How to Pick the Right Restaurant Location - 6 Key Factors

May 18, 2023

Let’s dive into the 6 most Important location considerations when opening a restaurant. It's a critical factor that can make or break your success in the competitive culinary world. From visibility and accessibility to target market alignment and competition analysis, there's a lot to consider. We'll explore how the right location attracts customers, maximizes profitability, streamlines operations, and enhances your brand image.

So, grab a seat and join us as we uncover the key role that location plays in the thriving restaurant industry. Let's get started!

1. Restaurant Visibility & Accessibility is Key

Although obvious, this first tip must be mentioned! High visibility and accessibility are the most powerful marketing tools for a new restaurant. A high-traffic area increases your chances of attracting foot traffic and passing customers who may be enticed to try your establishment. Without this prime location you would likely have to spend marketing dollars to gain a similar level of new customers. Also, a convenient location encourages impulse or return visits.

For more tips on how to find a prime location, we really love this video from popular restaurant vlogger Wilson K Lee: How to Choose the Perfect Restaurant Location

2. Pick Your Target Diner First

First nail down your target customer before anything! In addition to being a great restaurant, being in a convenient, nearby location around your target customers is critical for success. It's naturally great marketing!

To get started, consider the demographics, preferences, and behaviors of your target audience. For example, if you're targeting a younger crowd, a location near universities or vibrant neighborhoods may be ideal. Or if you're targeting families, consider a location near or in the suburbs. Whichever path you take, make sure to write things down! And keep it simple. The most important thing is that your target market is clear to you and it is one of the main drivers for your location decision.

3. Look at the Competition and Marketplace

Assessing the competitive landscape is crucial when selecting a location! You want to avoid areas saturated with similar dining establishments that directly compete with your concept. On the other hand, being in proximity to complementary businesses, such as theaters, shopping centers, or business districts, can generate additional foot traffic and increase your restaurant's visibility. Being in the vicinity of other popular non-competitive hang-out spots could boost business! For example, your restaurant could be the go-to spot for movie date nights or Sunday family shopping runs.

4. Work Off Your Restaurant Budget

The cost of leasing or purchasing a property significantly impacts your operational expenses. It will probably be the most expensive thing on your financial statements! High-rent areas may eat into your profit margins, making it harder to achieve profitability. Conversely, a location with lower costs may offer a better return on investment. Evaluating the relationship between location costs and potential revenue is essential to ensure the financial sustainability of your restaurant.

5. Consider Infrastructure & Surrounding Amenities

Consider the infrastructure and amenities surrounding the location. Access to public transportation, parking availability, and proximity to suppliers are crucial factors that can streamline your operations and reduce logistical challenges. This will make life easier for your customers, employees, suppliers, and everyone else involved in running your business.

6. Location is Part of Your Brand

This may sound obvious, but remember that the location you choose contributes to your restaurant's brand image and identity. Different neighborhoods or areas may have specific associations or reputations that align with your concept or target market. For example, high-end restaurants should be in high-end neighborhoods.

Closing Thoughts

In summary, the location of your restaurant plays a pivotal role in its success. It impacts visibility, accessibility, target market reach, competition, costs, profitability, infrastructure, and brand image. Conducting thorough market research and analysis, understanding your target audience, and aligning your location with your restaurant's goals and concept are essential steps to maximize your chances of success in the competitive restaurant industry.

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