Even if your new restaurant offers a stellar menu, a hardworking staff and a strong business plan, without the perfect location, your dining room still might be empty come Saturday night.
For aspiring restaurateurs who are seeking the right location, look no further. NerdWallet examined U.S. Census Bureau data on 530 cities that each have a population of 50,000 or more. We found the top 10 cities to start a restaurant based on the success of local economies and demand for new restaurants in those areas.
What did we find? Everything really is bigger in Texas, especially the restaurant scene. Four cities in the Lone Star State cracked the top 10 list. No other state had more than two cities represented on the list. One feature that nearly every place on this list had in common was proximity to a major metropolitan area. Some of the best places to start a restaurant are in the suburbs of Dallas, Austin, Atlanta, San Jose and Nashville.
Some of the top cities on the list experienced big increases in population over a three-year span, such as Fishers, Ind. In one Texas city, Cedar Park, the number of restaurants doubled when the population surged over 20 percent.
In addition to a great location, successful restaurants know how to get funding to launch and grow. Finding the right business loans can be the difference between having a business that flourishes and one that shutters. Once you have financing secured, consider one of NerdWallet’s top 10 cities to start your restaurant.
Top 10 cities for starting a restaurant
|Rank||City||Median annual income in 2013||Median annual income growth 2010-2013||Restaurant sales per resident||Restaurant growth 2002-2007||Payroll as a % of revenue||Restaurant wage growth per employee|
|#1||Cedar Park, TX||$55,933||11.40%||$1,125||107.89%||25.52%||-5.85%*|
|#5||Round Rock, TX||$46,743||10.94%||$2,421||49.64%||27.72%||14.23%|
* Highest rank in this category on the top 10 list
Restaurant demand, which makes up 60 percent of the overall score, is based on seven metrics weighted at 8.6 percent each. Those metrics are population growth from 2010 to 2013, population density, percentage of residents ages 35-54, median annual income, median annual income growth, sales in restaurants per resident and number of new restaurants opened from 2002 to 2007.
Operating conditions, which make up 40 percent of the overall score, are based on three metrics, each weighted at 13.3 percent of the score. Those metrics are payroll costs as a percentage of revenue, restaurant labor cost growth per employee and median monthly housing costs.