Your restaurant business is booming, and you are thinking about expanding to a second location. You are making a comfortable profit, your clientele is growing, and your customers keep telling you how much they love your place. But you remember how hard it was to open the restaurant you are in now. It all started with a dream–and not much else. You had to plan the menu, hire staff, find the money and location, outfit it, and perform countless other tasks before opening the doors, crossing your fingers and hoping people would come. Those vivid memories are enough to scare anyone away from opening a second restaurant.
Just take a deep breath and relax a little, because opening your second restaurant isn’t nearly as difficult as the first one. You already have your menu, and your clientele is begging for more, which is half the battle. Still, there are several things you must take into consideration. To be on your way to a successful small franchise, consider these 7 suggestions before beginning the process to opening your next restaurant.
1. Have a Plan
Lucky for you, you aren’t exactly starting a restaurant from the ground up, so some things are already planned. For example, you could carry your menu over from the first restaurant, and since you already have a food supplier for your first restaurant, you will probably use the same supplier for the second one. Make sure you are planning the things that do not carry over to your new restaurant like, location, demographics, staffing, financing, purchasing or leasing equipment, decoration and ambiance, advertising and marketing, and so much more.
This can be daunting, but it can also be handled efficiently and without excessive stress. Take a moment to sit down and write a list of all of your wants and needs for your new place before you do anything else. Then, research. With a little elbow grease and the right resources, you can find anything from the best deals on equipment to the best location for your new restaurant.
2. Avoid Falling into Traps
Double the locations can mean double the problems if you aren’t careful. There are many traps you could easily fall into, such as failing to obtain a second liquor license, inefficient management and staff, ignoring the demographics, and improper planning. Make sure you avoid any traps through proper planning. Take into account everything that makes your current restaurant run smoothly before taking any steps towards opening your new restaurant. Also, make sure you address all the paperwork and other legalities. If this becomes too difficult for you to handle on your own, you can hire temporary help for these tasks. Certain legal consultants can help you make sure you are obtaining the correct permits and licenses, and an accountant or financial advisor can help you organize your budget.
3. Location, Location, Location
As any realtor or business owner knows, it’s all about location. When you are opening your second restaurant, there are a number of things to consider regarding location. It might seem logical to open a second restaurant just two blocks from the next one so that you can easily commute between the two and manage both at the same time, but consider the limits that puts on your audience. If you don’t have enough clientele to split between two restaurants in the same area, you should open your second restaurant in a different area so that you can reach more clients and gain more business.
You will want to research locations. Examine the restaurants in any area you’re interested in to see which restaurants are there and doing well so that you can gauge whether or not your restaurant will thrive. Maybe an area already has five pizzerias, and three of those are struggling to stay afloat. This is a pretty good indicator that another pizzeria in this area is a bad idea. You can also observe areas to see how populated they are. If it is a downtown area with plenty of traffic, you are much more likely to catch more passersby.
4. Hire Trustworthy and Competent Staff
Nothing will discourage clientele more quickly than rude or incompetent wait staff and poorly cooked food. Unfortunately, a new location means more interviews for a reliable and competent head chef, line cooks, wait staff, and hosts/hostesses. Just take a deep breath because you already have a head start. If your first restaurant was a success, you can likely recognize the qualities of good staff members. Before you go through the stacks of resumes, you might want to make a detailed list of good qualities you’ve found in your first staff as well as qualities you want to avoid. With this list in hand, you can easily weed out the unlikely resumes as well as come up with a list of questions to ask during the interviews.
5. Manage Both Locations
With twice as many restaurants as you had before, you will need to consider proper management. It might be possible for you to undertake the management of both of your restaurants. If the restaurants are extremely close to each other, you could run back and forth all day to keep things running smoothly. However, this is done at the risk of hurting one or both of your restaurants. One way to encourage higher success rates in both of your restaurants is to hire someone else to manage one of them. You could get a business partner, or simply hire a manager to control the running of one of the restaurants so you can focus your time on the other. This way, neither restaurant has to suffer, and you have a little more free time for yourself.
6. Find Financing
You won’t be able to do anything without enough capital. Perhaps you are earning enough at your current restaurant to pay a good portion of the expense, or perhaps you have been slowly accruing savings. Either way, opening a new restaurant will cost you hundreds of thousands of dollars, and most people don’t have that kind of cash lying around. Make sure that all of your finances are in order from your current restaurant and that your credit score is good so that you can get a loan. To fully outfit your restaurant, you are looking at purchasing or leasing the building, kitchen equipment, tables and chairs, office supplies, host stands, decorations, lighting, and much more so that you can get your restaurant ready for business. If you don’t feel like you have the time or know how to find this cash, you might consider hiring a financial or food service industry consultant to help you organize your budget and find the necessary money.
The equipment you need depends on the restaurant you have. Obviously, if you are opening a second pizzeria, you are going to need another brick pizza oven or two. You will probably have a pretty good idea of the things you will need from your first restaurant. But don’t forget to take into account the little things you might have forgotten. For example, remember to take precise measurements of your new restaurant space to ensure that the appliances you want will fit in your kitchen. You will also want to measure the dining area so you know how many tables and chairs you will need and what sizes will fit. Don’t forget that you will need to furnish your office with desks, chairs, shelves, computers, etc.
Finding this equipment can prove difficult. You might not have a commercial restaurant store near you, and with one restaurant under your care already, you probably don’t have time to drive around or search endlessly online to find the perfect equipment. Lucky for you, there are now websites that feature a collection of sellers so that you have unlimited options on equipment but only have to browse one website. Another challenge can be finding the capital to back the equipment purchase. This type of website also offers you the chance to lease your equipment and potentially purchase it for a heavily discounted price after a certain amount of time. This might just be the perfect option for expansion.
Opening a second restaurant might be a little bit easier than the first one, but it will still take some considerable time and effort on your part. It’s up to you to make sure you are including the proper planning and care of your second restaurant so that you can have double the success.