Opening a new bar or restaurant, many business owners choose the actual location early on in the process and with their hearts. But the physical location may be the single largest influence and most important investment in the success of a new restaurant or bar, so it's best to take advantage of the opportunities a good location will provide, as well as to be aware of a location's potential downsides.
Learn the important business metrics to consider for the location of a new restaurant or bar business. Understand how unseen situations and boundaries can cause serious advantages or disadvantages. To make the smartest choice of location, business owners need to always keep customers, business growth, and marketing in mind.
For the operational functionality of a new restaurant or bar, your location must work to meet a balance of expected short term and medium term goals. Consider the cost of modifying the space for larger sales volume or faster than expected business growth. Outline plans for several changes that may be made in the short or medium term. These changes should include potential alterations of product, service, or venue design. The lease cost can't overly be a burdon to the business at first, but neither can you skimp. Minimize the risk of needing to move or expand within the first year or 2, should you be so lucky. Once initial investments have been made, change can be very expensive. Especially to a restautant or bar business with moving parts, food and beverage supply lines, and recurring orders already placed. When comparing locations factor in move-in prep construction costs and construction permitting timelines, especially in historic buildings or zones.
The are often instances of people opening a bar in a small, concentrated nightlife section of the city, where there may currently only be 2-3 vacant locations available. In those cases many factors are the same for all properties (such as zoning, traffic, proximity to target market, and price per sq ft), but you'll have to both choose which location you like most, and whose negatives don't outweigh their positives.
Location Location Location. A location's viability for a business plan often comes down to how cool the neighborhood is. Or what highway is close by. But there's more than the ups and downs of a block, or how well the local sports team is doing. Marketing analysts will remind you it's all about how the target customer perceives the location, or maybe how close the target customer works. But you have to personally and analytically scope out the location for things like the competition in the neighborhood, large employers nearby and what kind they are, local magnet business like a sports team or a university. Is the sports team doing well or making big changes soon? These could all impact your business or force you to change up your operations, so they have to be used to weight your choices.
Many unseen aspects of a location can be huge benefits or hurdles, such as permitting restrictions, tax zones, or grant opportunities. A good real estate professional will know some of these details, and will even be liable for a few, but of course the ultimate responsibility falls on the business owner or the investment group's principal of project development. Some of these factors include the political environment; community improvement or organization efforts; legal restrictions, licensing and permitting; tax zones; and a variety of potential grant opportunities. Keep in mind the history of the location includes the previous businesses, as well as any known crimes, news or even widespread gossip.
Once your restaurant or bar's customers want to come to your business, they have to get there! Will it be easy to find? Consider things like what the directions will sound like, if it's easy to make a wrong turn, what constumers will pass on their way to their evening at your establishment. An ugly or smelly sight will not set the right mood for a great experience, even if it's 2 blocks away from your business. Look at the parking a location provides not only compared to your expected demand, but also in comparison to the parking offerred by the competition.
Bars and restaurants are working businesses; they have a steady flow of vendors, suppliers and crews that will need to access. Waste must be removed, deliveries must be made, and back office work must be done (unless done offsite). The right location for your business might need to accomodate a specialty type of cuisine offerrred, or the space, fixtures and wiring for custom kitchen equipment needed. You may be doing your own smoking of meat, brewing of beer, or making of bread. There are the staff and HR needs to consider as well, such as a break room, lockers and restrooms.
Big changes can mean big impact to your new business. Like if the sports team's attendence drops or a large employer goes out of business. Is the university changing student housing rules to encourage or dicourage full kitchens? Is a large road construction project starting soon just 2 blocks away? Is a new office park opening up nearby? Prepare for it by choosing a wise location, deal with it, expect more of it.
Ideally you will be able use the location itself to advertise, helping you get some free marketing return out of your lease expense. Capitalize on windows, signs, and even the building itself. Estimate how much foot traffic and car traffic passes by your potential business location. Do these passerbys fit your target dempgraphic? Might you even change your offering to maximize benefit from the foot/car traffic? Consider marketing to other businesses in the complex or minimall.
How you would be marketing locally can directly depend on what businesses are in the area. Advertising opportunities differ between a university and a footbal stadium and an office park, so consider both the expenses of marketing to the local community and the returns.
Many of the above factors can even impact the funding opportunities your new bar or restaurant business has. A local bank might be offering a discount on small business loans for businesses who are partners in a local charity or on a local event. Some credit unions offer low rates only to businesses located in specific zipcodes. There may be a federal or local grant for businesses opening in a re-development or community improvement zone, so do your research.
Understanding that the location of a new restaurant or bar is so much more than the look or the price per sq ft is just the start. Seasoned bar investors and restauranteurs know to take a wiser approach to picking out a location. Thorough research and having an ear to the ground in a neighborhood can help uncover huge advantages in a location, that will greatly improve the chance of your new business's success.
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