Why You Should Conduct a Feasibility Study Before Starting a New Restaurant

Your dream is to own a wonderful little restaurant and serve exotic foods or home-style foods or other specialized cuisines. You know deep down in your heart that it will succeed because there is nothing else like it.  But are you willing to trust your gut feel on this, invest thousands, even 100’s of thousands of dollar, or more, without conducting a feasibility study?

Conducting a feasibility study is expensive you say? Ask yourself which is more expensive: paying a reputable company, such as TRG Restaurant Consulting to conduct a feasibility study before starting a new restaurant, or losing thousands upon thousands of dollars, perhaps even throwing you into a bankruptcy? Your famous last words just might be: If I only knew then what I know now…

A lot of people are attracted to the idea of owning/running their own restaurant, cafe, pub, or coffee shop. What those people don’t take into consideration is that, while that sounds glamorous on the surface, being a restaurateur is very stressful and extremely competitive–and not an easy industry in which anyone can succeed.

A study published in the Cornell Hospitality Quarterly, states that approximately 60% of all new restaurants fail within their first year of business. Why?  There are a number of reasons; however, with the proper guidance, you will increase your chances of success. One of the best ways to perform due diligence is by conducting a feasibility study. TRG Restaurant Consulting can help with a variety of aspects, providing you the information you will use to make informed decisions.

Here are some of the best reasons why you should conduct a feasibility study before starting a new restaurant as well as the benefits it will provide you:

Turnover: Did you know that restaurants fall into the second-highest industry for turnover, second only to technology? You will be hiring/ and firing on a regular basis. Restaurant employees are a special breed of people. Typically, they are expected to work more than 40 hours a week and don’t make much money. A feasibility study can help you determine staffing needs as well as the resources.

Important research in a feasibility study typically includes:

• Demographics
• Traffic Counts
• Marketing potential
• Competition
• Photographs
• Advertising options
• Ingress/egress

A feasibility study will uncover potential location issues/solutions

A feasibility study will identify who your neighbors are/will be as well as what was in your location of choice and why they aren’t there any longer. It will also disclose which restaurants in your area have been successful and which have failed. You will know who your landlord will be as well as any permits you will need (most permits are acquired by the contractors).

TRG Restaurant Consultants can not only conduct the feasibility study, but they also provide other related services that tie in with the study:

• New Concept Development 
  • What kind of restaurant do you plan on opening; how long do you plan to keep it?
  • What customer service culture do you wish to create
  • Discuss your vision of what you think will make your restaurant unique
  • Discuss your menu and foods tried in your area–successes & failures
• Brand
  • Identify who will be your patrons, where they currently dine now, and how to attract and retain them
• Kitchen Design
  • TRGC can help design your ordering system, an inventory tracking system, accounting & payroll system, as well as a financial management and business planning system
  • What kind of equipment will you need – where will you source it?
• Startup Consulting
  •  Are you prepared and physically able to work way more than 40-hours a week?
  •  Do you enjoy managing people?
  •  Establishing a healthy work culture that doesn’t burn out your employees
  •  Can you go without paying yourself for months?
• Business Plans
  • TRGC can help you develop a Business Plan
  • TRGC can also help you determine how many people you will need to open and run your business.

Achieving your dream of owning your own restaurant is a fantastic goal; be smart about it.  This is one of the biggest investments in your life and the truth is, they’re going to be things you have to deal with as you start, run, and grow your business. Having someone like TRG in your corner from the get-go, conducting a feasibility study, and talking to the locals in the industry can save you a lot of heartache in the future.

Bon Appetit!