I was wondering what your thoughts are about a new shop opening in this current economy…I am in a business now that is related to a home luxury product that is now at the bottom of the list for many people. I have no real option but to shut it down. The neighborhood I am looking to open in has been hit very hard by the housing market. While there have been many foreclosures the homes are quickly purchased so there are very few empty houses. It is a very strong family area with an ave income of about $92,000 and a population of about 50,000 within a 5 mile radius. I recently was approached by a leasing agent about a location in another city, they are directly seeking a Pizza place to move into an existing center anchored by a large major chain grocery store. She shared with me that they felt that pizza was something that is holding up well in this economy and offers family’s a chance to still eat out but affordable…Any thoughts…?
Opening any new business is risky but in this market it has to be even moreso.
Whilst I’m luck (through hard work) to be up on last year I do know of other food places in my market who are significantly down. My take on this is that as I’m at the higher end of the market I’m seeing a lot of the people who went out to eat using me because of my quality reputation. Whereas the people who used to get cheap take away food from my competitors are also trading down and are not buying anything any take away food at the moment. I’ve also run some really aggressive value to take advantage of this situation.
Would I open a new shop in this market? Probably not. Would the bank lend to me even with my track record probably not (I keep hearing it said they are not lending to anyone).
I guess overall what I’d say is that people are spending their money ‘wisely’ (if at all) and if they choose to order food they are going for something they know will be quality. To set up a new pizza place with no reputation in my opinion increases that risk even further. But at the end of the day who knows?
I thought the same thing after opening in March 2008. My dad said there is no good or bad time to open a business. What really matters is planning and execution. If you were to open a business soon–I would make sure you have a decent advertising budget to get the word out; but the pizzas better be good or you’ll dig yourself into a hole.
Be careful of opening in a shopping centre anchored by a major retailer.
We are on the outside of such a centre and have the leading grocery chain (the store is in their top 10) anchoring the site. Rents are horrenously high vs other lower profile sites so you need a high volume / doller store to make the cut.
The only advantage I see is that the exposure you get from passing consumers to the centre, but in the same token we have had customers come in in the past 6 months saying they lived in the area for 10 years and didn’t know there was a pizza shop, subway, chinese restaurant and fish shop out where we are because they only come and go through the other entrance.
We’re trying are darnest to actually get open in this “down” economy. Yep, it will be tight but I tend to look at it the same as the “buy low sell high” mantra. Rents are vastly more negotiable than they were even a year ago in most areas. Equipment deals are sweeter, suppliers more eager for the honest sale.
If your business plan is solid, you have the capital or the financial backing this may be a great time to get in.
Or…I could just be a fool. :roll: Guess we’ll see in a couple of years!