When Opening a New Restaurant
By David Scott Peters
Location, Location, Location…
What does that mean for your restaurant?
How do you find the right location for your new restaurant? How much rent can you afford? Who do you turn to for help?
These are important questions that require serious attention when finding that perfect location for your dream restaurant.
To find the right location, you must first know the details about your potential customer, otherwise known as their demographics. Things to consider include where they live and work, or whether they are retired? You need to know how much money they make a year and what kinds of jobs they have. You also need to know whether they live in an apartment or a house, own or rent, own a car or take public transportation. Also, does race or gender play a role for your business’ success?
When looking for that perfect location, price per square foot is the major factor. Getting in over your head with real estate will start your business down the road to failure. A good rule of thumb is to try to keep your total debt service and occupancy cost down to 8 percent of sales and no more than 12 percent for a multimillion dollar business.
Once you know this critical data, you need to hire real estate professionals. You will want to make the investment in hiring both a commercial real estate broker and a real estate attorney. They each play an important role in finding and negotiating a lease or purchasing a property.
A good commercial real estate broker is going to save you time and money. He or she will ask you a series of questions about who your customer is and most importantly what kind of revenue your restaurant is projected to bring in a year.
When it’s time to negotiate a lease or buy a property, the money you invest in your attorney can be priceless. Their job is to help you navigate through the one sided leases landlords have and if you’re buying the property they make sure the appropriate environment studies have been done so that you’re not stuck with a piece of property where a restaurant can’t be built.
So before you go out looking for that perfect location, make sure you know who your customer is, what you can afford and then hire the best commercial real estate broker and attorney you can find. Don’t try to do it all yourself — leave it to the experts and focus on what you know.
David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in systems for independent restaurant owners. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit www.TheRestaurantExpert.com for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at TheRestaurantExpert.com.