Market research for a taproom location

Start with the licence, then the site

Alcohol is a state subject in India, so the rules on where a taproom may be, including distances from certain buildings and zoning limits, differ by state and change. Settle the permitted locations with a licensing adviser or the excise department before you fall in love with a site. In other countries, check with the local licensing authority in the same way.

A site that cannot be licensed has no value to you, however good the footfall.

Count the people who pass

Stand outside the site, or at the doors of comparable venues. Count the people who pass. Do it at the hours you would trade and on weekdays and weekends. Fifteen-minute counts at several times give you a pattern. Note whether they are on foot or in vehicles and roughly what groups they are in, such as office workers, couples or families.

Counts of passers-by are not customers. Treat them as a ceiling. A busy road with no place to stop may bring nothing in.

Define the catchment

Draw the area from which people will realistically come, by travel time and not by distance. In a congested city, 15 minutes by road may cover only a small area. Within it, list offices, residential blocks, colleges (but never target under-age drinkers) and other venues.

Then estimate demand with the visit chain from sizing a local beer market: people nearby, share who go out, visits per month, spend per visit. Use the low, middle and high cases.

Study the neighbours

Visit competing bars and taprooms at your trading hours. Count seats, how many are full, prices on the menu and what the crowd is. Our competitor analysis guide gives the framework.

A cluster of busy venues may mean the area is proven rather than crowded. Empty venues are a warning. Ask owners of nearby shops and venues what the evenings are like.

Test the maths

Put the numbers against the rent. A simple check: take expected monthly visits, multiply by average spend, then subtract costs of goods, staff, rent and utilities. The following figures are an illustration only, in rupees. If you expect 3,000 visits at 500 each, revenue is 1,500,000. If rent, staff and the rest come to 1,200,000 before stock, only 300,000 is left to pay for beer and food and leave a profit. That is thin. Change the visit figure to the low case and see if you survive.

Ask landlords about lease length, rent increases and who pays for ventilation, drainage and the hot-side plumbing a brewhouse needs. A brewing taproom also needs floor drains and a water connection capable of the flow your system needs. A 5 hectolitre system draws a lot of water on brew day, so ask the landlord what is allowed before you sign.

Talk to people who live and work nearby

Counts tell you how many people pass. Conversations tell you what they would do. Ask ten to fifteen local residents and office workers where they go for a drink, how far they travel, what they dislike about the current options and what would bring them to a new place. Keep it short and friendly. Never ask anyone under the legal age.

Listen for the practical barriers. Parking, safety late in the evening, public transport home and noise rules often matter more than the beer. A site that is easy to reach safely, with a clear way to get home without driving, serves the customer and the neighbours.

Planning for the long run

A site is a bet for years, so look at what may change. Is a road being widened, a metro line planned or an office complex emptying? Ask the local authority and nearby businesses. Check the lease for break clauses and renewal terms. Take legal advice on the lease itself since we cannot give it.

Think about growth too. If the taproom works, can you add seats, a small packaging area or storage? A site that cannot grow caps the business at the first year's level.

Decide with a scorecard

Score each candidate site on licence, footfall, catchment, neighbours, rent against revenue and practical fit. Weight the factors you care about. A site that scores well on everything except rent may be negotiable. A site that fails on licence is not.

Repeat the counts for the top two sites before you decide. One good Saturday can mislead.

Common questions

How long should I run footfall counts?

Several time slots across a few weeks, including weekdays and weekends. More important than total hours is covering your real trading hours.

Can I use online data to judge a location?

Map listings and search interest give clues about nearby venues and demand. They do not replace standing on the pavement.

Should I research before or after finding a licence?

Together. Check which areas allow a licence before you spend time counting people there.