The restaurant business is one of the most lucrative business propositions. However, statistics have shown that the success rate in this field is not very promising. Therefore, we see that the risk factor in setting up a restaurant business is high.
One way of offsetting the risk is by procuring the premises for the restaurant on a rental basis. Renting a space for setting up a restaurant business offers numerous benefits to the business owner.
Some of them are:
1. The restaurant can be set up at a location of the owner’s preference.
2. The investment upfront is drastically reduced. The owner can rent a space at a low investment at a prime location.
3. The businessman is not bound to the premises.
4. Since the restaurant owner saves a fair amount by renting the space, he can allocate it to further his business
The only major drawback associated with renting a restaurant space is that the restaurant owner will have to deal with rent hikes.
Once the owner has decided to procure a space he should carefully decide on a suitable location.
The criteria for location are:
1. Target market
The entrepreneur should locate his restaurant such that it is easily accessible to its clients. The clients could be office-goers in which case the location should be a business area. On the other hand, a fast food joint will look to locate it in a high foot traffic area.
2. Ample Parking
This is usually required when a restaurant provides elaborate meal services to its clients. Clients will visit such restaurants to spend time in a relaxed manner.
The restaurant should be located such that it is clearly visible to the passers-by. It is a good idea to have the name displayed in a prominent manner.
4. Area of the premises
The entrepreneur should procure the premises where he can set up all activities of his restaurant comfortably.
5. Budget allocated for the procurement of the premises
This is a very important factor while deciding on the space. The businessman should be clear about the amount he will spend on the rent/ purchase of the premises.
6. Performance of other businesses in the vicinity
The entrepreneur can plan his business strategy based on the performance of other restaurants in the vicinity. He should also evaluate the competition in the preferred location of business.
The needs of a restaurant owner, however, cannot be generalized. Each enterprise will have its own unique requirements. It is up to the businessman to evaluate the premises against the criteria mentioned above and select a space.