Apr 05

Opening a restaurant or cafe? Your 5-point checklist to picking a winning location

Watch any TV program about buying houses, and you can guarantee someone will talk about “location”. In fact, it’s practically a drinking game.

The site you choose for your restaurant or café can play a big part in its success.

But while location may be important when buying a house, it’s vital when setting up a new restaurant or café.

The suburb, street and even block you choose for your business can have a significant impact on its potential success. So it’s important to find out what’s happening in the area you’ve chosen—both now and in the future—because it needs to support your new restaurant for years to come.

But what should you factor in to your decision? Here are five aspects you should find out about before choosing your new restaurant or café location:

  1. Demographics
    Find out as much as you can about the area. (The Australian Bureau of Statistics can get you most of the information you need.) Is it growing or declining? Is the area (and its residents) old or young? What’s the average weekly wage for the area? After all, there’s no point opening a fine dining restaurant if none of the locals can afford to eat there.
  2. Council plans
    Talk to the local council about the area you’re looking at. Do they have any improvements or upgrades in the pipeline? Are there any planned property developments that could help your business, or major road works that might dissuade people from coming to your restaurant? How many new homes do they expect to be built in the next few years?
  3. Local business
    Do some research on what other businesses are doing in the area. Are there any major industries or significant businesses coming to town? Is the area’s main industry (e.g. mining) on the decline? What developments are taking place now, or on the horizon? Are there any major commercial projects that could draw business away from the area?
  4. Competition
    Learn about your potential competitors. Will they complement your business by bringing patrons to the area (such as what happens in Melbourne’s Lygon Street)? Or are there already too many cafes and restaurants in the area you’d have to compete with that will drive profits down? There’s no point opening an Italian restaurant if the area already has three within walking distance.
  5. Firsthand observation
    Find somewhere to sit, and just observe what goes on in the area. How much foot traffic is there? What’s the parking like? Is it noisy during the hours you want to be open? Would there be enough room for outdoor seating?

Now that you know about the area, the people who live there and the businesses that operate in it, it’s time to ask yourself some questions.

  • Do you need foot traffic for your style of business? Will people buy from you just because you’re there (e.g. it’s a takeaway shop, or inside a shopping centre)?
  • Will the location attract customers willing to travel there for the ‘experience’?
  • Do you need other businesses around you to complement what you’re trying to do? Would a nearby wine bar for pre-dinner drinks help attract the ideal client? Or will the reputation of the dining precinct draw the crowds for you?
  • Do you need a location that embodies the style of restaurant you’re trying to create?
  • Are there any council regulations that would stop you operating your business the way you want (e.g. traffic, outdoor dining, music, etc.)?
  • What hours are you allowed or expected to trade? Most shopping centres have stipulated trading hours in the lease, including public holidays. And cafes in residential areas often have restrictions on opening and closing times, which may not suit your intentions.
  • Is there a particular location that would “make” your restaurant? Something unique and hard to find that will add to the overall feel and ambience of your dining experience?

It’s also worth considering how much effort is being put into promoting the local region. My local area (Orange, NSW) has an active not-for-profit organisation set up solely to promote the region’s food and wine industry.

Brand Orange’s efforts and promotional activities in places such as Sydney’s Martin Place have put our food and wine industry firmly on the map. And they back it up with signature events such as Food Week and the Orange Wine Festival. Their efforts have created a flow-on effect to the local restaurants and cafés, with our region now a go-to destination for many visitors and travellers purely because of our food.

Choosing the right location for your restaurant or café is a major decision, and one you shouldn’t take lightly. Get it wrong, and it could end up costing you big time, whether it’s relocation expenses or lost revenue.

But get it right, and you’ll soon be drinking to your success. And you won’t need to watch TV for an excuse.