Did you know McDonalds started as a single unit restaurant in 1940 and today has franchises in 119 countries?
I’m not suggesting you become a McDonalds and open restaurants all over the world, but if you are the owner of one or more restaurants and aspire to open more, successful restaurant expansion begins with a plan.
It is natural for a successful restaurateur to want to open another or even those with two or more want to roll them out or have a chain. Yet, by the time he/she manages good control, alleviates risks and has a good track record, sometimes their enterprises become too complex that handling everything by themselves is not viable and overwhelming. For those who want to expand, you must keep the “bigger picture” in mind and be sure your plan for expansion begins with a strategy for growth. Assessment of assets, resources, operations and market position are to be taken into consideration, as well as assessment of employees, management systems, investment, cash flows, branding and competition. Clearly defined goals should be reviewed as well.
A few things to think about if you are planning for expansion:
What profit margins do you want to accomplish?
What happens if Plan A fails, is there a Plan B?
How much time will you spend at the old restaurant/s – how much time will be spent at the new restaurant?
Are you diversified enough to enter new markets?
How do you match up to your competitors?
Taking time to answer the above questions will help you understand the pros and cons of your goals for restaurant expansion.
Expanding your restaurant does not necessarily mean duplicating the existing successful restaurant in a new location. Each and every independent restaurant requires its own financial and operational systems and capable employees, wait-staff. It also requires a new marketing plan, new branding and positioning – different than what the sister restaurant/s is offering.
The hospitality industry is highly competitive and your guests (as Danny Meyer, CEO, Union Square Hospitality Group, calls his customers) are always looking for unique choices, quality, good value, and excellent food and service. If your plan to expand covers these options then you are ready to expand your restaurant.
