New Restaurant Advice

Rent is usually only part of the monthly lease cost. Check to see if it is a triple net rent/lease: ie, rent + property taxes + the cost of any maintenance.

When all is said and done, that 4500.00 per month could actually be closer to 6000. to 6500. In my mind, I wouldn't take on that kind of rent, even at $4500. per month.

As to your questions, I doubt anyone can answer that for you; that is the reason you need to take the time to write a business plan. Go to the thread "Should I go Pro". In that thread I give a an answer that is more complete.

The number one reason restaurants, like the one you propose, fail so often is related to three primary factors:

1. Under capitalization. Unless you have reserve funding in the bank equal to at least six months (a year is better) worth of overhead, you run a huge risk of sinking. Restaurants are temperamental beings; business, and therefore customer receipts, will fluctuate dramatically during the year.

2. Marketing. There are two things that go together here.

First, how do you know that people want what you are thinking about doing? A lot of failures occur around the "If you open it, they will come" philosophy. You state that there are scant few restaurants in the area you want to open shop; that would make me nervous and make me wonder 'why?'

It is not good enough to ASSUME that the Mexican place is full all the time just because there are no other choices. Maybe yes, maybe no. But before I committed myself to anything, I would try and gather some objective data about what your potential customer base would want.

Second, unless people know that you exist, your restaurant will sink faster than a cement-shoe wearing mobster dropped into the nearest river. Unless you understand the differences between marketing and advertising, you will be sitting around your empty dining room wondering where the customers are. And no customers means no money to pay bills. And if you think word-of-mouth is all you need, along with ads on the radio and newspaper, then make sure you can walk away from the lease with no penalties.

3. Location. Good marketing can sometimes make-up for a bad location, but it is still an iffy bet. A good location is about traffic, visibility and accessibility.

I'm certainly not trying to be a downer. Just trying to point out some things to consider. I look forward to hearing how things go.

Best Regards,
Dave

Hi Buck,

Dave made some very good points. I have a few thoughts to add.

I would recommend compiling a business plan to really get an idea of the feasibility. You've sketched some VERY broad strokes as to what type of restaurant concept you are after. With a few more details, you may get more responses to your question. I'm thinking things like full or quick serve, how wide of a menu variety, hours of operation, liquor/no liquor, will you cater, that sort of thing. You said you would manage the place yourself, which is probably a good idea. People love to see the owner in the place! The flip side is that it can hamper your ability to focus on growing the business when you spend all of your time dealing with who called in sick or what particular saleperson wants a meeting with you or whatever. The daily operations alone are about a full time job and a half.

In regards to site selection, one thing you said threw up a bit of a red flag, but it might be nothing. I'm not familiar with the geography of your area, but you said "what used to be a small town west of Birmingham". Is this sort of a suburb of Birmingham? If so, many suburb type communities have a very thin lunch daypart, as many folks commute to work in the larger city. If you have a lot of families that just have one parent working, this can be an even larger issue, as the parent that runs the household is usually the female. The customer demographic for most BBQ places tends to run heavily on the male side. The industrial park you mentioned could be a good source of lunch guests, how many people work there? Do they have any on-site foodservice providers? Another thing to consider on the site selection topic is the shopping center itself. Is the space you're considering end-cap or middle row? What other types of shops are in the center? Do the shops already there seem to be doing a good business, and if so, who are their customers? Do the customers fit the demo you're going to be targeting?

You mentioned that the Mexican place in the area is packed, but you don't care for their food. Where I live there are some very busy Mexican places that I don't care for, but obviously many people like them. I'm kind of a mexican food guy, so I tend to be picky when it comes to finding the best, not everyone is that picky, and Mexican has a broad appeal. What I'm getting at is that you should talk to your friends and neighbors in the area who eat at the Mexican place, and find out why they eat there. Ask them about menu prices as well. Mexican food tends to be less expensive than BBQ in many cases, but if their prices are on the higher side, it may indicate that folks are willing to pay more.

When you ask questions about opening a restaurant on an internet forum, it may seem like you get a ton of negative responses, and you may view mine that way. I certainly don't intend it to sound that way. Depending on the details, for the size space you mentioned, you're probably looking at $100,000 at the minimum to God knows what for the maximum to open this thing up. That's a lot of dough, and I for one would like to know about all the potential problems before embarking a a project. The good news is that if you enter into a deal like this informed, you can lay out plans to overcome the hurdles.

Good luck, and and keep posting!

Matt

Good to see the discussions going.

I saw in another version of this thread the concept of setting up a trailer and doing concession type food. Besides the business plan you need to establish reputation and catering/concession is a great way to start without all the capital investment.

Smokin'

You must be in Woodstock! I Lived there 4 years ago and went thru after a Bama game last year...What a BIG difference. As for a BBQ resturant, I would go for it I was always having to drive to Bessemer, T-Town, or to Hover to get decent food... And as far as BBQ there really isn't any really good places (IMHO) in that part of the state.

You could open a small 20 seat or so place for under $30,000.00 Use your money wise and do as much of the work yourself or beg friends who can. 900sf space will hold kitchen bathroom and room and room for 20 seats. Much less rent this way. Then as you grow and gain cash you can expand or move to a larger location. There was MANY great points made in the replys b4 this one that stood out is many people DIVE in and then find out OOPS. Start real small then go grandiose. DO NOT sign longer than 6-12 months to start with a 3-5 yr at the end of your grace time on the lease. LEASEES CAN KILL YOUR BUSINESS AND YOU. Be wise before u sign.
Leo

i agree. the rent is too much, for a small town. with no competition, your locationwill not make that much difference. choose a building with a smaller overhead, something like a thousand a month tops! mine is only 400 a month, and its booming!