Thinking of Expanding your Business? Here's Our Road Map to Help

Dec 15 2016

Starting a Restaurant Restaurant Management Business Expansion

Once your first location is profitable and running smoothly, you might begin to consider expanding your business into a second (or even third, fourth or fifth) location.  It is often assumed that additional locations will open and operate exactly like the first one, but that is not usually the case.  If expansion is in your future, here are a few tips to consider:

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Determine your goals.  Do you want to expand your current success to a new location or venture out and try something new?  A replication of the first concept is considerably easier since you have experience under your belt.  If you decide that this is the best route for you, then it is important to keep everything as similar as possible. People who know your brand will be disappointed if it does not match their expectations.  

If you are opening a completely different concept – or even just venturing out to a different city – your idea may need to be tailored for the different market.  If the new demographic demands a vastly different menu, décor, and/or service style, then consider a second brand to avoid diluting your original concept. 

Also, consider how you want to set up the businesses.  Some restauranteurs prefer to run each location as its own, independent business, but others may run multiple locations as one business – sharing employees, inventory and incentives among them.  Decide which is best for you and your goals. 

Create a business plan.  Just like your first business, the second one must be thoroughly thought through.  Whether you are replicating your current business or trying something new, you need to do your due diligence.  Do not assume that you can merely duplicate the first restaurant and double your profits; from different staff to local competition to a different climate – there is always something new to consider.

Secure your funding.  Ideally, the profit from the first location will pay for the second location – but this is not a deal-breaker for expanding.  Many successful restaurateurs have borrowed the money to open their businesses.   If you do require a loan, the success of the first restaurant will help considerably in securing funding.

Make sure that you have the proper people and processes in place.  You cannot be in two places at once.  The new business will require long hours so you will need to be sure that the first location is set up to run smoothly in your absence.  If you don’t already have one, start by hiring a manager that you can trust to run your business on their own while you are away.  This person needs to be someone who shares your same business and ethical values, and that you know can make important decisions on your behalf. 

You should have proven processes and procedures in place at your first location before you open any additional sites.  These could include (but are not limited to) human resources practices, including hiring, training, payroll, terminations, etc.; as well as operational procedures that include opening/closing check lists, running the kitchen, inventory management, accounting systems, invoice handling, and so on. 

Consider your software choices.  Along these same lines, having the same software in place at both locations will save you time and give you peace of mind.  The new location is typically not a good time to try out software or systems that are different than the first location, as they can double the amount of back-office work.  You also want to avoid learning on the job – being able to compare sales, spending, payroll, etc. will allow you more time to focus on the business, not the paperwork.

Expanding your business can be an exciting and fruitful endeavor if you are mentally and financially ready for the challenge.  Good luck!

Jennifer Day

Jennifer Day

Jennifer Day has over 16 years of experience in the marketing and communications field. Before joining the Ctuit marketing team, Jennifer previously worked at a major telecom company and was in marketing communications for a major point of sales (POS) manufacturer and software provider. She brings with her a wealth of knowledge on POS technologies, software and back office systems and the understanding of how they all work together to create a seamless customer experience while increasing profitability.