top of page

Back House Biz $1.01 - Things To Consider In Site Selection


It's an exciting and nerve wrecking time. Your first or second location and your jumping in head first. I want to talk about a few things you might want to consider when selecting your location.

The first thing, as the old adage goes, Is Location, Location, Location. Here are a few things to consider when deciding on a prospective location. The three most important things, in my opinion, is potential for traffic, potential for being noticed, and Parking.

The first thing you want to keep in mind when selecting a site is how much potential traffic am I gonna to have passing my restaurant every day. Your real estate agent will have a good idea, but maybe spending some time in the area and doing your own investigation will be a little more unbiased. Look for big box stores in the area, if it's on a main thorough way, is it in the heart of an industrial area, or is it close to major residential. Depending what your concept is, find the spot that works best with your vision.

The final thing that is in my mind a huge factor is parking. If you are not in dense metro areas, then parking must be a factor in your decision. Downtown there is lots of foot traffic so parking is not a huge factor but anywhere in the sub burbs, it is a necessity. Let's look at White Rock; beautiful city, gorgeous beaches, but no free parking. So it makes it seasonal and special occasion only. This is why the big chains like The Keg, Milestones, and Cactus club built there restaurants away from the beach boulevard.

The second aspect to consider is How many seats in relation to your monthly lease expenses. I want to propose to you something to consider when looking at a potential site for lease. Say your monthly lease is $5,400 a month and you have a 45 seat restaurant. Your average menu item is $15. So doing some quick math you are gonna need to turn every seat over 2.7, almost 3 times a day to make it work.

Here is how the math works:

Your monthly lease is $5,400 a month. As a rule of thumb you want to keep your lease expenses no more that 10% of your monthly sales. So this means you need to do $54000 a month in sales to be on the road to the promised land. And divided by an average of 30 days in the month you need to generate $1,800 a day in sales.

$54,000 / 30 (days) = $1,800 a day in sales

$ 1,800 / 45 (seats) = $40.00 a seat every day

$ 40.00 / $15 (Avg Menu Price) = 2.66666 times to turn seat over

Now these are spitball numbers as when you are at this stage in your business there all spit ball projections. Seat turns are based on your concept, if you are fast casual you will turn seats over quicker and do a good proportion of take out business to help your sales. Casual or fine dining restaurants wont turn the seats over as fast but their average menu price will be higher so the frequency to flip the seats is not as imperative.

Now there is no magic matrix to figure out if the location you are looking at is ideal for you, but with these quick numbers to crunch you may avoid getting yourself into a situation that you will regret in the future.

Til the next time, see ya on the flip side.

Recent Posts
Archive
Search By Tags
Follow Us
    bottom of page