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How To Select A Location For Your Restaurant

There is a reason that the most well-known real estate adage is “location, location, location.” Location is absolutely essential for a successful business and is one of the deciding factors in the success of a food service business. So how do restaurant entrepreneurs and operators determine the best location for them? Read on to explore our top tips for selecting a location for your restaurant.

Initial Marketing Research

The initial marketing research helps determine the general area or neighborhood that you need to be searching in. This decision is influenced by the target market and target customers who you are aiming for. For example, a sit-down restaurant for families probably belongs in the suburbs instead of downtown.

Determining Factors

There are three main factors to consider while location hunting. As frustrating as the search may be, do not give in and compromise on a location simply because it is there.

Size

The size of the potential space is a highly important factor to consider. Even smaller food service businesses, like coffee shops, need plenty of space. On the other hand, you do not want to be paying for space that you will not actually use.

Ask for some detailed floor plans of the space and sketch out potential layouts. Always make sure to remember to leave space for people and servers to walk through. Additionally, remember certain rules, such as ADA laws are in place that dictate spacing.

Visibility

Visibility is another consideration that owners and operators must make. While certain businesses can afford a little lower visibility, newer restaurants cannot. Even if the space is tucked back away from the road, something needs to signal to customers that you are there. An ideal site is in a high traffic location for both pedestrians and cars that comes with standout signage.

Previous Tenants

The history of a location tells potential renters quite a bit about the location. Ask questions about the number of tenants at a location. Then find out how long those people stayed there and why they left. If you can, talk to those ex-renters and find out from them what issues they ran into with location.

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Maximizing your Restaurant Real Estate Space

coffee shop coworking

Walk into any cafe these days and you’ll most likely be greeted by the sound of patrons tapping away at laptops, creating the next big thing.  Millennials, side-hustlers, startups and freelancers are turning trendy local coffee shops into offices. But hipster coffee spots with cold brew on tap aren’t the only places that can capitalize on this trend. Almost any restaurant can hop onboard the co-working train by partnering with sites like Kettlespace and Spacious. These sites help remote employees find coworking or meeting room space to rent in their areas.

The idea is that restaurants can rent out their space to digital nomads to generate revenue after hours or at slow times.  Employees pay a monthly membership fee to the sites and participating restaurants receive a cut of those fees.

Transforming your restaurant real estate into a co-working space isn’t just a way to bring in extra revenue- it can also be a part of your marketing mix. You may become the new favorite dinner spot among employees who discover you via the co-working networks.

If you haven’t yet leased a space for your restaurant, you may want to consider looking for features that would make your eatery an ideal co-working space. Spacious offers these guidelines for their spaces:

  • Closed for lunch
  • Gorgeous interior with natural light
  • Seating for at least 100 (ideally more)
  • Street level access

For example, if you open at 5pm for dinner, you will have a good window of time for workers to come in. It also helps to have a private dining room.

The most important features are the amount of space you have and the aesthetic appeal of your restaurant. Spacious and Kettlespace take care of the rest. The companies provide coffee, tea, snacks, and even power strips for your working patrons.

So why not make the most of your space? Sign up to become the next best co-working hotspot!

 

 

 

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Business Plans are Important When Acquiring the Right Real Estate – Here’s why!

restaurant business plan for real estate

You have a phenomenal idea for a new restaurant. You’ve perfected your recipes, designed your concept  and now you’re ready to lease the perfect space in which to make your dream a reality. But it isn’t as simple as handing over cash and signing paperwork. Landlords won’t let just any new business concept set up shop in their plazas. You have to pitch your restaurant idea to them so that they can decide whether or not it appeals to the market they are reaching and whether or not it will provide value to the retail space. The best way to pitch your concept is to formulate a business plan. It is the most widely used genre in business settings and an invaluable tool to have as an entrepreneur.

Here is a comprehensive template for creating a restaurant business plan. You can create a word document or a PowerPoint to display this information.

Concept Description

Begin by describing what it is you are offering at your restaurant – what type of food will you serve? Will it be a fast-food type of establishment, a casual sit-down eatery, or a fine dining experience?

Customer Type

Think about the demographics of the customers that shop in the plaza in which you are seeking to rent.  Why are they choosing this restaurant? (i.e. to drink and socialize…experience fine food…or unique coffee)?  What is their household income level? Their age bracket?

In addition, what will be the heaviest traffic time for customers (breakfast, happy hour, lunch, etc.)?

Sample Menu

Even if it isn’t artfully created by a graphic designer yet, provide the landlord with a rough draft of what your menu will look like so they can gain an even better understanding of the type of establishment you are opening.

Management Team Bios

Give a face to the people behind the concept. Who are they? What are their professional backgrounds? What unique skills are they bringing to your team? This will help build credibility and trust.

What type of improvements will be made to the property?

Get specific about the modifications you will be making to the building so that the landlord is aware in advance. Are you installing a grease trap and hood? Implementing an elegant interior design that requires a lot of painting, light fixtures, etc.? There may be some changes you need to make that they do not approve of, so it is best to be upfront about everything.

Market overview and why your concept will work

Do some research and find out what the market for your particular offerings looks like. Is it growing? Is there a demand? Use sites like IBISWorld, Upserve and Toast  to find the trends and market information. Then, based on your findings, explain how your concept addresses a need or gap in the market and why you have a unique value proposition that will lead your business to be successful.

Other locations?If you have a franchise or are looking to open multiple locations (or already have), mention that. If your other locations or planned locations are in close proximity to the space you are trying to lease, that may create an issue.

Business structure

Explain the hierarchy of your business. Who will be signing the paperwork? Whose name will be on the lease? What are your team members’ titles? Is it a partnership?

Financials

Where is the money coming from? What are your reserves? Do you have investors? Are you investing your own personal funds into the restaurant? Have your crowd-sourced funds? Be transparent about your financials so that the landlord knows they can trust you to keep up with your payments.

For this section, you may want to seek assistance from an accountant. Include documents such as a budget and profit and loss statement for the first five years of operation.

Your business plan doesn’t have to be a ten-page essay. Keep it simple and to the point so that the landlord knows exactly what your restaurant will be and how you will make it happen. Your business plan could be the difference between landing your dream restaurant real estate space and losing out on it.

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What You Should Know About Finding a Restaurant Space for Lease

Restaurant for lease

Let’s be honest, finding a restaurant space for lease is a rather frustrating and time-consuming process. It’s true, and as if that’s not enough, the risk of choosing the wrong location is pretty high.

You see, there’s a good reason as to why most restaurants fail and while poor decision-making is at the core, location is often the cause. In other words, the location of a restaurant is critical for success yet the importance of site selection is often a factor which many restaurant owners seem to ignore.

But what makes a good location and how can restaurant owners avoid this common mistake?

What to Consider When Searching for a Restaurant Space for Lease

Well, there are many factors which can influence the fortunes of a new business and it’s not simply a case of finding a restaurant space for lease. Budget will inevitably impact the final decision but facilities and local economy are just as important. At the same time, taking a macro view of the area is critical, for long term stability is needed for a restaurant to flourish in a new location.

For example, neighborhoods can change quickly and the truth is, even one or two miles is enough to impact the chances of success for a new business. With this in mind, many restaurant owners can end up in trouble as the location is simply a poor choice or their primary reason for choosing that location may have disappeared.

Either way, choosing the right location is critical and here are some important factors to keep in mind when searching for a restaurant space for lease:

Research and Ask the Right Questions 

As a rule, there’s no such thing as the perfect location and every area will have a diverse range of unemployment, salary and source of jobs. At the same time, you should still find that some areas are more prosperous than others and through research, you can start to ask questions that will identify locations with the most potential. For example, what type of jobs or professionals are common in the area? Is the median salary increasing or decreasing? What large factories or companies are in the area? Is the number of jobs rising or falling?

Remember to Stick to Your Plans

If you end up with a real estate broker, remember to stick to your guns. After all, most brokers are reliant on commission and so advice can be somewhat biased or less calculated than you would like. Now, that’s not to say every agent wants to take advantage but through your own due diligence, you should have criteria for this site selection and sticking to this formula is often better than simply trusting the advice of a real estate agent.

Keep Your Intention and Budget Under Wraps 

When it comes to negotiations, keep your intentions and emotions in check. For many listing agents, the main objective is to find the highest bid. For this reason, if they know your budget, you can be sure that the agent will push for the closest possible fee to this amount. On the other hand, if you remain neutral and try to conceal whatever budget you have available, you can retain more control over the initial asking price.

Avoid Repeating the Mistakes of Previous Tenants

As you know, existing infrastructure plays an important role in the site selection process. For example, when a property is already fitted with a kitchen, bathrooms and proper electrics, this can offer a ready made location for restaurant owners. However, great care should be taken with these properties and this is especially true if the property was the site of a previous restaurant.

The truth is, there is often good reason why these “burn locations” were often unsuccessful in the past. That is to say, when you find a restaurant space for lease, this may be the remnants of a previous restaurant which failed due to an ineffective location.

As you can see, site selection is critical and location is usually the most important aspect of finding a restaurant space for lease. After all, you can improve or renovate a property as much as you want but easily changing location is neither realistic, feasible or possible. Either way, take time to do your own due diligence and know that the research you put into choosing the right location for a restaurant will be a defining moment in the history of your business.

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Things To Consider When Leasing Commercial Real Estate

commercial real estate leasing tips - things to remember when you lease commercial property

Commercial Real Estate Leasing Tips

A business can rent a commercial space from a commercial building owner by signing a rental agreement called commercial real estate lease. There are three main forms of commercial leases, namely full service, net, and modified gross leases.

It is important to understand how the entire process of identifying the right commercial lease works to avoid making costly mistakes. In this guide, we discuss the steps to follow and tips on how to choose, negotiate, and sign the right commercial lease.

Set your property parameters

With numerous commercial property options in the market, you need to set some commercial property parameters to help narrow down your search. In other words, the commercial space you are looking for should satisfy your business’s specific needs. Some of the important considerations you need to make when setting parameters include:

• Ideal customer: Businesses such as restaurants that are focused on attracting physical visitors should consider locations with high foot traffic. Also, you should know where your ideal customer is located. For example, while a Michelin Star restaurant will thrive in an affluent location, a fast-casual restaurant will do well in an area with people who have a preference for fast casual dining.

• Commercial property zoning: In the world of commercial real estate, zoning is done to dictate the type of business that can operate on a particular commercial property. Meaning, as a business owner, you cannot start a retail business in an area that is zoned for industrial use.

• Desired Size: You need to determine your workforce and the expected number of customers to derive the desired square footage. For instance, a restaurant requires 15 sq ft per customer, while offices may require up to 150 sq ft per employee.

• Maximum Budget: You have to determine your maximum monthly budget. With a predetermined budget, you can limit your searches to commercial spaces you can afford.

• Accessibility: It is important to ensure your restaurant or retail business is accessible, for you to do business. In fact, such businesses may need to have ample parking space.

Find the right broker

Leasing agents and tenant brokers facilitate most commercial real estate leases by representing landlords and tenants, respectively. Typically, the leasing agent is paid a commission of around 5% of the total lease by the landlord, while tenant brokers earn a percentage of the landlord’s overall commission called tenant broker’s fee. Remember, since the tenant benefits from the commission, he or she doesn’t have to work in the best interest of the tenant necessarily.

Although it is not mandatory to hire a tenant’s broker when searching for a commercial space, he or she can help you with a list of available options, give you potential financing options, and provide accurate marketing data and pricing.

Understand the types of commercial leases

• Full-Service Lease: The lease is commonly applied in leasing office space. This is an all-inclusive rent lease, which requires the landlord or property owner to pay for any expenses that may be associated with the commercial space including, utilities, repairs, maintenance, insurance, and taxes. The lease allows you to know and prepare for well your monthly or annual lease payments.
• Net Lease: This is an agreement where you pay a lower annual rent as compared to the actual lease amount of a full-service lease. However, the landlord may require you to pay the monthly “usual costs” of the commercial space such as property taxes and insurance. The net lease can be designed to be a single, double, or triple lease.
• Modified gross lease: This is a commercial lease that is considered as a compromise of the full service and net commercial leases. For instance, you may pay for the usual costs such as insurance and taxes, but in lump sum along with your rent. However, the landlord covers the cost of janitorial services and utilities.

It is possible to get caught up in a long-term commercial lease. ROI Commercial Property Brokerage is a leading provider of unmatchable commercial real estate services. We are focused on helping businesses scale their commercial spaces up or down depending on their current needs without the risk of facing penalties.

Our team of experienced restaurant property agents maintains close relationships in the Florida local markets, and thus a great source of valuable information. So, if you are looking for commercial real estate restaurants or help with negotiating favorable lease terms consider consulting with ROI Commercial Property Brokerage.