 Hey guys, welcome back for another week of video. Today we're going to be talking about how to choose a perfect location for your food and beverage shop. So then that way you're going to be set up for success. So many times people have been asking me, how do you choose the perfect location for the food and beverage shop? How much should I be paying in rent? Should I be paying like, you know, $10,000 or should we be paying $2,000? Today, this video, we're going to be answering that for you. We're going to be answering all the common pitfalls to consider when choosing a location. So make sure you guys stay till the end. There's going to be a checklist for you when you go out there to search for that location. So at the end of the day, in an ideal world out there, if pricing was never an issue, we would always choose the place which is at the heart of downtown. Why is that the case? It is because it has the most traffic and in turn more potential for you to be able to convert these traffic into your customers. But in a real world out there, pricing is definitely an issue, which is a reason why we're going to be talking about the difference between a destination location and a high traffic location, the pros and the cons of both. So what is a high traffic location? A high traffic location means that there's going to be a lot of foot traffic. That means a lot of people are walking by that area. So an example of a place that has a high foot traffic would be malls, would be downtown, financial district. The pros of that is that since there's so many people walking by, it's a lot more potential for you to be able to convert these walk by traffic into your customers. Now keep in mind, I said potential because it does not equate to your customers if you don't do a good job into converting these people into your customers. And that's for another video later on. But for the sake of this video, we're going to focus on the locations that we're choosing. Now the cons side of that is that rents are usually extremely expensive because of the landlords knowing the fact that there's a lot of foot traffic, which in turn can be more potential revenue for you. On the flip side, when we're talking about destination location, that is basically a location that has minimal to no foot traffic at all. These are examples, would be like an inner street that is a little bit tucked in. We're talking about some place that you actually have to drive to. It's not really as accessible as a high traffic location. Now the pro of that is that rents are a lot more affordable in comparison to high traffic locations. And the cons would be because of the fact that you don't have a lot of foot traffic, you need to be able to drive your own traffic. You need to be able to do your own promotions. People need to know about you and people need to drive intentionally to your location and to consume at your location. So that requires a lot more friction when it comes to it. And in turn, it reflects on the rental price. To give you an example, 720 Suites is a destination location because initially we didn't want to take the risk of paying five, six thousand dollars for rent just to sell ice cream. So we chose a destination location a little bit tucked in from the main street and the rent was a lot more affordable. So even for us, if it takes a while to gain traction, we were okay with that because our risk tolerance was a little bit lower. So that's why we chose a destination location. So depending on your resources and the confidence level of your offering, you would be able to choose either a destination location or high traffic location. A lot of times we see franchises and big box shops and chains. They choose downtown locations and malls because they can afford it and because they have a proven formula. That's the difference between high traffic and destination. Now that you know the difference between high traffic locations and destination location, now it's time to choose a location that is best for you because at the end of the day, we're going to be able to choose a hybrid between these two models. I'm giving you the extreme of two cases and a lot of times locations are not as clear cut as either being a destination or high traffic because there are a lot of different elements that come into play. Some of the elements would include visibility. How visible is your shop? How visible is that location? When people drive by, can they see your location or is your shop completely tucked in and out of sight and there's no way anyone can ever see your shop? And if it's completely tucked in, that means that it is a destination location to the extreme. Sometimes there are locations where people do drive by and people do see it although not a lot of foot traffic. Other times the location would be situated at the financial district which is only busy during work hours but then after work hours no one goes there. So there are these elements that you would consider and you would bring these elements to actually go and negotiate with your landlord. Another element to consider is the crime rate. How safe would you feel if everyone around that area of your shop is taking drugs and having multiple break-ins so on and so forth? You wouldn't feel that safe and in turn that rental space would would cost a lot less because of the crime rate around that area even though it has a lot of high traffic it is not the traffic that you're looking for and in turn you can negotiate for a better rate with your landlord. Another element to consider is parking. Is there accessible parking for your location? If there's no parking spot dedicated for your restaurant then that means that is not as accessible as a place in a lot that has a lot of parking space. That itself would take away a lot of different customers. For example if you're catering to a more higher end demographic without parking spots then you would probably offer a valet which is another additional cost. So having said that is your location accessible by bus or public transit and if it is then that means that the prices would go a little bit higher as well because once again higher traffic. So all in all when you're considering a location consider these different elements to choose the perfect location that fits your needs because when it comes down to it pricing is one thing but the different elements is also things to consider when choosing your location and the last thing to consider is the community. This is something that no one talks about because no one really cares about that yet it is one of the crucial things to consider when deciding a location and what I mean by that is you need to be in a place where you feel that it serves your customer. You need to be in a community where you feel belonged. So a lot of times when I choose locations I would actually be in that location and be at the competitor's spot and see and observe how the community is coming together. When people come in do the waitress and waiters address each other by their first name because if they do then we know that these are regulars that they come back again and again. When I'm there I'm also observing whether people feel like they belong there whether they sit there for a long time or they just grab and go. Regardless of the fact you need to be within a community where you feel comfortable because you're going to be spending years in this community and if you do not spend the time to consider this really crucial factor which is your community then you're going to be stuck in a place where you don't find any joy and passion in and that really defeats the purpose of running a food and beverage shop because it's going to limit your success. So make sure you guys spend the time in the community spend the time within the area to see if it's fitting for your demographic and that is the secret that I want to share with you today. So for example when we were choosing location for our dessert shop 720 suites we were driving around the area and driving across different communities to see which one is most fitting for our demographic and in turn we were able to find a community which we really really like. Our shop is very accessible right in front of the bus station we were 10 minutes away from the university and when I was choosing that location I was just at McDonald's and I was able to see a lot of university kids just walking and strolling by the streets even though the traffic is not very not very dense but a lot of university kids are just walking around the area so this community proves to me that it is catered towards my demographic and which is the reason why we chose our first shop 720 in that location. Now that we talked about the different elements to consider when choosing your perfect location we're going to be talking about the two deadliest pitfalls that I always see people make and the first one is confirmation bias what that is is basically falling in love with a place that you've been to and you're finding all these reasons to back up and validate why this should be the place that of your choice why this is the place that's going to make it super successful and you're finding all these clues just to confirm and validate your emotions which is you falling in love with the location and you fail to see there's no visibility it's tucked into a corner out of nowhere there is not accessible at all no parking spots no public transit yet you're catering to university kids so how are they going to be able to get to this shop they're not going to be able to get the shop and thirdly you fail to see the three other ice cream shops around the area and they're all suffering these are what I call confirmation bias and a lot of people fall into this trap because they're making judgment based upon their emotions not rationally so when it comes down to choosing the perfect location always always beware of this number one deadliest pitfall which is confirmation bias now the second deadliest pitfall that I always see is that people don't negotiate for their rent it's not that they don't want to it is because that they're afraid to do so and why are they afraid it is because they're not well equipped with the education that I'm just sharing with you they're not aware of how much the surroundings are charging per square foot they're not aware of the different elements that come into place is the place accessible is the place highly visible and these are the things that you would want to bring up to your landlord after the fact that you've done your research to tell them and negotiate with them and to rationalize with them hey you know what landlord your place is charging the same as something that is comparable but you're lacking parking spots why can you charge the same can't you lower the rent because you don't provide parking spots for my guests and in turn that would lower our customer satisfaction well a lot of times they actually know about these things me acting as a landlord I can share this with you I know my shortcomings and I know when people pick on them I would be much more willing to negotiate because they know their stuff okay so when it comes down to it always always do your homework always figure out all the different elements that comes into play to negotiate with your landlord a few things that you can negotiate whether it be build out costs free rent not increasing the rent or lowering the rent these are things to consider and to negotiate for when negotiating with your landlord so these are things that you need to look out for make sure you guys always always negotiate with your landlord when choosing location because at the end of the day there really is nothing to lose so there you go I just covered the two types of location that you can choose when you're setting up for your business the first one is the high traffic location which has a lot of people walking by and the other one is the destination location which you have to drive your own traffic over we talked about the pros and the cons and the different elements to consider when you're choosing these different locations and a hybrid of them to visibility accessibility parking crime rates and lastly community these are the things that you should definitely consider when choosing a location and the two deadliest pitfalls that you must consider and try your best to avoid number one is confirmation buys never ever get emotional with a location okay there are tons of locations out there never fall in love with them use rational when deciding a location and the second deadliest pitfall is that to always always negotiate because you have nothing to lose and landlords are much more lenient when and and actually landlords know their shortcomings okay at the end of the day if you point out their shortcomings they're much more willing to negotiate in the link below download that checklist because you need this checklist when you're going out there to search for your perfect location otherwise I really hope you enjoyed this video I hope this has been a value packed video for you if you have any questions leave it in the comment section below if this has helped you leave me a comment just to support us otherwise smash the like buttons that shows me that I'm on the right track and I'm delivering value to you otherwise if you want more of these resources if you want me to dive into deeper about the step one to step a hundred about building a restaurant a successful restaurant then make sure you guys check out in the link below I've actually put in everything that I've learned to within the last five years of running my ice cream shop and turning that into an international chain all into that link okay so click in the link otherwise I'll see you guys in the next video