My hometown is Miami, Florida and here you will find cuisine options from all over the world in various areas of the city. The Miami restaurant scene provides infinite options that cater to various customer segments and demographics that include (1) tourists (2) business people/executives (4) couples (5) families and (6) millennials and (7) singles, crowd. Additionally, there are many restaurant types and concepts to consider such as (1) fast food restaurants (2) fine dining (3) tapas style restaurants (4) bar-type establishments (5) family restaurants, and (6) casual dining. The next segment I would include is a type of restaurant business and that segment would include (1) franchise restaurants or (2) independently owned restaurants. Then I would segment the restaurant market based on location and the income level and purchasing power of the consumers in that location. Finally, I would segment the type of cuisine or menu offering that is most favorable to consumers in the area.
Based on my limited knowledge of the Miami restaurant market, restaurants are businesses that succeed based on word-of-mouth advertising (including social media platforms) and because of their popularity with the locals and tourists. Miami has seen great growth in the past 20-25 years and there have been several trending restaurant locations that are currently competing for business in hotspots such as Wynwood, Brickell, Coral Gables, and Key Biscayne among others. Restaurants in Miami are highly competitive, and their chance of surviving is very slim due to the changing trends in consumer preferences. Restaurants in these areas come and go and they thrive based on their popularity and trendiness. They require high start-up capital and are in locations where real estate is very expensive.
My best advice to someone that is thinking of starting a restaurant is that he or she complete a business plan. The business plan must establish clear goals and objectives based on robust marketing analysis that includes detailed information on (1) locations (2) consumer preferences (3) income levels and (4) competition. In my opinion, the most profitable market segment for a restaurant is an independently owned, limited menu, neighborhood restaurant that caters to a mix of middle-class families and couples. According to Bellini, “around 60 percent of new restaurants fail within the first year. Often, the no. 1 reason is simply location” (Bellini, 2016). For someone with limited capital, providing a new dining experience to an area that is saturated with fast food and junk food options will create great value and differentiation. Small neighborhoods will support local businesses and if the restaurant owner operates the business efficiently, provides great food consistently and a positive dining experience the business will likely succeed. My advice is to start small, build a solid reputation, and then consider opening a new location in another neighborhood where you will create differentiation and value.