Tips for Choosing the Best Real Estate for Restaurants
You've probably heard the saying: “Location, location, location.” This means where a business is, can make it succeed or not, and it's super important for restaurants. Even if a restaurant has amazing food, great staff, and a good strategy, it might not do well if it's in the wrong place.
When people want to start a new restaurant, they often look for investors to help them. To do this, they create a restaurant business plan that includes everything from financials, target markets, competition, food niches, and more. However, experienced investors also look into the restaurant location to see if it's a good choice.
Here are some tips from Terra Alma’s business advisors in Atlanta to choose the best real estate for your restaurant.
1. Identify the Surroundings
Before finding the perfect spot for your new restaurant, first, figure out which neighborhood is best. Usually, you won't decide on the exact place for your restaurant until investors agree to help with money.
To get the right investors and set up your restaurant for success, pick a neighborhood based on who your target market is, what the area is like, and who your competition is.
Identify Your Target Market
To find the best location for your restaurant, start by figuring out who your ideal customer is. Imagine the kind of person you want to attract and create a detailed ideal client persona (ICP). Think about:
What is their age group?
Do they live alone, with roommates, or with family or a partner?
How much do they earn on average?
What kind of job do they have?
What do they like to spend their money on?
What do they do for fun?
The goal is to have a clear picture of who you want to attract and who will become your most loyal customers.
Market Conditions
When you're thinking about the location of your restaurant, make sure the neighborhood matches the kind of customers you want to attract. Look at things like who lives there, how the economy is doing, predictions for the future, how many people pass by (including foot traffic), and what other interesting places are nearby.
This helps you figure out if your restaurant will do well there. If the neighborhood doesn't match what you're aiming for, it might be better to find a different location.
Competition
Competition is really important when picking the right neighborhood. Look at what kinds of restaurants are already there. Do they have similar ideas to yours? How are they doing? What makes your idea different?
If other similar restaurants haven't done well in the neighborhood, why do you think yours will be different? If there are lots of other restaurants around, what makes your idea better than theirs?
2. Choose the Location
When you find a neighborhood that matches your idea and ideal customers, the next step is picking the exact spot for your new business. Remember, this might not happen quickly.
Some restaurant owners take years to find the perfect place. When searching for restaurant real estate to buy or rent, consider these things.
Size and Capacity
Choose a building size that matches your idea for the business. A space might seem big enough, but once you add tables and customers, it can change. Don't just guess. Take the time to think about everything and everyone who will be in the space.
Select a site based on how many people you plan to seat and how you want the restaurant to operate. If you're having a bar and a dining area, make sure the space is big enough for both.
In the kitchen, plan for staff, ingredients, and all the restaurant equipment you need. Drawing detailed floor plans can help you see how the property will work and what to expect.
Visibility
When you're a new business in town, being seen is important. You want people to know your restaurant is there and open. Make sure your restaurant signage is easy to see from the street or sidewalk for drivers and people walking by.
Previous Tenants
You might want to check who was in the place before. How long did they stay, and why did they leave? If many restaurants didn't make it in the same spot, try to figure out why.
If you can, talk to the old tenants to hear about their time in the area and deal with the landlord if you're renting. Unless you find a big problem with the place or the landlord—or if you're superstitious—don't give up on it just because another business didn't work out.
If the old businesses were restaurants, think about how your idea might be better for the place than theirs.
What to Check in Listings for Restaurant Real Estate?
When you're looking at listings for restaurant real estate, it's important to figure out what's real and what's not. If you can, get help from a real estate advisor (like Terra Alma) who knows their stuff. Once you find a property that fits what you need and wants, ask the seller for pictures and videos.
These can help you see if the space is right for your restaurant idea. If it still looks good, make time to go see it in person. You need to know how the place looks and feels before agreeing to anything on paper.
Also, decide if you want to rent or buy the restaurant space. Renting means you have a lease and pay your landlord every month. Buying means, you have a mortgage on the property.
Need Assistance?
Finding an ideal location for your restaurant can be overwhelming especially if you are unaware of the real estate complexities. But don’t let this fear hold you back, our professional real estate advisors at Terra Alma are here to help you achieve your goal.