Tag Archives: Restaurant

Restaurant

Choosing the Perfect Restaurant Location

Choosing the absolute perfect restaurant location, both inside and out, is perhaps one of the most important decisions you will ever make during this earliest stage of owning a business. Your restaurant’s physical locale can often mean the difference between staying in business and becoming yet another dire statistic in this ever competitive industry.

There are several varying factors to consider when it comes to choosing a restaurant location such as determining the prospective area’s population base. Instead of taking the route of a costly site survey the way a large corporation or chain would, take advantage of the free information available to determine a site’s surrounding population count.

Besides public reports by local governments concerning things like unemployment rates or obtaining information from the U.S. Small Business Administration (SBA), also check census reports, which are done every ten years, and look at housing values before deciding on one particular location over another.

Is the unemployment rate in the area more than four percent? What are houses and commercial properties selling for and what is the general state of the real estate industry in the area? Are there too many sellers but not enough buyers? If so, this could be a clear indicator you should keep looking elsewhere before setting up shop. Also ask yourself what type of attractions, businesses, and institutions are nearby that will help to bring potential customers into your establishment.

Restaurant location is far more than determining the population or population growth of an area as it’s imperative to learn of the surrounding competition and, hopefully, many possible allies that will help to bring about reciprocal business.

If your restaurant is located near several other establishments of differing venues, will there be ample parking to accommodate your guests? People will not want to walk half a mile before reaching their car after dining out, so a nearby, well-lit, and easily accessible parking is a convenience you will definitely want to incorporate into your business. If you won’t be able to have your own lot, ensure there’s one somewhere close for the public to use.

When choosing the ideal restaurant location you’ll also want to consider the matters of accessibility and visibility. Have you ever noticed that there are a plethora of major restaurant chains located just near the exits of major highways, freeways, and thoroughfares? There’s a logical reason for this as more traffic means more customers and the most successful of new restaurants tend to be those that are easy to get to and easy to find.

Securing your restaurant location is a vital step that should be done even before writing business plans, applying for loans, creating menus, and definitely before advertising for customers as this first move is the one that’s most crucial to your new establishment’s success.

Restaurant

Tips on Leasing a Restaurant

Leasing property in a major market can be a daunting task for the inexperienced restaurant owner. Here’s everything you need to know to present your offer in a way to get serious consideration from landlords who see multiple submissions for the best space. Start and end your negotiations with the landlord on the best foot by treating this as a serious business deal.

Lending covenants or other restrictions on landlords often dictate the mandatory materials he needs to consider any new tenant. This can be for a new lease or even a transfer of an existing one. By understanding the requirements early in the game and presenting a well organized and complete package, your application moves to the top of the list, important in competitive bidding major markets. Once the landlord has a package, he will meet with the proposed tenant and generally not before. The best spaces move quickly and often restaurant brokers have relationships with landlords that give them the first look at new restaurants for lease in the market.

Using a restaurant broker that has established a rapport with the landlord increases your chance of success. Since the landlord isn’t meeting directly with you as the tenant, he’s relying on the expertise of the restaurant broker to communicate information about your concept and you personally. That’s important when the developer is weighing multiple offers or considering tenants that do not have as strong a credit position. Locations that are in demand are typically managed by firms who are very experienced in conducting background reviews and credit quality reviews on would-be tenants.

You can indicate a lack of sophistication or inexperience on the part of your broker if your package is incomplete or missing elements. For big landlords, this can be a deal breaker when there are competing packages though less established or single unit operators are more forgiving. Anyone leasing a restaurant should get a full list of requirements from the broker.

Be prepared to produce any or all of the following items. The most important item is your financial statement. This should be accurate and dated within the last 30 days. Landlords will want credit checks so be prepared to give them approval to pull your credit. Often they will want two years of federal income tax returns. Most of this is a required need to have not a nice to have. The landlord is looking for three things: cash on hand to operate, assets sufficient to secure the lease and history of paying bills on time. In addition, they want to understand how you will operate in their restaurant for lease so provide a copy of your menu and outline of your business.

The actual discussions on lease terms begin after the full package is submitted. If you have a powerful package and strong financial results you’ll have more negotiating room in the lease terms. If there are lots of people vying for the same space and your broker submits the best package on your behalf, you’ll win out. Weak credit or insufficient cash positions can be overcome in multiple ways. A strong restaurant broker can offer you suggestions to overcome or secure the landlord’s risk on these elements.