How To Start A Business Part 5- The Demand GapWith the target market segment in mind, statistics as to population
should be the basis of determining the demand. If the restaurant is
going to cater to employees and students, the demographic profiles
of these population segment in the AREA where the business is going
to be located are very important.
Example, if the number of employees and students total to 30,000
and 50 per cent of them are potential customers (some bring their own
food, some do not eat in restaurants/fastfoods and some other reasons to
trim down the total population.
How many of these would be targeted? Did I hear 10 per cent. Some write
this randomly, 10 per cent, 5 per cent even an ambitious 20 per cent
on the ifrst year of operation.
But what about the supply? In restaurant business, it is the number
of eateries or food establishments that are in the area which are also
There is also what is called as seating capacity of the proposed
The seating capacity pertains to the number of customers that
can be accommodated at one given time e.g. 50 tables with 4 chairs
each. During peak periods, what is the expexted seating capacity
expressed in percentage as in 80 per cent or 80 or 40 tables out
50. And what is the turnover during peak periods?
What's the capacities of the competitors? If the market segment
totaled about 15,000 and total capacities of the cometitors amount
only to 10,000, then there is a gap of 5,000 not being served.
With 100 seating capacity and an assumption of 3 turnovers during
peak hours, the target clients number only 300/per meal/day.
One should remember, that the restaurant has no specialty that
would give it competitive edge to the restaurants already in
business in the locality.
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