NEVER WITHOUT MY MARKET STUDY
Yes, it is now possible to forecast your activity, for example the number of customers and sales before the opening of your restaurant. It is also possible to anticipate a site change after a significant drop in turnover. The market and feasibility study is finally available for upmarket and mid-range restaurants. Talents & Gastronomy reveals the keys to this essential tool for running a restaurant.
THE 3-BITE MARKET STUDY:
– The market and feasibility study makes it possible to determine the potential turnover of a restaurant. Restaurateurs and investors use this tool when looking for a premises but also during the course of their activities and even when selling the business.
– During the search for premises for a restaurant, the market and feasibility study makes it possible to exclude 7 out of 10 files that would not have been profitable enough despite good advice during the visit with the real estate agent.
– The determination of potential turnover makes it possible to properly negotiate the amount of the lease before the signature (no more than 10% of potential turnover) and the goodwill at the time of sale.
If Jamie Oliver did a market study to choose his locations
On May 21, 2019, Jamie Oliver’s restaurants declared bankruptcy. Despite a very strong reputation, significant investments, the use of the best specialized architects and a perfectly executed kitchen, the English chef finds himself facing the wall. The activity of its restaurants is not sufficient to be profitable.
What if one of the world’s most famous chefs had done some serious market research… could he have prevented this debacle? Probably! There are many reasons for a receivership, but one is well known: the restaurant’s turnover is insufficient despite the talent of its operational teams (room, kitchen, back-office).
Why? Despite the reputation and talent of the English chef, his restaurants are confronted with the harsh reality: the location and the local market. Restaurants can have very beautiful interior volumes, with a beautiful view…. if they are invisible from the outside by the target clientele; it will be rarely visited. Only an intensive communication and a substantial budget will make it possible to promote these naturally invisible restaurants. Restaurants can be perfectly visible by the roadside, but if, for example, car parks are too small to accommodate customers, it will be sparsely frequented.
The chef can create superb recipes with subtle and balanced flavors, the dining room manager and the sommelier lead a dream team; if there are not many residents and employees in the area; the restaurant will be rarely visited. If the restaurant does not stand out from local competition; it will be sparsely frequented. Thus the market and feasibility study warns of these risks that the passionate restaurateur does not see, or does not want to see “following a crush”. After calculating the potential turnover of the future potential restaurants, this study eliminates the worst locations even before an opening that would be doomed to failure.
The major fast food chains understood this very quickly.
Market research and feasibility techniques have made restaurant chains successful. McDonald’s, Buffalo Grill, Pizza Hut, Brioche Dorée, Paul… all these national and international companies apply the same precept: ” no reliable feasibility study, no restaurant! ». Even with a very strong brand awareness, the risk for their investors and franchisees is significant. The catchment area* of their next restaurant may not be sufficient to exceed the financial equilibrium point. The realization of a market and feasibility study allows these companies to drastically limit the number of bankruptcy and bad investments. The advice of an experienced and knowledgeable employee looking for good locations is not enough. Market and feasibility studies reveal the inaudible, the imperceptible, the flair of restaurateurs cannot be enough.
Only 3 out of 10 restaurants open after a market study
This is the average number of restaurants that open with a market study. Indeed, the professionalism of the chef is not enough, due to the lack of a good location and good market conditions, 7 restaurants do not open.
Determining the potential turnover could have prevented top managers from closing their establishments. Until now, carrying out these studies has been difficult because it was necessary to understand and anticipate the impact of a Michelin star or a good SEO on the Internet. Xavier BARBAUX explains: “Thanks to the 400 studies carried out over the last 20 years for chain restaurants and now haute cuisine, I was able to develop a specific and unique technique to calculate the potential turnover in high-end restaurants. Our team visits the catchment area, takes the time to understand the offer of the future restaurant. We rely on numerous databases and applied techniques exclusive to Talents & Gastronomie Conseil for high-end and luxury restaurants. They were developed following an observation: the techniques used until now are not adapted to high cuisine. »
Thanks to these new proven techniques, Talents & Gastronomie Conseil has already participated in several openings in haute cuisine. Since 2016, Xavier Barbaux has been teaching these market research and feasibility techniques at the Alain Ducasse training center.
Philippe Bellissent from the starred restaurant Cobéa in Paris 14, explains us:
“What I liked about Talents & Gastronomy is their sincerity, kindness and freedom of tone. Talents & Gastronomy has always been available and has a real understanding of the world of hospitality. I would like to thank Xavier for his perfect vision and accurate analysis. All his forecasts proved to be correct! ».
DIFFERENT SITUATIONS, ONE MARKET STUDY:
– To choose your future location. You need to know the turnover achievable at this location. If the potential exceeds the breakeven point calculated by your accountant (when the turnover becomes sufficient to cover your expenses), you can confidently commit to borrowing.
– Before you sign your lease. You need to know your potential turnover to negotiate your rent and avoid committing yourself to a rent that is too high compared to your turnover. Before signing your lease, it is essential to check that the rent does not exceed 10% of your potential turnover.
– When selling your business or company. The feasibility study can allow you to highlight a potential activity that you have not exploited and that is not reflected in your turnover. Determining the potential turnover can enable you to value the price of a business.
– You work at a loss. The determination of the potential turnover, allows you to know if you can expect more customers, while giving you the keys to get there.
– You make your restaurant evolve: the menu, the decor, the service, the concept, the prices… The market and feasibility study will allow you to identify the right levers to achieve it.
– You want to start delivering but you don’t know how much you can expect.
– You want to start a complementary activity (bar, tea/coffee rooms, brunches…) but you want to know if the effort will be rewarded.
When restaurateurs, entrepreneurs, investors are confronted with one of these situations, it is necessary and reassuring to carry out a market and feasibility study.
* catchment area: geographical area from which a restaurant attracts a significant proportion of its customers. As a general rule, for a restaurant with table service, at lunchtime, customers are considered to come from an area less than 5 minutes away by foot or car around the restaurant. For dinner, the area extends to 10 minutes. The more the restaurant develops its communication (social networks, press articles, referencing in guides, Michelin stars, 50 best referencing,) the wider the catchment area becomes beyond natural distances. When the communication stops, the catchment area returns to its initial size. It is at this point that the restaurant that made the buzz may encounter difficulties.
Talents & Gastronomy Consulting accompanies YOU in your projects.
Your contact for market and feasibility studies:
Xavier BARBAUX / T : +33 (0) 6 58 01 01 22 / firstname.lastname@example.org