- Location. The location of your restaurant is almost as important as the quality of the food. Questions that you should ask yourself: What's the population of the city? What's the foot traffic like? What other eateries are in the area? What modes of public transportation can bring people to that location? The most successful restaurants have a population of 40,000 people within a three-mile radius of the eatery. If there are no people nearby, you probably should find a new location. The location also dictates what kind of staff you will have; they will come from the population of people who live near the restaurant.
- Clientele. What sort of people do you want to come to your restaurant? Families? Older crowds? College students? To succeed, most restaurants need a base of regulars who eat at the restaurant often. You've got to have a plan for how you will get the word out and how you will build the customer base.
- Menu. Once you have your location, look around the neighborhood before you decide on the menu. What choices do people have there? If there are already 12 burger joints, you shouldn't open another one. Your menu should make people excited about choosing your restaurant. If you're serving the same food that everyone else is serving, they won't be interested in dining with you. The menu also depends on the clientele you hope to attract. If you want to serve foie gras, lobster, and caviar, you've got to attract an affluent customer.
- The city's laws. Each city's government rules dictate a lot of things and each city has a different set of laws. For example, in San Francisco, it's very hard to get a liquor license, but in Napa, they are more relaxed about giving out licenses. Permits aren't just required for the type of alcohol you want to serve, they're also necessary for things like outdoor seating. The city's laws will also control the hours of operation.
- Lease. Chances are, you probably won't own the building where the restaurant is located. Since the lease is the biggest fixed cost of your restaurant, it's essential to find a lease that you can afford. How many years is the lease for? Will you be able to pay it? Look for a strong deal that works for both parties, the renter and the landlord.
- The risk. Opening a restaurant is an extremely risky endeavor. It's like rolling the dice in a casino. You don't know what will happen and restaurant closure rates are high. If you can't afford to take the risk, don't open a restaurant.
Have you ever thought about opening a restaurant?