How to Start a Restaurant 01: Where should you open your restaurant

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How to Start a Restaurant 01: Where should you open your restaurant

This week is the first lesson in a series of post on how to start a restaurant. Every week for the next few months we are going to be discussing a different topic. Every week we will have a different topic.

How to start a restaurant

Every startup has to answer this question. Where are they going to open their restaurant? Are you going to open a traditional brick and mortar shop, food cart or a food truck? Each option has its pros and cons. Regardless of which one you're going to open they all have to find the right location for their business.

For the sake of this article, we are going to assume you are going to open a traditional brick and mortar shop.

Before you go and invest a ton of money and time into your restaurant lets spend a little time going over a few things that will make your dream a viable reality.

Here are a few things you should do before you pick a location.

Feasibility Study:

First, you are going to want to do a feasibility study of the area you are planning on opening. Opening a restaurant is expensive and you don’t want to fail within the first few years. If you have never done a study like this below are a few things that will make it easier for you to conduct your study. 

There are companies out there that you can pay to do this study for you. Unless you have an extremely big budget that might not be the way to go.

I suggest you contact your local Small Business Development Center and ask them for help. They may be willing to do it for free. To find your local SBDC click on this link. Put in your zip code and the nearest one will show up. They have done an extremely good job for me in the past. 

You may also find this post interesting as well. I recently did an interview with Laurie from the SBDC about conducting feasibility studies. Click here for the transcript of that interview. You can also find the interview on my podcast page.

The purpose of your study is to figure out if your business is going to be viable in the location you have chosen. You are going to start to hone in on your target market.

Population :

The population study will cover things like race, sex, household income just to name a few. This is one of the key parts of your study. The study of the population will tell you how the population has changed in the last 10 years. A good place to get this information is the U.S. census bureau or possibly your local chamber of commerce. It is good to know if the town is growing or shrinking and what races are located in your target area.

Household Size:

Knowing the household size around your restaurant can be very important when it comes to knowing what kind of meals they like to eat. If they are single, newly married, married with a family, or divorced. All this information will come in handy when writing your business plan. Your study can even get as detailed as what food they like to eat. What brands they buy. All this information is out there for you. 

To find out where to find this information listen to the podcast.

Household Income:

Household income will help you determine if your customers around your restaurant are wealthy enough to eat out regularly.

Competition :

Knowing how much competition helps you determine if your market is over-saturated in your area.

Town Growth:

Knowing the city or town's growth plan can be very beneficial when determining if there are new customers moving to the area to help support your restaurant growth.

Restaurant Failures in the area

Knowing if other restaurants in the area have failed recently will help determine if your restaurant is going to be successful or not.

Car Counts:

Knowing how many cars go by your possible location is a great idea as well. I talk about this in a podcast I just did recently with the owner of a local Biggby Coffee Shop. One of the things he did was sit at a busy intersection with a counter and count the number of cars that drove by in an hour.  Listen to the podcast there is a lot of useful information in there.

What they eat:

You can get information on what types of food the local population likes to eat. If they like American food and you are planning a Korean restaurant you know that this might not be the best fit for your restaurant.


Now that you know the basics to look for when doing your study it is time to get the ball rolling. Gathering all this information now will help writing your business plan go that much smoother. The business plan will help you get funding for your business and help you look at your business from a different point of view.

You may find this post about writing your restaurants business plan interesting as well.

A lot of this information can be found at your local library. Some of this information can be found on the United States census bureau’s website as well. Enjoy these early steps in your process of opening your new restaurant. Next week we are going to look at creating your unique selling point for your restaurant.

Thank you for taking the time to read this. I hope it helps you reach your goals. If you have any further questions please don't hesitate to ask. Click on the Contact page and drop me a quick message.

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