|The Cross at Kenilworth which we recently refurbished|
Sunday, 6 October 2013
Setting up a restaurant - striking a deal on your restaurant site
When asked what’s important when finding a new restaurant site, most people would answer with the three ‘Ps’ - position, position, position. However, I have a slightly different take...
If you’re offering great quality food and service and good value for money, people will travel to you. For me, the most important consideration is whether the property fits within a prudent and conservative business plan. Ask yourself, ‘Is there a way out?’, ‘Can it be redeveloped for anything else?’ and most of all, ‘Can you make money out of the deal?’.
Always stick to your guns when choosing a site, it might be a fantastic location but if the rent is sky-high then you’re going to struggle to make a profit. Running a business is hard enough, without you being burdened by huge rent or a high mortgage. There are some great deals to be had in commercial property at the moment and you’ll be surprised by what you can afford. However, if it’s your first purchase then it’s likely that the vendor will have more experience than you and you’re not going to out-fox an old pro, even in this market. Call in the advice of friends and family and remember the building is not the be-all and end-all. If it doesn’t work out, then move on to the next one.
My most recent purchase is The Cross at Kenilworth, where I know the area well and I could see its potential as a business. For me, it ticked all the boxes; it was an existing restaurant in a good catchment area, had a lovely big garden and was at the right side of town for what we wanted to do. At the moment, there aren’t any other businesses in the area offering the same style and level of food and service that we’ll be providing so the timing was good too. Let’s hope that I’m proven right.
My first restaurant was a different story, I had my heart set on an old bakery in Kenilworth, however for various, mostly practical, reasons it didn’t work out and when we realised that it wasn’t going to happen we bought Simpsons in Kenilworth. The rest is history but at this early stage in my restaurant career, I learnt that you’ve got to make these decisions with your head, not your heart. Making a bad property purchase early on in your career isn’t the end of the world but it will make your next deal more difficult.
When opening a restaurant, it’s fine to put your heart, soul and passion into fantastic food, quality drinks and warm service but make sure you use your head for all the business and financial decisions. If you’re confident that you have a bargain then you’ve made a good start. However, remember, you don’t need to have the best of everything. As I’ll highlight in my next blog, getting a restaurant up and running will require a good number of compromises.