Entrepreneurs or businessman should take consideration of doing a feasibility study to make a right decision of putting up a restaurant business. They should determine the probability of success. They sometimes overestimate the size of the market in their area and do not take into account the tough competition they will face from established restaurant with loyal customer.
Factors to consider when planning a new restaurant:
Studying market is one of the best effective ways to determine if the new restaurant will have enough client or customer. It includes the study of demographic characteristics such as age and income to estimate the size of potential market.
– Target Locations
Good business location most specially restaurant business includes high traffic location, large office complexes, near malls and hotels or retail centers. Make sure that your business location creates demand for your restaurant. Also, consider the lease cost or rental cost and make sure that there is parking with easy customer’s access.
Review your competition such as knowing the total number of restaurants in your target area as well as their style. Analyze their strengths and weaknesses to determine if there is a room for a new restaurant.
Be familiar with the industry by reviewing any statistical information about industry trends and growth. Consider attending meetings and talk to restaurant owners.
– Food Cost
Break down the cost of each menu and determine who will be your major supplier and ask for pricing. Study food cost projections and the prices you are going to charged.
– Management Capability
Hire restaurant manager and staff the have sufficient experience to run a restaurant. Train and motivate your staff to maintain high customer satisfaction and also so that your kitchen run smoothly.