Added: Valine Bussey - Date: 06.03.2022 20:54 - Views: 30112 - Clicks: 3200
Leasing, renting or buying a restaurant space without a plan is liking walking into a Walmart without a shopping list. Where you decide to open your restaurant is incredibly impactful: it affects your labor costs, utility bills, marketing and overhead expenses. The good news? Conduct market research. Ask restaurateurs in your area with similar concepts what kind of revenue they generate. Can you sell enough food to enough guests at a high enough price to cover all your expenses and have money left over? If you have a few consecutive slow months, or if the economy takes a turn, could you still cover rent?
Most commercial spaces lease for years at a time. Do you have savings that you could dip into in case of difficult times? Do your research and build up your savings before looking for a space for your restaurant. If your sales are suffering because of external factors like construction on your street or economic problems, your landlord might be open to renegotiation. Even at a lower price, renters would rather have steady, predictable revenue than the hassle of finding new, viable tenants.
Where do you want your restaurant to be located?
While either of those options has its pros and cons, you need to make sure that your target market either lives there or frequently visits that area. What kind of street do you want your restaurant to be on? Find a location that gives you as much visibility as your budget can afford. What other businesses are nearby? If you want to open a smoothie shop, having a gym next door will help you generate business.
However, if there are already a dozen smoothie shops in the area, yours will have a hard time standing out. Think about the surrounding competition and complementary businesses near a potential location. If there are businesses that complement yours, you can forge a strategic partnership that encourages patrons to visit each of your establishments.
Take your time to find a location that will help your business thrive. Does your target customer live in this area? Is the neighborhood densely populated? Can you rely on walk-in customers or will you need to invest more in marketing to attract customers?
Visit the neighborhood during the day and at night. Is the commercial space easy to access via public transport? Is there parking?
How much space does your restaurant need? Smaller locations do, however, present several benefits. For one, when you have less square footage of service space, you can pay more attention to your guests and deliver more intimate dining experiences.
Additionally, a smaller space means that you need to hire less service staff. Consider these factors when deciding how much space you need for your restaurant. A takeout spot can require just a pickup counter, while a cafe or full-service restaurant would need ample seating. Also, take into consideration industry guidelines for seating space per customer. For example, fast-food restaurants adhere to square feet per seatwhile fine dining establishments give their customers square feet per seat. Do you want your restaurant to double as a banquet hall or event space? Read up on tips for maximizing a small restaurant space before knocking any small commercial spaces off of your list.
Remember, the commercial space you choose has a big effect on your daily operations, your recurring expenses, and the of customers you can serve, and your food sales need to be strong enough to support those recurring expenses. To find out how much you need to sell per seat to afford a commercial space, you need to first do the following:. How much square footage you allocate to each seated guest depends on the type of establishment you want to open, but here are some general guidelines:. He wants to offer 15 square feet per person.
The commercial space can comfortably seat 48 people or 24 tables for 2. Johnny wants his restaurant to offer 2 services: one starting at pm and the other at pm. Also, consider how the condition of the restaurant affects its price. Do you dream of having an outdoor space for patio seating for your restaurant when the weather is nice? Then an outdoor space should be a must on your list. Do you want a waterfront location, or would you be fine with installing a water feature in your restaurant?
Consider which elements you can compromise on, and which ones are must-haves for your restaurant. Their goal is to get the landlord the highest rent possible and secure a big commission for in the process, not to get you, the tenant, the best deal possible. As a buyer, you ant to hide your intentions and desires from sellers. Do they maintain the property? Are the rental rates stable? Do they plan on staying for another leasing term? The things other tenants tell you can help you during your negotiations.
Oftentimes, the first offer presented to you is inflated. Many real estate agents ask for a higher first-thing so that they have more space to negotiate. Most agents fully expect you to present a counteroffer and have that possibility baked-in to their first asking price. Always try to push back on the original asking price to secure the best possible rate. Similar to how real estate agents ask for more so that they secure more during negotiations, you want to do the same thing.
Asking for two months free rent and getting it or getting noneor asking for six and getting three half of your original ask? Negotiating a lease is a process. In any case, knowledge is power. Whether you read up on leasing laws, connect with other restaurant owners to learn from their experience or reach out to an experienced restaurant consultant, actively learning about restaurant leases before diving in head first will make a difference.
In most cases, a restaurant lease is expensive. Not making the right decision the first time is even more expensive. The space you choose for your restaurant can make or break the business. There are a lot of factors that go into making a commercial space the right space for your restaurant. Here are the key considerations you need to think about before leasing a particular restaurant space:. Good luck! Everything your business needs to grow, delivered straight to your inbox. You are now ed up to our blog content updates. He produces content that helps retailers and restaurateurs increase sales, navigate operational challenges and improve their customer service.
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6 tips for renting small business space