5 Signs Your Restaurant Is Ready to Scale
Sep 19, 2019
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Is your restaurant completely booked up 24/7? Are you struggling to fit in the long line of customers that is out the door? Is your staff constantly running around trying to keep up with the steady flow of customers? If so, then you might be considering scaling your restaurant. First, let me say congratulations on running such a successful restaurant! That is not an easy accomplishment in such a competitive industry, and you should be very proud. At the same time, expanding your business can be nerve-wracking and intimidating. Success is never a guarantee, and expansion is always a risk. However, there are some obvious signs that your restaurant is ready to scale and will continue to have high levels of success that will hopefully make your decision a lot easier! After all, a good entrepreneur is always looking ahead towards the next great opportunity!Demand
The first obvious sign that your restaurant is ready to scale is that you have high demand and have more business than you can currently handle as your business stands now. With lines out the door, phones ringing off the hook, and tables constantly full, you are running out of time and energy to accommodate the current demand! While high demand is certainly a good thing, it can also be a drain on your staff and resources if it gets too high. It can be a little hard to tell how high is too high, and when is really the right time to scale your restaurant but you can get a good indication by looking at your customers.
Loyal Customer Base
If you have a steady stream of regular customers in addition to constantly getting new customers, this is a sign of a good customer base that would be receptive to scaling your restaurant. Another positive sign is when customers from out of town express the desire for a location closer to their area. A loyal customer base is also a good place to test out potential ideas for scaling – whether it be the location, theme, or new menu options, your customers will be willing to give their input and will be excited for future possibilities of your restaurant! This is a really good chance to engage with your customers and get them involved in your business. Social media is an effective way to undertake this informally, as you can easily conduct surveys on pages like Facebook as well as solicit feedback from customers about specific ideas. Additional formal market research should also be undertaken in order to get all the possible information about market feasibility, potential locations, etc. in addition to the informal information that you have compiled from your current customers.
Skilled Staff
In an ideal world, you would be able to scale your restaurant all by yourself. However, you will require the cooperation and support of your current staff in order to successfully scale. If you have a loyal, hard-working, and dedicated team that is passionate about the work that they do, then they will be just as excited about expansion as you are! After expansion, having a reliable staff is especially important as you will likely be devoting more time to the logistics of running a new location – so you need to have people you can depend on to keep the first location running smoothly while you focus on other things. Make sure to reward your staff for their loyalty and performance by promoting from within for higher positions within your business.
Realistic Plan and Goals
It is important to know exactly what scaling will entail and to realize that it is a completely different challenge than the one you have already successfully conquered. Therefore, the steps will be similar, but different and they need to be mapped out ahead of time in a business plan before you begin this new adventure to ensure that you have everything you need. It is also important to set goals from within your plan, so it is easier to see where you are at in the process and make decisions or adjustments accordingly. If you aren’t meeting your goals in the time that you had planned – don’t panic or give up! Things rarely go to plan. Instead, you just need to slow down and take a hard look at potential problem areas and come up with solutions to get you back on track towards your goal.
Cash Flow
You already know how expensive it is to open a restaurant because you have already opened one! Still, it can be easy to forget just how quickly some of the little costs can add up and potentially leave you strapped for cash! And just because your business looks good on paper does not necessarily mean you have enough money to invest in scaling your restaurant due to high startup costs. In this case, you could always look for restaurant financing options to obtain the extra cash you need to scale successfully. You also need to make sure that if you are expanding, that your first restaurant is profitable enough to support the second location for a period of time if need be – as it often takes some time for a new location to become profitable due to the high amounts of startup costs. Overall, the money needs to be there to cover the initial costs as well as the beginning period until you start becoming profitable again.
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