When an individual is debating between starting a new restaurant or relocating an existing one, the first thing they should consider is the location. It can be a critical factor which can decide whether the business fail or succeed. Likewise, the financial obligations and terms that the business agrees to can severely affect its profitability. If you are a first-time restauranteur looking for rentals in Yorkville, Toronto, reading this blog post will make it easier for you to decide between building a new restaurant and moving into an existing one.
Should You Buy or Lease a Property for Your Restaurant
- Building a Completely New Business
Purchasing a new property can turn into a costly affair which will require a lot of your time and attention. Restaurant owners looking to build a new structure from scratch may want to do so for one of the following reasons:
- Wanting to personalize their space which may be unrealistic in an existing location
- Difficulty in finding real estate for a restaurant
- Very specific needs that can’t be met by a standing property
There are numerous aspects of building a new restaurant that can attract people to build one from the ground up. Owners have the freedom to make the location as big and spacious as they want since they aren’t constrained with already built walls. Additionally, there are many other advantages they can enjoy, including:
- Personalization – Creating a new structure from the ground up allows the owner to personalize the space according to their specifications. They can use this opportunity to highlight their brand and put focus on the smallest elements that can help them stand out from their competition.
- Safety – Constructing a completely new structure means it will be made following the most recent building codes. This ensures that the people who work and dine at the space will be safe from any accidents.
- Low-Maintenance – A properly built restaurant won’t require much maintenance, at least for the initial several years while it’s in business. This allows the owner to save and invest in other aspects of the business and generate a good ROI.
- Efficiency – A new building can be built with energy efficient appliances and proper insulation. Additionally, it enables the owner to lay out the property in a way that is conducive to the specific workflows and processes that restaurants generally have.
- Generate Buzz – A brand new building will attract customers for the sole reason that it’s new. Locals living in the area may see the property under construction before its opening, which can act as a form of advertising for your new business.
- Moving into an Existing One
Moving your restaurant into a previously owned space can provide numerous results. However, these greatly depend on the history of the business earlier located in the property, the expectations of the locals and the requirements of the owner. Hence, before you decide to sign a lease, as an owner, you should take certain things into consideration, such as:
- Why did the previous business fail?
- Does the space hold any symbolism to the people in the community?
- What demographics are you aiming for and will your food attract them?
- What are the changes you need to make before opening your restaurant to customers?
- How old is the property and what is its condition like?
Owners thinking of taking over an existing business or property might want to do so for numerous reasons. Perhaps the most apparent way they can benefit by signing a lease could be the smaller financial investment compared to the hefty amount needed for ownership of a new property. Also, a lease could be significantly less than the mortgage you might have to pay on a new one. Even if the amount for the lease is the same as the investment in a new property, the term is shorter compared to the commitment required for loans. Some other advantages of leasing a property include:
- Built-in Client Base – A standing business will certainly have a client base. This means you won’t have to invest much in the promotions and advertising for your business.
- Character – Leasing a space means you will have a property which has been weathered with time and use, giving it character. You can incorporate certain elements into your new setup, or create something around the already standing business.
- Speed – Remodelling and renovating any property is faster than designing the whole place from scratch. This happens as there may be elements you can work around and incorporate in the new design.
However, an older building could have structural damage or maintenance issues that you should look into before signing any papers. Some problems might be looked into and fixed but some may take considerable time, affecting the opening date of the business.
It is impossible to say which is the best option for everyone as both leasing and buying a new property comes with its own set of benefits and drawbacks. However, as your business grows over time, the choice to own/build might become an option. It’s important for restauranteurs to evaluate their options and consider which opportunities offer the best financial security before making a decision. Anyone looking for rentals in Yorkville, Toronto should separate what they need from what they want and which loans they qualify for to ensure the success of their business.