At one point, you’ve probably heard someone chanting “location, location, location.” Harold Samuel was the first to make that declaration in 1944 when he founded the property company Land Securities, according to ActiveCampaign. Decades later, Samuel’s saying still holds true for all kinds of businesses, including restaurants.
If you’re planning to open any type of eatery, the site you select for your sub shop or steak house could make or break your business. To lay the foundation for success, you’ll want to carefully research your options and put plenty of thought into the decision as you scout for the perfect restaurant space for rent. Here are a few tips from real estate and restaurant industry experts to help you find a suitable commercial property.
1. Set a reasonable budget.
Before hunting for restaurant space, calculate how much you expect to spend. Typically, your overall occupancy expenditures – which include property taxes, insurance and other feeds in addition to rent – shouldn’t account for more than 6 to 10 percent of your gross sales, according to Restaurant Real Estate Advisors.
2. Research the demographics of the surrounding area.
It’s vital to ensure the restaurant property you rent is in an area where your target customers live and work, according to the GloriaFood article “Restaurant Location Analysis: How to Choose the Best Restaurant Location.” For instance, you probably don’t want to open a kid-friendly family restaurant in a neighborhood inhabited mainly by childless people. The U.S. Small Business Administration serves as one source of market research and competitive analysis for businesses.
3. Look into pedestrian and vehicular traffic.
Drop by the space at various times of day to get an idea of traffic levels before you decide. Although the rent is usually higher in areas that receive plenty of traffic, you’ll have an easier time attracting customers if your restaurant is situated in a spot lots of people walk and drive past daily, according to the Lightspeed article “10 Best Practices for Picking the Perfect Restaurant Location for your QSR.”
4. Check out the competition.
You don’t want to set up shop next to a direct competitor, according to GloriaFood. Subsequently, while researching restaurant properties for rent, you’ll want to note the other types of businesses in the neighborhood. If someone’s already established in the area offering the same fare you plan to sell, it’s best to search for another spot.
On the other hand, keep an eye out for different companies that will drive business to your restaurant. For instance, if you’re opening a pizza place, a nearby bar could become a reliable source for hungry diners.
5. Evaluate the property’s accessibility.
Renting a commercial property accessible to all potential patrons will maximize your customer base and profits, so be sure to consider this factor, Lightspeed advises. Look into pedestrian friendliness, the proximity of public transport, parking, and ramps and other features that signal compliance with the Americans with Disabilities Act (ADA).
6. Watch out for high turnover rates.
We’ve all noted locations where restaurant after restaurant fails for whatever reason. Ask locals and neighboring business owners about the space to gauge the turnover rate, Lightspeed recommends. If many others have tried and fallen short of profitability at that location, it’s wise to move on to another option.
The Avalon team can assist you if you’re looking for guidance as you search for your ideal restaurant location. You can look at our property listings online for available commercial real estate in Illinois and beyond and contact our commercial realtors for expert guidance. Take the first step toward a profitable property today by calling 847-506-1000 or emailing info@avalonreal.com.