Start & Run a Restaurant Business. Brian Cooper

time to time after your restaurant is established.

      If you discover that there are other restaurants already in the area similar to the one you plan to operate, you must consider modifying your concept to better suit a vacant niche or think about opening in another location altogether. However, you may actually benefit from your competition generating a restaurant district (or “restaurant row” as it is known in the industry). People will often travel to a restaurant row knowing that they will have a greater selection of restaurants from which to choose. All the people and activity in a destination such as this generate a “buzz,” which enhances the total entertainment/dining experience. However, the population base must be able to support the number and variety of restaurants, and there must be other demand generators nearby. Often these “rows” spring up close to supporting venues, such as the live-theater district in cities such as New York and Toronto, or near the waterfront, as in San Francisco’s wharf area. Many towns and cities have cultivated a tourist hub centering around a significant feature of that area, and restaurants are part of the draw. If you are thinking of locating your restaurant in a restaurant row, visit your potential competition to find out how busy they are.

      2.5 Industry and tourism profile

      Research and then summarize the local industries in your target marketplace and emphasize their potential to generate business in your area. You can learn about them from the local chamber of commerce, Lions Club, Rotary Club, or other service clubs in the community. Once you have opened your restaurant, you may want to join one of these organizations; with luck, you will be hosting some of their luncheon meetings. Forging good relations and networking with the local business community is a prudent thing to do. Your restaurant may be able to provide lunches for management meetings, as well as dinners and special events sponsored by these companies.

      The positive effects of tourism in your area and how it can benefit your operation should also be summarized in your study. Talking with other operators will give you a handle on how and when the tourist season influences their business. Information can also be gathered from your tourist and convention bureau or local business association. If you are going to focus on attracting the tourists, you should formulate a plan and make contacts with the bus companies or tour companies that do business in your area. Highlight the tourist segment in your marketing strategies, and include this potential revenue in your financial projections.

      2.6 Cultural, recreational, and sporting events

      Cultural, recreational, and sporting events can attract potential customers for your restaurant and should be researched when you prepare your feasibility study. Such events are known as demand generators, as they help increase the demand for food and beverages in the marketplace during specific times. If there is a town or city convention bureau or center for cultural affairs in your target area, you will be able to get information regarding numbers of people who have attended events in the past and will also be able to obtain estimates for future events.

      2.7 The real estate marketplace

      Important information can be learned from the local real estate office. They will be able to inform you of property values, home-building starts, and significant changes in the housing prices, and can give you an idea of what may be driving the marketplace. Again, your goal is to get a clear picture of your target area and begin to understand your potential customers. Commercial brokers will be able to provide information about recent business opportunities and sales in the area as well.

      3. Pre-Opening Marketing Strategy

      Once you have identified your target area and your potential customer base, your next challenge will be to create a plan to let potential customers know about your new restaurant. This will form an essential part of your business plan, and will be part of developing your marketing strategy and putting together an advertising and promotions budget.

      The focus and objective in this early stage will be to find ways to “get the word out” and tell your story — generate a buzz about the new place in town, and create hype and anticipation about your opening. You must have clearly defined your customer base in your feasibility study as this is the groundwork you will use to select methods for reaching customers. Here are some means by which you can spread the news:

      • Grand Opening “invitations” — a direct-mail piece to your target audience

      • Flyers to be distributed within your target area

      • Radio spots on selected stations, appealing to your potential customers

      • Ad with coupon incentive in local newspapers

      • Banner/signage in the window — a “dress the window” countdown to opening date

      • Media attention: Use a well-written press release to tip off local food writers about some unique aspect of your restaurant, such as your creative menu or talented chef.

      • Internet banner ad and link placed on your town or city’s website or your local newspaper’s site. Explore websites of related food and beverage businesses and advertise on their sites. Try restaurant supply companies, food and beverage vendors, professional chefs’ associations, restaurant news sites, local community colleges, and convention bureaus.

      • Invitations to potential customers in your target area to participate in “focus groups” by way of a menu tasting or sampling

      • A “joint” special promotion with one of your beer, wine, or spirit suppliers

      • Announcement in the local business association or economic development publication

      Your sales team in a restaurant is your service staff — word of mouth in the industry spreads quickly, so rely on them to pump up the opening.

      We recommend that you marshal all your ideas and then find an advertising or marketing professional to help you with the final presentation of your ideas. Such professionals can help you create the look of your ads or promotional pieces so that they reflect your restaurant’s concept and project a professional image. A graphic artist can assist you in developing a logo — a unifying image or graphic that can be used on all your communication pieces, including your business cards, letterhead, menu, and advertisements.

      This marketing information can be used in your business plan to show potential investors that you have a plan for introducing your concept. Chapter 12, “Marketing,” will focus on your ongoing marketing strategies once you have opened your restaurant.