Does double the locations mean double the success?
For many restaurant owners, the answer is yes.
Are you already running a successful restaurant? If so, you know what it took to get it off the ground, and you know that it’s often more than a full-time job.
You might be thinking to yourself, “There’s no way I can open a second location.”
While it may seem like a Herculean challenge, we’re here to tell you, “If you’ve done it once, you can do it again.”
If you are in the right market, have the energy, and are ready to expand, you can do this.
This begs the question, though, “How do you know you’re ready to move from one restaurant to two?” In this article, we discuss some things to consider as you ponder increasing your restaurant portfolio.
One of the first questions you want to think about is whether or not your current restaurant can support you through the transition of opening a second restaurant.
If your current restaurant is highly successful, go for it. Yet, if your original location isn’t doing well, then expanding your operation is not the best idea. (tweet this)
So, can your restaurant cover some of the costs of opening a new location while maintaining salaries and operations? If so, you’re ready to consider it.
Once you feel financially confident, you’re ready to start developing a business plan for your second location.
Begin by looking at what worked when you opened your first restaurant. Analyze your initial business plan, keep what worked and modify the rest with what you learned the first time around.
One tip is to dig deep into your location statistics. Consider why the location of your first restaurant works. Then ask yourself if you’ll be able to duplicate it with a second restaurant.
Look at the competition in the area. Is there more, less or the same as in your initial restaurant?
You’ll do best if you use your initial insights to guide your choice of a second location.
Bottom line – make sure your first restaurant can handle your financial obligations, study your business plan, and start creating a new one for your second restaurant.
Why is this a consideration? It’s worth considering because you’ll be much too busy to give your first restaurant a lot of time.
If your actual presence is vital to the success of your original location, it may not be time to open a second restaurant.
Yet, if you have a strong team in place, you don’t need to be hands-on in the management of it, and you trust that the business can continue effectively without your daily involvement, consider opening a new restaurant.
You also want to consider whether the success of restaurant number one is because you’re there every day dedicating yourself to it. You are just one person, and it’s hard to be in two places at once.
Even though you are dedicated, you’ll need to be willing to relinquish some control to your trusted team.
You want to make sure your first restaurant will continue without you. This is just one reason it’s so important to create a strong, effective team. This goes for both locations, so you can float between the two.
It’s not a good idea to spread yourself too thin. If you have someone you can trust to run your first restaurant, or if you have someone who can work on launching your second location, you’re in good shape.
If not, hold off until you do have a strong team in place.
Have you thought about your community? Can it support two of your restaurants?
We’ll assume that since you’re considering opening a second location, you’ve thought about where you’ll place your second restaurant.
Location is one of the most important aspects of opening a restaurant.
Is your proposed location far enough away that you won’t split your customer base?
Look at your demographics. Are there two areas of town that can support you?
Alternatively, you might be opening a second restaurant with a different concept than the first. If this is the case, opening near your first location may be okay.
It all comes down to your target markets, your concepts, and whether your city can support two restaurants, either the same or different.
Since you’ve already opened one restaurant, you know how much it costs.
Even if you’re first restaurant is going well, you’re still going to need capital to make it happen. This might be in the form of investors, a loan, or you might use profit from your first restaurant.
Remember that everything will be in duplicate: rent or mortgage, utilities, staffing costs, insurance, permits and fees, upkeep and more. Plus, you will probably have to design and outfit your new restaurant.
While you may be able to save a bit of money on food with your added buying power, you’re still buying for two.
Just be sure to lay out your costs and make sure it’s financially feasible for you to move forward.
It’s also a good idea to set aside a contingency. This can help you plan for unforeseen construction and remodeling costs as well as cover any shortages if your current restaurant begins to struggle.
Opening a second restaurant takes a lot of hard work, planning and follow-through.
But, you can do it because if you’ve done it once, you can do it again.
Think through the questions in this article. If you can check off most of these requirements, you’re well on your way to a solid plan.
You know what to do and how to do it. You also know what you’d do differently the second time around. So, in a way, you are more prepared to open your second restaurant than you were your first.
The best thing about opening a second location is that you’ve already been successful once, so it stands to reason that you know what it takes to do it again.
Take your time, do your research and then decide whether you should go all in.
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