Location, location: 5 things to consider before moving your business
In today's property market, buying or leasing a location for a restaurant can be a minefield, and can be the clincher to making or breaking your business. By Malcolm Richardson.
When looking for a location to move or start your business, having a well thought out plan of attack is a must. A successful restaurant is not only defined by the food it serves, but by many other things, including the location. A beautiful, big open plan dining area with a 100sqm kitchen floor would be a great asset to a restaurant, but it could be overpriced and excessive for your family run pizza store.
Starting from scratch with a set list of points to consider, and a pros and cons list for each property you look at is essential for finding that perfect place. It is out there, and you will find it. Focussing on some key areas of property selection will help you along the way. Asking yourself and the agent the right questions will make things flow easier, and ultimately will help you find what you are looking for.
Amongst your list of questions will be the common considerations like price, size, outgoings, inclusions and lease terms. But you should dig a little deeper and put some more detail into your questions. Some of the more important things – those that are often overlooked – can be the difference between an informed decision and a choice based purely on passion.
1. The big costs
The first question asked by most prospective tenants will be "how much?" Knowing what the real cost of a location is will involve more than just the rent. Take into account things such as lease costs, rateable outgoings, rubbish collection and service supplies – all important costs that must be factored into your location budget. Make a list of ALL costs related to the building. Speak to current or previous tenants if you can, neighbouring buildings and council or service providers. These people may give an insight into current costs, previous increases and current tenants who are not renewing their lease may even let you have a peek at their bills. It never hurts to ask. You need to carefully separate what you consider to be operating costs from location costs. Rates and taxes are commonly overlooked when negotiating a lease, and these can often add thousands to your monthly costs.
2. The other costs
In addition to lease costs, the price of getting the doors open is a major consideration. When you first plan your restaurant, make note of everything you think is needed to get you to your first service. To help with this, have a meal at an establishment similar to what you have in mind, draw inspiration and take stock of what is around you. Make notes of everything you see. While the cost of opening includes a great deal of capital equipment and hard furnishings, there are a lot of smaller items that you find yourself rushing to find (and often paying retail for) in time for your first service. Take note of things like cutlery, table decorations and even the food itself. The last minute rush for garnishes or vegies will inevitably push your profits out the door.
3. Look outside
One of the most overlooked areas of a new venue is the exterior of the building. Having a perfect dining room with a bland or sparse exterior will not do your fantastic interior any favours. First impressions never get a second chance. What people see as they approach your restaurant is what ultimately sets the tone for the diners' entire experience. A simple coat of paint, in-line with your theme, and some basic but clever signage can make a huge difference and still fall into budget requirements, but if you need to build from nothing, your budget will disappear faster than a disappointed diner. Looking closer at the facade of the building prior to buying or leasing can help you set your budget on the right track. Check the brickwork, look at power feeds to the awning or roof for signage lighting and take some measurements against your designs to ensure everything will fit.
Parking and transport will have a big impact on your diners' ability to visit your restaurant. Close proximity to adequate parking is not only a council requirement in most areas, but imperative for successful patronage at your restaurant. As a general guide, consider one car space per table of service. If you are using public parking, or have a remote carpark, ensure your advertising plans include information for parking. If you have little or no parking, walk the neighbourhood to find suitable areas for parking, keeping in mind that your patrons may be leaving late at night. If public transport is an option, is there a safe, well-lit route to the closest stops? You may have a great location but if the parking is not up to standard or you can't access it by public transport, your booking sheet is going to struggle, particularly for families. While there are many other factors to take into account that may seem more important or pressing, just remember that if they can't find or get to you, they are not coming!
5. Don't be afraid to get help
Not to talk up my business, but consultants are out there for a reason. Having a professional look over a property or set of properties and reporting on a wide variety of aspects can prove more valuable than the cost of the service. A building inspector can give you a solid report on the structure of the property and a plumbing inspector can look at your pipes, but a consultant draws on skills and experience from many professions and will seek a world of information to compile a report on the property. With this in mind however, look for a consultant with credentials and experience. A serious consultant will give you a solid quote, including all the relevant services, and offer a contract to back their work. Map out the project with your business partners and discuss it in depth with a few consultants and ask a lot of questions of them. Choosing a suitable consultant can be almost as tricky as the location itself, and can be fraught with just as many minefields.
If you are moving an existing venue, have a long look at whether the move will make the difference you hope it will. The excitement of a fresh, new location can very quickly become the thorn in your side if your expectations are too high. In almost every case, established operations that are moving sites have a better grasp of all aspects of the business than that of a new venture. You have financials, you know what it costs to operate your style of venue and you (hopefully) have a stable base of diners. Discuss with them your thoughts, get some real public feedback, and plug it all into your plan. The staff you have now also need to be considered, in particular their availability if the new venue is further away. All of these factors should influence your choice, but given your already well established business, the stakes are much higher.
On the other hand, opening a new restaurant can be an incredible experience and one you will remember your entire life. However, without all the right information, it can be a real nightmare. Take your time and plan everything. A successful restaurant takes a lot of hard work – try it without a plan and it is a whole lot harder. Set yourself a budget, research and plan every aspect of your opening and ongoing operations. Get plenty of sleep, think with a clear head and never make decisions or commitments based purely on passion. Your love for a location could be the worst thing it has going for it.
Malcolm Richardson is senior consultant at Hospitality Consultants Australia.