So you’ve been thinking through a new restaurant or bar concept, and you think you’re ready to take the next step, but then you have to find the right space for it. It can be challenging to find the perfect spot for a new concept. If you don’t have a specific area in mind, many factors go into finding a restaurant space for sale or lease that is just right for you.
Here are some factors to help narrow down your search and find a location that will set you up for success. We’ve done this a time or two (or a couple of hundred times, actually). You’ll also want to consider locations in terms of parking, visibility from major highways, foot traffic,
Does the Location Fit Your Audience & Is it Accessible?
They don’t say “location, location, location,” for nothing; location is one of the top considerations in opening a bar or restaurant. Some people know exactly what neighborhood they want to be in, which limits the choices of spaces you can find.
However, some people are more open to different locations. The neighborhood and demographics must fit with the concept you want to open. Aside from that, there are other factors that make an area desirable or not.
Restaurant Location Considerations
- Highway frontage
- Foot traffic
- Parking/ accessibility to parking
- Signage
- Nearby population, demographics, household income, etc.
What Size Do You Need for Your Concept?
Having the right size location for your new restaurant concept is very important. Are you looking to do mostly take out and delivery? In this case, you don’t need many/ if any seats. Do you need a big bar and an event room to make your concept work? You’ll need much more square footage.
More space requires more overhead but it also offers more potential for revenue if things are working correctly. It can be helpful to see how much revenue a current establishment is making for the square footage, but it’s also important to realize that you’ll bring your ideas and skills to a business and hopefully improve revenue.
What Other Competition is in the Area?
You probably don’t want to open a pizza shop in a plaza where one already exists. But if you’re the only of a certain kind of restaurant in an area, that can be a real boost for your business. An analysis of the local competition and their pricing is essential to understand where your restaurant will fit in the area.
Competition doesn’t mean you can’t succeed, however! Just make sure you take into consideration how you’ll differentiate from competition to bring in customers.
What Equipment is Included and What Would You Need Change?
Most restaurant spaces have furniture, fixtures, and equipment already in place that you can purchase. Often they are included in the sale of the location. But that equipment varies from location to location so it’s important to see what will be usable for you and what changes you’ll have to make.
Here are some of the changes, and costs, you’ll need to consider making to a space.
- Kitchen size, hood system, and specialized equipment
- Decor/ cosmetic changes
- Does the space have a liquor license and will you need one?
- Storage
- Repairs/ updates
Some upgrades, like simple cosmetic changes, can be very affordable, but others might be larger budget considerations.
Does the Space Fit Your Budget and How Will You Fund It?
Financing restaurant deals sometimes takes some creativity. Below are just some of the ways our clients have financed their restaurant locations. We aren’t bankers, and this isn’t financial advice, but these are a few things we’ve seen in our 30+ years of experience.
Restaurant Financing Options
- Small Business Administration Loan
- Conventional Bank Loan
- Funding Partners/ backers
- Personal loans from friends or family
- Leveraging savings or assets
- Seller financing
When trying to obtain financing for a restaurant, it can help to have experience and connections with financial institutions that do deals like this.
