Assess Competition from Local Businesses
It is important to fully understand what competition there is in your local region. For a new restaurant, business competition is not just from local restaurants, but also local hotels, coffee shops and supermarkets. You also need to look at fast food takeaways, delis and the type of accommodation available for tourists and visitors.
Understanding the type of business competition you will face is a key part of writing your business plan. In order to get any sort of funding you will be expected to know your local area like the back of your hand, so this information will form a major element of your presentation to your bank manager. Not only this, but by assessing the business competition in your local area, you will have a clear picture as to the type of business that flourishes or fails. Therefore, your business analysis is not only about what type of competition there is locally now, but also what relevant businesses have tried and failed.
Location, Location, LocationThink about a town you know well, perhaps where you grew up. Isn’t there always a row of shops that always seem to be changing – one month there is a charity shop, a tanning salon and a ‘boutique’ and the next they seem to have been replaced. The people who set up the new tea room, book shop or whatever in this row never seem to be local people. This is because they haven’t seen the endless new shops on this row over the years and just know it isn’t a good place to start a new business.
If you are looking to open your restaurant in a town that you do not know well, or an area of a city that you have not lived in, make sure you are not the person ploughing all their savings into a venture that all the locals know is unlikely to succeed. Don’t underestimate how much people like to be asked their opinion. If you find premises that suit you but in an area you do not know well, ask around. See who is about there and ask them why they think the place is available. It could save you a very costly mistake.
Local RestaurantsSo now you have found a good location, have a look around the local restaurants before you sign up to a lease. If there are only tea shops and bakeries in the town, they may not be quite ready for a sushi bar, but they may lap up a French bistro. If the high street is packed with themed party places, perhaps your sedate dining experience is better elsewhere.
Local HotelsDon’t forget what competition and support you can get from local hotels – many local towns suffer because there are not enough places for people to stay, so they end up eating elsewhere, too.
See what type of accommodation is available locally as part of your business analysis. Do the hotels have restaurants? What type of reputation do they have? If three Italian restaurants have failed in your local area but there is no decent place for an anniversary meal, maybe your potential clientele prefer something a little more special than pizza and pasta. Again, ask around. Get people to tell you what they want, don’t let it throw you off course, but use it wherever possible. These people will be the first to come to your new restaurant after all, as they will feel somehow part of it.