While opening a restaurant is no doubt a risky business proposition, you can improve your odds slightly based on location, location, location. Lending Tree offers some advice that “While traditional foodie destinations like New York and San Francisco are saturated with restaurants, up-and-comers have room to grow.”
According to Lending Tree’s analysis, the top three best cities in which to open a restaurant right now are Milwaukee, Cincinnati, and Minneapolis. To calculate its findings, LT looked at a number of factors including average estimated annual revenue (factoring in expenses like rent and labor); estimated payroll costs per employee; number of existing restaurants per 100,000 households with incomes of $50,000 or more, which spend the most on eating out; and number of restaurants per 100,000 residents aged 35-54, another restaurant-friendly population.
With these criteria in mind, Lending Tree points out that Milwaukee has a low number of restaurants per capita, with a limited selection of available food industry professionals. Cincinnati has a number of restaurants, but many are chain establishments. And Minneapolis has seen many venues close recently, despite a rising culinary profile. These all make for a more friendly market in which to open your establishment than a region where the odds may be more stacked against you, like the super-saturated markets in NYC, San Fran, and New Orleans.
There’s an oft-repeated statistic about restaurants with murky origins but has been widely accepted: Half of all new restaurants close within its first 18 months in business. It’s a notoriously brutal business with thin margins, and this has manifested itself in a trend these last few years: Restaurants, especially in larger cities, are having trouble finding enough cooks. Here in Chicago, it’s not uncommon for chefs to call their restaurant colleagues hours before dinner service, desperately seeking a few cooks to spare. There’s a simple explanation: Cooks don’t get paid a lot, and in expensive cities, they end up sharing a two-bedroom with three other roommates, in a faraway neighborhood. The shortage of cooks is especially prevalent in San Francisco, Seattle, New York, and Chicago. Which makes a place like Milwaukee, Cincinnati, or Minneapolis attractive—a dollar goes further there—just as long as you don’t mind some harsh Midwestern winters. The hot kitchen should keep you warm.