Review where you are…
Open a restaurant today, you have to be as prepared as possible to open the door of your dream business, it is important to take a step back and review your progress. I began the series by going to “the experts,” a recommended first step on this restaurant journey. It has been said that “he who has himself as his own attorney has a fool for an advisor”. Therefore, surround yourself with experienced and seasoned advisors. Then I discussed understanding your odds and knowing the true facts about success in the business. Remember that 33% of new restaurants fail in the first year, but after three years, there is a significant increase in the opportunity for it to be running for up to 10 years. I moved onto the concept of a USP (unique selling position), and how not having one could result in diminishing sales. Finally, I discussed some vital points to keep in mind when pursuing your restaurant dream:
- Self-awareness and knowing when to act
- Risk vs Reward
- Having a legitimate detailed plan and the passion and business sense to execute it correctly
- ATTITUDE: See it…believe it… achieve it!
Let’s move forward and look at the next step to attaining your goal. In part two I briefly mentioned market research and that when it is performed effectively; it can increase your success ratio. Remember that your concept needs to meet your specific geographic and demographic needs. I once read that “it’s not the answer, but the questions which lead you to your destination.” This idea should be a factor in your research. Ask as many questions as necessary to fully understand your niche in the marketplace. In other words, if you have a concept that you believe is a potential winner, you need to be sure that the location will fit it. Consider the square footage of your proposed location, the type of service you will provide (casual, fine dining, etc.), the menu, whether or not there will be a bar, the atmosphere, and the price range when planning the execution of your concept. This will allow you to move forward in deciding on your choice location.
If The Shoe Fits
Market research is the glue that holds it all together. Let’s look at what’s involved in a good market research. This information can be found in a number of different places such as small business offices, libraries, local Chambers of Commerce, Real Estate offices and the internet. Start with finding out who lives in your geographic area. Discover both who works there and who visits. Remember that this data needs to be as up to date as possible. You can also gain some information by visiting the competition and driving around the area. When performing your research, it is important to ask the right questions to acquire a true understanding of your area. For example, ask if there a college campus nearby. This is very important for many reasons, but particularly because one of the largest consumers of draft beer and alcohol are males between the ages of twenty one and thirty. Therefore, if a college campus is nearby, selling beer would make sense and increase profit. Another example I mentioned previously was single parent households. These families will eat out more often due to busy schedules. When identifying your demographic group, include the following factors:
- Average disposable income
- Household size
- Marital status
- The proportion of homeowners and renters
- The average rent in the area, which would include apartments and condos
- The primary industries and how many people they employ. Include both the permanent (those who reside in the area) and transient (those who travel to into the area to work) population.
In closing, be diligent and remember that “Successful people do what unsuccessful people choose not to do.” Make the choice and be successful. Now is the time to open your restaurant.