For many businesses, expansion is part of the plan from day one. For restaurant owners, however, thoughts of opening one or more new locations or adding new services such as catering or hosting special events may not arise until the business has begun to establish itself. Then the challenge becomes how to maintain the success of the initial operation while branching into new venues and opportunities.This is why a restaurant strategic growth plan is key.
The technique that restaurants have favored in the past to chart their expansion plans is to find what worked for some other restaurant and copy liberally from their playbook. However, it is no longer enough simply to keep pace with the competition. One-third of all organizations act so slowly that they miss opportunities and fail to mitigate new threats.
Expansion provides restaurant owners with a chance to think big and turn their great ideas into reality. Yet making sure those dreams of growth don’t turn into nightmares requires a lot of planning, a lot of studying, and a lot of flexibility. MBB Management explains that finding the perfect restaurant strategic growth plan depends on the right mix of creativity, practicality, and insight into the nature and potential of your business.
Look Years Ahead, Not Just Months Ahead
The restaurant industry changes so rapidly that any form of long-term planning is perilous. It’s still important to have a plan that goes beyond the next month, quarter, and year. The key is to build flexibility into the restaurant’s long-term growth strategy. Aaron Allen & Associates recommends that restaurants establish a “rolling” 36-month plan in addition to the standard annual initiatives that focus on cutting costs, boosting employee morale, improving efficiency, and enhancing customer experiences.
By contrast, a restaurant’s 36-month plan imagines ways to transform the business through the implementation of new processes, systems, and technologies. It considers the many ways the food service industry is changing in response to the preferences and demands of customers, including increased mobility, more payment options, new labor models, and automation of manual processes.
A principal goal of the restaurant’s long-term growth strategy is improving communications between managers and workers, and among workers throughout the organization. It’s critical to have buy-in from employees in the front and back of the house to ensure they understand the business’s plans for growth and are committed to ensuring the plan’s success. Aaron Allen & Associates states that only 42 percent of restaurant managers and 27 percent of employees are given access to the company’s strategic plan, which means most people in the company have no idea where it is heading.
Manage the Complexities of Expanding to Multiple Sites
One advantage for restaurants that open a second location is having a single back office for both operations. Restaurant Business reports on a 2017 survey that found 82 percent of restaurant operators are experiencing increased labor costs. To counter this trend, 40 percent of restaurants either have already automated much of their back-of-house operations or plan to do so.
Today’s restaurant management systems allow multisite establishments to centralize scheduling and other human resources operations, as well as create a single customer database that combines information on guests at all locations. They ensure that gift cards and promotions can be applied at the outlet of the customer’s choice, especially as online gift cards replace the less-popular plastic alternative.
Some considerations when operating multiple restaurant outlets include ensuring product availability, managing price differences among restaurants, and if operating in more than one state, changes in taxation and employment laws, among other variables. For example, customers who maintain house accounts, whether prepaid or with a credit card on file, will want to access those accounts from all of the restaurant’s locations. House accounts are also popular with a restaurant’s individual and businesses clients who hire the company to cater events regularly.
Restaurant Expansion Possibilities Are Limited Only by Your Imagination
Even if a restaurant owner isn’t ready to open a second location or go mobile by purchasing a food truck, there are many ways for an establishment to “expand.” MMB Management recommends starting by seeking the advice of restaurant industry veterans via restaurant associations or other sources.
These are some of the potential components of a restaurant’s strategic growth plan:
- Revitalize the menu by giving current dishes new twists and adding items, perhaps entire categories of items such as a range of vegan or low-sugar selections.
- Come up with something new, whether it’s a dazzling new taste, a unique restaurant decor, or an innovative promotion.
- Connect with other businesses as part of an event or promotion to share resources and reach new customers
The signs that a restaurant is ready for a second location include having more customers than the current location can accommodate, strong cash flow, frequently running out of inventory, and chronic staffing shortages. The second location will require a strong money flow but also plenty of managing and leadership to get the new operation off the ground. Before expanding, make sure both the new and old locations will receive the management attention they need to be successful.
Achieving Your Restaurant’s Strategic Growth Plan
Once the restaurant expansion plan is set in motion, the challenge becomes achieving what Fast Casual calls the “trifecta of restaurant expansion success”:
- Managing the natural tensions between profitability vs. growth, short term vs. long term, and benefits to the whole vs. benefits to its parts.
- Establishing a solid technology architecture to automate manual processes and take advantage of economies of scale.
- Ensuring that the dining experience is consistent at all locations by centralizing and standardizing documentation, training, and other processes.
Even with the firm footing that these three areas provide, any restaurant expansion plan has to be flexible enough to respond to the unforeseeable circumstances the future is sure to hold. A successful restaurant strategic growth plan builds on the strengths that brought the business this far and keeps it thriving: a love of good food, and a love of people to share it with.
Learn more about how the talech POS system helps restaurants and other small businesses improve the experience for their customers and optimize the management of all their operations. We work with you to determine the best ways to meet the needs of your customers and employees so your business can thrive. We take the time to learn your business so we can balance your specific needs with your budget and comfort level in a custom POS system implementation. The result is a valued investment that will pay for itself in short order. Reach out to us today to sign up for a free demo and learn more about how talech can be your valued partner in the POS world.