What benchmark have you used to figure your customer base and flow???
How do you figure this out?
Cliff, estimating traffic flow almost borders on alchemy....... But it can be done!
This is the multimillion dollar secret that all the monstrous franchise places use whenever they look at new store locations, they do not rely on the "if I build it, they will come" with a little luck way of doing business. I wish I knew the formula these places uses to determine feasibility.
Here is how I did it; I took the population of my community (and surrounding), and I used percentages of that population for three different P&L spreadsheets.
At the high end, I figured 18% of the total population goes out to eat at least 2 times per month, (I used 14% for my middle ground, and I used 10% as my low-end estimate.)
Divide that number of people by the total number of pizza places in your area and that is your projected monthly traffic flow. You also need to look at your dining room capacity, and how fast you can turn your tables to determine the maximum amount of people you could serve in a day.
I made sure that I would see positive cashflow at my lowest estimates, but also prepared to handle traffic at that 18-20% figure too.
then if you see an increase in people due to being a tourist destination, you'll need to figure them in your estimates too.
you will also want to speak with owners of similar places to see if your estimates are close to what they are actually seeing. It may take a little dishonesty on your part to do this research, but knowing if the population can support your business before spending any money is always a good start. if your estimates do not show profitability, find out why and see if another location would be better.
Guys, I cannot type everything I wanted to,this forum is acting weird with my browser, it will not let me see what I am trying to type. I'll try again later