Maximize profitability with location

Good Friday afternoon!

It’s David Wennerlyn and I want to talk about how vital location is to a restaurant. It’s often said the location is the most important where a restaurant is located. Without proper research into location, restaurants have a much higher chance of failure.

Determining a location is much more than just signing a lease. Extensive research must be done to identify your potential customers, employees and your competitors.

What considerations should you be looking for in a site? I believe the four to be: 1. Customer base 2. Personnel availability 4. Site characteristics 3. Competition

We’ll be looking at the first two in this post. We’ll explore the last two in the following weeks.

Customer Base

The area in which a restaurant can draw its customers will vary greatly. It has also been shook up by the pandemic. Many people will travel a great distance to eat at a restaurant that is a local institution, whereas a lunch operation in an office building may only draw customers from an area no bigger than a city block. When evaluating the customer base, although it is important to understand the total number of people in an area, it is even more important to identify the number of potential customers. Temporary Population Potential customers include both full-time residents and the temporary population. The temporary population is made up of people who live elsewhere and visit, or work, in the area. This can be an important source of restaurant customers.

However, it is important to note the source of the temporary population. Office workers, rather than factory workers are typically a better source of customers. Check with the local chamber of commerce; most likely they can provide you with data to help you quantify the size and nature of temporary populations. The more that is known about the potential customers, the better chance there is of establishing a restaurant that will appeal to a larger audience. This can be done by analyzing census and other data available online or from the local chambers of commerce. Observation of the traffic patterns at other restaurants in the area can also help in identifying potential customers.

Personnel Availability

An owner considering an additional or new operation should ensure that there is a sufficient number of willing workers available. In many locations, this is not a major consideration since there will be many people who are willing to work in restaurants. However, in some parts of the country, restaurant workers are in very short supply. Site Characteristics Once you have determined that the area you have selected has enough potential customers to be successful; the first step is to evaluate the proposed site.

Well, that's enough to chew on this weekend. I hope you enjoy talking about restaurant success. I sure do. Give me a call if you would like to talk further.

David

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