According to the National Restaurant Association, 38 to 40 percent of food dollars are spent on meals away from home. That means potentially millions of choices are being made over where and what to eat. If that whets your business appetite, you've probably dreamt of being a restaurateur. But before you decide to open a restaurant of your own, you must know who your customers are and where they're located.
Restaurateurs don't always agree on the best approach to concept development and site selection. Some restaurateurs believe you must determine your concept and market before choosing a location. For example, you may want to start an Italian restaurant, so you research the market for this type of cuisine, and then, based on what you find out, choose a general area and, ultimately, a precise location for the restaurant. Others believe finding the location is the most important task. For example, an entrepreneur may find a great building in a downtown business district, decide it's perfect for a restaurant and then determine the best concept for the location.
When it comes to restaurants, it doesn't really matter whether you research your market or your location first; what's critical is that you take the time to research both thoroughly. Here are four essential steps to get you started on the road to opening your own restaurant:
Step 1: Choose Your Concept
Restaurant patrons want to be delighted, but not necessarily surprised. If they're anticipating a family-style steakhouse but find themselves in a more formal environment with a bewildering gourmet menu, the surprise alone may keep them from enjoying the restaurant. Concepts give restaurateurs a way to let patrons know what to expect and also provide some structure for operation. Some of the more popular restaurant concepts include:
- Casual-dining restaurants: Casual-dining restaurants appeal to a wide audience, ranging from baby boomers to kids to Gen Xers to seniors, and they provide a variety of food items. Many successful casual-dining restaurants center on a theme that's incorporated into their menus and décor.
- Family-style restaurants: These establishments offer speedy service and menus appealing to a broad range of customers, from children to seniors. Family-style restaurants have prices slightly higher than those at fast-food restaurants, yet still provide table service.
- Ethnic restaurants: Ethnic restaurants enjoy a significant share of the U.S. restaurant market. Their menus typically include "Americanized" versions of ethnic dishes as well as more authentic food. The three most popular kinds of ethnic restaurants are Chinese, Italian and Mexican. Other popular types include Caribbean, English, French, German, Indian, Japanese, Korean, Mediterranean, Thai and Vietnamese. An even wider variety of ethnic restaurants can thrive in metropolitan areas with a culturally diverse population.
- Seafood: Quick-service seafood restaurants generally offer a limited range of choices, often restricted to fried fish and shrimp. Midscale and upscale restaurants offer a wider selection of seafood items, prepared in ways other than fried, including baked, broiled and grilled. Seafood can be risky, as seafood prices are always changing and many kinds of seafood are seasonal. Beware: Quality can vary tremendously.
- Steakhouses: Steakhouses are part of the midscale and upscale markets. Midscale steakhouses are typically family-oriented, offering a casual environment with meals perceived as good values. Comfort is emphasized, and Western themes are popular. Upscale steakhouses offer a more formal atmosphere and may serve larger cuts of meat of better quality than those served in midscale restaurants. Upscale establishments offer guests more privacy and focus more on adult patrons than on families.