How Can I Open a 2nd Location or Become a Chain?
Opening a restaurant location quick tips
Are you a single operator and your restaurant sales are booming, your staff is happy, and your guests are buzzing with rave reviews? Naturally, you’re starting to wonder: what’s the next step? Expansion might be on your mind, but before you dive into opening a new location or acquiring the empty office space right next to your establishment, it’s essential to perfect your current setup. Restaurant Consultants often recommend this approach—Improve Existing Organization Effectiveness. This could mean testing new menu items to see what resonates with your customers, experimenting with fresh design concepts to enhance the dining experience, or streamlining processes to boost efficiency. By honing these elements at your existing restaurant, you lay a solid foundation for future growth. So, before taking the plunge into a new venture, ensure your current establishment is running like a well-oiled machine.
If you’re confident about the expenditure costs and ready to open your next location, there are some basics every restaurant owner should know. Despite restaurants closing due to COVID, cash flow deficiency or supply chain instability, many owners are seizing this unique time to expand, experimenting with new concepts like high traffic Popups, BOPIS (buy online, pickup in-store), and even changing concepts based on targeted demographics.
Quick Guide How to Assess
a New Location?
Expansion Key Areas To Analyze
Customer Analytics: Dive deep into your current and potential customers' habits. Understand their favorite menu items and emerging trends in their area. Use your POS system to gather data on menu popularity and spend patterns. Conduct both qualitative and quantitative research, reaching out to top spenders for feedback on new concepts. Visit popular local restaurants to observe demographics and preferences, incorporating these insights into your new location.
Competitive Position: Competition in the restaurant industry is fierce, take a closer look at your potential competitors (Who are they, How they operate, Their weaknesses and How can you gain an edge by fulfilling the missing piece)
Restaurant Model Testing: Visualize your new restaurant. Consider experimenting with new concepts, like adding kiosks for fast-casual places or mobile POS tablets for full-service restaurants. Document your ideas and create a blueprint for your kitchen and front-of-house layout. For example, Ladurée uses strategic site modeling to select locations, with premium locations offering a full seating stores and Casual cafe location offering a grab and go.
Restaurant Sales Cash Flow: Understand your cash flow growth percentages over time and set clear goals for success at the new location, including break-even points. Knowing how cash flow impacts your business, from customer spending to equipment repairs, helps in choosing the right vendors and partners for your expansion.
Restaurant Matrix Analysis: Conduct a SWOT X SOAR analysis to organize your thoughts and address critical questions before expanding. Identify your current restaurant's strengths and weaknesses and aspirations, wanted results, available opportunities for the new concept, and potential threats in the new area. Including this analysis in your business plan helps visualize the path to success.
SWOT X SOAR Analysis is more effective and practical than SWOT
Want help setting the foundation of your restaurant expansion? Book an introduction call to learn more about expanding the right way.
Quick Guide for Opening Your Next Restaurant
Restaurant Funding: Consider applying for a traditional loan from banks (Bulk Banks or Local), SBA Loans, Merchant Cash Advance (through your POS provider, just beware of high interest rates) , crowdfunding (Friends & Family, Customers or even Vendors) or Grants.
Find the Best Restaurant Location: Start by scaling locally to capitalize on word-of-mouth from your existing customers and overlapping populations. Ensure your second restaurant is in close proximity to your current location to streamline logistics and facilitate easy distribution from your central operations.
Write Another Restaurant Business Plan: Develop a new business plan incorporating successful elements from your current restaurant and new ideas for the upcoming location.
Apply for Licenses and Permits: Research and apply for the necessary licenses and permits based on your new location's regulations.
Find the Right Restaurant POS System: Evaluate if your current POS system meets your needs or if you should upgrade to a system that manages multiple locations. This is crucial for strategic management and automation, it will help you being close to operations as possible without being in all stores everyday.
Perfect Your Restaurant Marketing Plan: Leverage your existing channels (Social, Email subscribers, Website popups and Google) to create a teaser for your customers. Get featured on food blogs, local magazines and depending on your target audience you can advertise with Chamber of Commerce.
Build a circulating staffing system: Fill your new location with trustworthy staff and managers from your current location as you build up your staff in all of your locations, existing employees will feel appreciated and wouldn’t need extensive training.
Purchase Equipment, Supplies, and Food Inventory: Invest in quality kitchen equipment and stock up on the necessary inventory for your opening week. Moreover, if you don’t have the necessary funds to purchase all new equipment, you can find equipment financing or choose a location with already built kitchen equipment until you create enough cashflow.
Host a Grand Opening: Invite friends, family, local influencers, Chamber of Commerce members and reviewers to your grand opening for live feedback and publicity.
Create a buzz: The new location needs a buzz for locals to come try your restaurant, this can be collaboration with local offices, promo on local social apps (Nextdoor) or selling in Framer’s Market (If you can ready to sell products).