To begin with I will start with the obvious, and that is “Location, location, location “
Kemah Boardwalk- Houston, TX
As simple as it may sound and as repetitive or trivial rather, the location of a restaurant is not only important because of the amount of traffic you might or may not get given any specific quadrant or street or corner, but instead it is very important because it is directly related to the food and concept you will be presenting to your potential customers...
...and also you may want to consider demographics before deciding on a certain spot.
As simple as it may sound and as repetitive or trivial rather, the location of a restaurant is not only important because of the amount of traffic you might or may not get given any specific quadrant or street or corner, but instead it is very important because it is directly related to the food and concept you will be presenting to your potential customers...
...and also you may want to consider demographics before deciding on a certain spot.
Most likely if you live in the city where you are thinking about opening your restaurant you already figured out what concept would go and in what neighborhood.
Puglia, Southern Italy
Here in Miami for example there are two different kinds of crowd, tourists and locals, each one of them with its own sub-categories but we are not going to get into that. Will you cater to locals? Will you cater to tourists? Or will you cater to both!
Beacon Hotel -South Beach, FL
Here in Miami for example there are two different kinds of crowd, tourists and locals, each one of them with its own sub-categories but we are not going to get into that. Will you cater to locals? Will you cater to tourists? Or will you cater to both!
Once you are totally ready to commit suicide find a good real estate agent that knows about this things (like me for instance)moz@avantiway.com Commercial Division Director at Avanti Way Realty in Miami, FL
Then you have to find and architect, a contractor which will recommend a person that “walks the plans” thru the different departments to obtain approval for building permits, then you need to establish your business plan (very important) and design (also very important) -
The main reason why restaurants fail in the first two years of operation is
“UNDERCAPITALIZATION”
which is a direct consequence of a poorly prepared business plan because of lack of knowledge.
Think about it, you put on your excel spreadsheet your expected dining room rotation per day times 12 months times your projected average ticket of X amount of dollar amount, and turns out that after your Grand Opening you were off by 67% and you are already riding that wave..... Plus you did not include things like insurance premium, security deposits for the landlord, pre paid rent, beer and wine license, coffee machine, etc. Turns out that there is an extra $50,000.00 that you overlooked and were not included in your business plan!!!!
Bottom line is that even If you think that you know what you’re doing, your business plan must be accurate or hire someone to do it for you- A feasibility study for any given area is in order; you cannot just go by the way you think or see that restaurants are doing in a certain neighborhood, like this one in this photo....
....that would be the dumbest financial move to make!!!
“UNDERCAPITALIZATION”
which is a direct consequence of a poorly prepared business plan because of lack of knowledge.
Think about it, you put on your excel spreadsheet your expected dining room rotation per day times 12 months times your projected average ticket of X amount of dollar amount, and turns out that after your Grand Opening you were off by 67% and you are already riding that wave..... Plus you did not include things like insurance premium, security deposits for the landlord, pre paid rent, beer and wine license, coffee machine, etc. Turns out that there is an extra $50,000.00 that you overlooked and were not included in your business plan!!!!
Bottom line is that even If you think that you know what you’re doing, your business plan must be accurate or hire someone to do it for you- A feasibility study for any given area is in order; you cannot just go by the way you think or see that restaurants are doing in a certain neighborhood, like this one in this photo....
....that would be the dumbest financial move to make!!!
Second item relates to another big issue and that is construction costs, I can only tell you what is more or less standard for my area, being Miami one of the largest metropolitan areas in the US, construction cost for a restaurant will start at around $80 per Sq.Ft. with low end finishes that is, once you start getting into high end touches like polished concrete floors, specialty lighting, sound system, etc. you will be in the $200 to $300 per Sq.Ft. range..... easily !!
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| Stephan Pyles Restaurant- Dallas, TX |
I personally think that the best deal is to find a pre-existing restaurant already built out that closed down so you don’t really have to deal with construction from the ground up but rather some remodeling to fit in your concept and everything else related to a change of name and ownership, plus lots of advertising to make people notice that it is someone else with a different concept in that same spot, I assure you it will be a lot cheaper than building one from scratch. The good thing about this scenario is that you will most likely find all the most expensive and biggest headaches already in place, such as kitchen hood, grease trap, sprinklers, chairs, bathrooms that are ADA compliant and the BAR- Plus you will not have to deal with permits, construction, building inspections, new plans, etc, etc, etc.
These are the most expensive items that I could think of in a restaurant.
These are the most expensive items that I could think of in a restaurant.
If you still need a brand new space and wish to build it from the ground up then I invite you to read PART III of this series. For now ......
Cheers !!!
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