The thought of expanding their business will hit every restaurant owner. It is especially tempting when sales are increasing, and customers are pouring in everyday raving about the delicious food and friendly service. Expansion, however, is a decision not to be made lightly. Careful planning and deliberation are needed to mitigate risks and maximize opportunities. Opening a second location takes more than getting a reliable general contractor in Utah. Here are the questions a restaurant owner should consider to improve the chances of another successful business.
1. What is the profile of your customers?
Customers are the lifeblood of every business. Knowing who they are, and their behavior will lead to better decision making based on data rather than gut feeling. Analyzing the current and prospective customers will let a restaurant owner know which menu items are popular and which days are the busiest. Creating an accurate profile can help in deciding the location, marketing strategy, and menu changes of the new restaurant. Appealing to everyone sounds good in theory, but resources will be spread too thinly.
2. What makes your restaurant unique and exciting?
What keeps customers coming to your restaurant? Is it the fresh oven-baked pizzas or the trendy, vibrant ambiance? The unique selling proposition or USP of a business is what makes it different from other competitors. The stronger the USP, the better a restaurant can attract and retain customers. Focusing on this insight can help replicate success for the second location, serving as leverage for marketing and outreach.
3. Do you have acceptable funding options?
An expansion plan is not complete without a detailed funding scheme. Restaurant owners will have to think through if they must take a bank loan or opt to explore crowd-funded campaigns. How much will the total investment be when rent, equipment, salaries, and other expenses are added up? The Utah Government details the financial resources a business can avail. It is usually not recommended to use the existing restaurant to fund the new one as it may drag the company down if things don’t go to plan.
4. What is a good location?
Picking the right location might spell the difference between perpetual slow days and jampacked tables for a restaurant. Spending time and gathering information in potential locations can help in evaluating the potential performance of the second restaurant. It is essential to examine eating trends, foot traffic, and competition in each area.
5. Should you start small first?
Business expansion doesn’t necessarily mean putting up an actual brick and mortar store. Cheaper and fewer effort options are available such as experimenting with food trucks and trailers, offering delivery services, and extending opening hours. Developing a franchise program can also be an alternative to have a more hands-off approach. This can lessen worrying about the daily operations and concentrate on providing support to another trusted franchisee. As the popularity of these smaller initiatives grows, more customers will grow to love the brand, which can give more resources to be used as initial capital for the next location.
The right research and preparation are critical for successful business expansion. Restaurant owners will have to consider many factors if they are ready to take their business to the next level, given current resources and opportunities.