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this post was submitted on 29 Jan 2024
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In my unfortunately extensive industry experience, the main reason for beloved restaurants closing down is that their rent gets jacked up. That or the management is just flat bad at finances, but that usually gets you in the first 6 months to a year.
So if you have a business plan to tolerate the rent in a location of a formerly-closed restaurant... shrug. You'll probably be fine until the landlord jacks it again.
Another thing that kills businesses is not enough startup capital.
It takes time to build a customer base and you have to be able to operate in the red until that happens.
I'd say you'd need enough to survive for one year without earning a penny, although I personally would do 2 years.
Yeah the damned real estate market is a mess. Home ownership is rough, but being a small business owner seems impossible now. At least if you're trying to get into somewhere popular like downtown.
My favorite coffee shop just got closed down. Owner told me the landlord basically told her the rent would have another 0 in it starting 2024. Maybe she was exaggerating, but that's just so frustrating to hear.
Lack of infill development is a huge part of the blame. My city is growing fairly fast and is way above average in urban design compared to most US cities (thanks, largely, to just being plain old and dodging a lot of the mid-late century "redevelopment" by blind luck). But even still it is VERY hard to get through city permitting and all that to get a construction project done and they have all sorts of very dumb rules that make spaces for businesses VERY expensive (such as minimum parking requirements that make not one shred of sense. For example, any "new" bar or cafe trying to reno a building to set up a location would basically need to buy and level the building next door to build a surface parking lot, to satisfy minimum parking requirements, in spite of it being a medium-dense and fairly walkable midtown area.
It means the buildings that are already approved for commercial are HUGELY valuable. And the quantity of them only goes down over time, even as demand goes up, since they occasionally get converted to residential which is a one-way street. Residential infill is its own disaster, but the commercial properties are particularly fucked by the MPO.