Where to Open a Restaurant?

I was talking to a savvy restaurateur who told me how he decided on the location to open an Indian restaurant in a particular neighborhood in San Diego.

He found several viable locations for his Indian cuisine. The problem was, how could he know which one was the best? So, he tested the market. For each potential location, he created his restaurant menu and direct-mailed it to the surrounding neighborhoods. Each menu had a different phone number to call, with the address of the potential restaurant. He immediately started getting calls from people who loved Indian food and were grateful that one was opening nearby. After a several weeks, he had enough calls to see which location had the most interest.

Testing a market, like this, is a very simple technique, but it's often the most overlooked step in the process for many entrepreneurs. Be sure to listen to your customers before you make up your mind to avoid confirmation bias.