for Your Restaurant

Picking the right location is essential for any business, but few are more impacted than a restaurant. And the questions for those new to the industry can be daunting. For example, will your restaurant rely on a lot of foot traffic? What does the local competition look like? Should delivery be a part of your business? Clearly, there can be a lot to consider when it comes to opening a restaurant. And few decisions will be more vital to its success than its chosen location. So how can a new restaurant ensure its location will help sustain its success?

When picking a location for a new restaurant, it is crucial to identify what will drive traffic to the business, what the local competition looks like, and how a potential location may impact cyclical costs (such as business insurance). This is in addition to more basic considerations such as what sort of niche the restaurant will fill.

So, picking the right location is clearly of the utmost importance in an industry where nearly as many restaurants will go out of business as enter the market each year. Luckily, you aren’t alone. Below you’ll find all the pertinent details that any restauranter should know when choosing a location. And while choosing the right place won’t be easy, you can think of it as a vital ingredient in your restaurant’s recipe for longstanding success.

Questions to Ask When Considering a Restaurant Location

It is impossible to anticipate everything that may pop up during a location scouting process. However, by keeping these four questions in mind, restaurateurs can help ensure that they make a reasoned and well-thought-out judgment.

• What sort of restaurant are you planning on opening?

In the grand cacophony of dining options, there is room for every sort of restaurant. From greasy-spoon diners to fine French fare, each type has its fans and detractors. And while some may see a hierarchy, others love food no matter the form. (Not everyone feels this way. Heck, just mention Guy Fieri around foodies and get ready for a verbal brouhaha.)

The important thing is to have a vision for your business. Whether it will be a humble burger joint or a glitzy theme restaurant. This concept and passion will be paramount in drawing in and sustaining a clientele.

• How will any potential location impact costs?

When scouting locations, many first-timers fail to realize that where they choose to do business can significantly impact their costs. This can include fees in areas disparate to the company, such as taxing considerations, insurance pricing, and expenses for material inputs.

For example, as noted above, a restaurant’s location can greatly affect the cost of restaurant liability insurance. Good insurance is a prerequisite for protecting any business’s investment. Restaurant liability insurance will typically be tailored to the needs of the industry. This can include essential coverage such as workers’ compensation, property insurance, and general liability.

Such insurance is impacted by factors such as the size of your location, the number of employees, any policy limits, and claims history; one of the most critical factors will still be where the café is physically located. Just consider how a coffee shop in Fresno, CA, will have a much different insurance cost compared to a similar store in Ames, IA, for a good illustration.

• What is the competition like in the area?

Don’t be afraid of quality competition in an area you like for a restaurant location. Many successful restaurants are often found grouped together and can help draw customers as part of a vibrant commercial district.

What is important to look out for is too much competition. It can be tricky to tell if you may be oversaturating an area. However, if you are opening a taqueria in an area that already has three, maybe consider a less competitive location for a taco stand.

• What will draw customers to your restaurant?

Finally, there is the basic idea of what will draw customers to the area. Is there a nearby theater or stadium? Could an office park provide ample amounts of patrons for a lunchtime rush and after-work happy hour? These are good questions to ask when taking a long-term view. Simply identify what will drive your business’s growth for each location you consider and rank them in terms of viability for a measure of durable success.

• Where will your customers leave their vehicles?

Having ample parking space at a restaurant is essential for ensuring a pleasant dining experience for customers. It provides a secure and convenient place for customers to park their cars, eliminating the need to search for street parking or walk long distances. Additionally, having space for cars can offer the opportunity for unique services, such as curbside pickup or drive-through options (learn more about drive-through technology). This can also enable customers to shop from the comfort of their vehicles, making it a convenient and efficient option for those who are on the go or have limited mobility. Overall, having parking space and car shopping options can greatly enhance a restaurant's accessibility and customer satisfaction.

How to Scout Potential Restaurant Locations

There is a lot that needs to go into scouting potential restaurant locations. And as will be seen below, much of the initial legwork can now be done online. However, most business owners will still want to put their eyes on location in person before committing. And making a site visit is always a good idea. (It will allow business owners to get a feel for the area and how their vision for a restaurant might mesh with it.) This may require more than one visit, and each visit may take a substantial amount of time. The process may be tedious, yet this is always time well spent.

In short, don’t just stop by a potential location on a Friday night and consider the job done. You’ll need to get a good idea of what the neighborhood is like on a Tuesday for lunch and a Sunday for brunch. Park the car and walk around. Visit other local businesses, even non-restaurant, and inquire how they find the area and the local business climate. (Remember, these may be your future business neighbors, so it is never too early to make contacts.)

Scrutinize the Data

One of the biggest advantages business owners have these days is access to a wide variety of high-quality data that can reveal a lot about a potential location and its consumer base. And there is no need to hire some overpriced consultants to undertake a time-consuming and expensive market survey. Often enough, this sort of data is already readily available from a variety of governmental or business-related sources. For example, a local chamber of commerce, business development office, or local business owners’ association can be an excellent place to start when looking for helpful info on a potential site.

Don’t Be Afraid to Follow the Leader

If you’re opening a coffee shop, you can probably guess that a community loves its java if it already has a Starbucks. This is because the chain does exhaustive research when opening a new store to help ensure its success and avoid oversaturation that previously plagued the brand. In short, you can feel good opening a restaurant if a national chain already is servicing the area. Doing so is called “following the leader,” and it can be a useful tool when selecting a restaurant location.

Be Ready to Take the Plunge

When the chips are down, being ready to seize a good opportunity when a suitable location presents itself can make all the difference in finding your restaurant’s best spot. And as anyone in the service industry can tell you, competition can be fierce. This is why it is so vital to be able to move quickly when a worthy location presents itself.

Being ready to pull the trigger on a location means doing your homework ahead of time. For example, get compile aspects such as financing and insurance together and have them in place so that any data requested by landlords is readily available. Furthermore, target areas you like, and don’t be afraid to whittle down your list of potential locations quickly and dispassionately. It may seem like a lot of work but being ready when the perfect spot presents itself is well worth the time and effort.