How To Expand Your Restaurant Business Successfully

By Riajur Rahman -- Tuesday, 28 Jun, 2022
how to expand your restaurant

The restaurant business is very competitive and not an easy task. To succeed in this business in 2022, you must give more effort than in previous years. It's become very challenging to handle a restaurant properly. And if you can make one restaurant successful in a single location, you can grow it more or think of branching out and creating a more successful brand. If you are a new restaurant owner, you may not have the idea about branching out. To boost your revenue and fame as a restaurant brand, you must provide the best quality food and use calculated strategies. This article will guide you on how to expand your restaurant.

When are you ready to expand your restaurant?

As with any other business, the restaurant business also reaches a state when it needs expansion. And a restaurant should take on new challenges for its continuous growth. But you may fall into a trap without knowing your restaurant business is worth expanding. Many businesses expand without a clear roadmap and fall so fast. So be careful when planning to expand your restaurant business.

To know the right time to expand your restaurant business see the following important factors:

  • Customers want more

Does your restaurant have too many customer requests to handle? You can start thinking about growth if you see an increasing sales rate in your restaurants. Then you have to think about how you can meet customer demand. You can purchase new equipment, appoint new cleaners, waiters and chefs, or open your restaurant branch in another location.

You can open your new branches by following your first restaurant business model, which is already a successful model for you.

Customers may request new food items. If you get the same requests from many customers regularly, you might add them to your Menu. You can appoint a specialized chef for that recipe. By considering these, you can serve better to your customers.

  • Have team support

Without team support, no business owner can win in his business. You can think of expansion if a strong team is running your current restaurant. You can appoint new staff if your team can not handle the extra pressure. Supportive employees and suppliers are the motivation for success for a restaurant owner.

Do not expand your restaurant without knowing whether your staff can do the job or not. When staff also think of the restaurant's future and focus on skill development for the restaurant's benefit, you should definitely take steps to expand your restaurant business.

  • Constant revenue generator

Revenue generating is the ultimate reason for a business. The stable and constant cash flow largely depends on the regular customer number. If the regular customer increases, the profit of a business also increases and becomes stable.

When your restaurant business continuously gives you a handsome revenue, you can consider expanding the restaurant considering the existing customers. But you should keep enough backup to balance your business position even when you fall. Your investment should give you enough profit to make your expansion worth it. 

  • Another plan

If you love business and have the habit of investing, you can also consider expanding your restaurant. Every investment is risky, but you should depend on the calculated risk. Create a well-coordinated plan for your new investment to expand your restaurant business.

You should keep back up a plan so that if your first plan fails, you can use your other plan to pick yourself up. Thus you will provide safety and security. A backup plan should not come in the way of working hard for the first plan.

  • Financially Prepared

Obviously, without financial preparation, no project can be started. Ensure that you have enough financial support before planning your restaurant growth. There are always some expenses that can not be predicted before. So, it is better to have some extra cash on hand.

Create your scalable restaurant expansion plan and allocate a budget for all the necessary pieces of equipment and wages. Your financial pressure will release, and you can focus on other things.

  • Partnership offer

Now that your restaurant business is so popular, many investors may want to invest in your business. Even your competitor can propose a merger. If you are getting this type of offer, make sure they are authentic, and before taking such a step, you should make sure your legacy remains.

Someone who wants to invest means they want the profit you are making. Investors research and find that your restaurant business has enough potential to give them profit. Now, it's your choice whether to involve them or not. You can consider equity crowdfunding instead of a merger or acquisition. 

  • Reached your milestone

Every business owner has a milestone for their business. This is part of the company's strategic plan. This plan takes time to reach. This milestone helps one to take further planning and decision making. Many business owners divide their milestone plans into different parts. But, when an ultimate milestone is achieved, a business person can think about his business expansion plan.

Suppose your milestone target is to achieve 35 percent revenue after three years. In that case, you can divide this milestone into 25 percent revenue after the first year, 30 percent revenue after the second year, and 35 percent reach after the third year. And when this target is fulfilled, you can surely activate your expansion plan.

  • Expansion of the restaurant industry

Suppose your restaurant business is doing fine, but the restaurant industry is not growing. In that case, you should think twice before your restaurant expansion because it is a difficult idea to expand when total business industry growth has not enough potential increase.

Obviously, you can invest for expansion whenever you want if your restaurant business is up to your expectations. But when the overall industry is doing fine, your chance of success also increases.

  • Completed the market research

If you know what your customers want, it becomes easy to expand your restaurant business. But if you do not have enough data on customers' preferences, then you have to do market research. And if you have already analyzed competitors, local market, product, and business development opportunities and find that all the information indicates you to go bigger, then start the expansion plan of your restaurant.

How to Expand Your Restaurant Business? - 4 Effective Ways

There are many ways to expand your restaurant business. Here we have explained the four effective ways to expand your restaurant business.

How to Expand Your Restaurant Business? - 4 Effective Ways

1. Catering Service

An easy way to expand your restaurant business is to introduce a catering service to customers. You have to keep extra stuff for this. You need a good chef to make your catering service popular. At first, it may be not easy to find clients looking for a catering service. But a good marketing strategy can help you make this service known to all.

Weddings, marriage anniversaries, birthday parties, and many other parties need food services. This type of party needs a lot of food. So, if you can get this type of client, you can get huge sales at a time.

It would be best if you researched the Menu for your catering service so that people do not miss the best quality food they are looking for. Keep various package menus to be flexible for clients. You can also provide service assistance to these parties from your restaurant.

Research about your area, people, what type of program they arrange, and what are the food demands on those programs. If everything aligns positively, you should start the catering service within your regular restaurant business.

2. Delivery Service

Food delivery services are getting more popular nowadays. Especially after the recent pandemic, people have built a habit of ordering food from home or the workplace. Introducing this service will add an extra dimension and help expand your restaurant business.

Select an area from your restaurant where your delivery boy can reach in a short time and where the demand for food delivery exists. If you see the demand increasing and high, appoint more delivery men. You can take cash on the delivery system or online payment system.

Necessary steps for online food ordering and delivery service -

  • Create a restaurant website with an online food delivery option
  • Make communication easier with your customers
  • Assign orders to the kitchen and ensure good delivery packaging
  • Check the available delivery man and assign the delivery request
  • Make sure your customers' address is OK and easy to reach
  • Track your orders
  • Try to take customer feedback to improve and promote your service

You can use your restaurant's food order and delivery app to make this service easier. You may need to register your own delivery service for taxes. You can also outsource food delivery services. Always ensure the quality of your food delivery service is great.

Expanding your restaurant business will largely depend on this if you do not have any other expansion plan like branching out.

3. Food Truck

A food truck for a restaurant is not a common use way for restaurant expansion. But it is a good way to introduce your food items to people. It also helps in marketing. You can introduce some menus or specific Menus on specific days for local areas. You can send your food truck to special events like football matches, fairs, or crowded places.

Always try to provide the best food on the truck. Do not offer any food whose quality can go down with traveling. If people love your food truck items, offer them a discount on a restaurant visit. A food truck can be your best expansion plan if you execute them.

Adding a food truck can be your best expansion plan if you execute this properly.

4. Branching Out Restaurant

Another way to expand your restaurant business is to open a branch of your restaurant. If you are already getting a good response in your area, you can identify another area near you with good demand for your food items. You must know how your restaurant will benefit people in the new area.

Branching out is the most costly expansion plan. So, carefully research location, food items, customer persona, and possible problems.

Follow these main steps for branching out with your restaurant:

01. Managing Fund

You can immediately create a budget plan for your new restaurant branch if you already have enough money. But you can take a loan if you do not have investment money. Many banks and financial institutions offer loans for business investment. Find the one which offers low-interest payment and a long period for a total payment. Before taking a loan, ensure that your current business generates good revenue.

You can also ask for a loan from your friends and family or involve them as investors in your new restaurant branch.

Create your budget planning considering how much money you have used to make your current business successful.

02. Choosing Location

Choose a location near your current restaurant but ensure a distance so that your current customers can influence others and you get new customers. Consider other restaurant types and potential customers in the area.

Starting a new branch in a new location is exciting. But you should not be emotional when deciding to find your perfect restaurant location.

03. Planning

The next step is that you have to create a new business plan for your restaurant branch. You can get help from your current successful business plan and add new ideas to your business plan. 

Creating a marketing plan for multiple locations is not an easy task. Create your marketing plan for your new audience. Introduce your new branch with the help of your restaurant website, social media, and local influencers.

04. Get Licenses And Necessary Equipment

Apply for the necessary licenses for the new spot so that you, your restaurant business, staff, and customers get protection in case of any lawsuit. The health department will regularly visit your restaurant for inspection. So, having a license will help you not get any restrictions.

After getting the necessary licenses, start buying restaurant equipment. Also, invest in indoor decoration to give your restaurant a luxurious look.

05. Find The Best Employee

Hiring the right staff and managers is essential for your restaurant business expansion. Your employee represents your business. You must be careful while hiring to give the best customer service and for business growth.

Hire people who also believe in your vision for your restaurant business and love to work as a team. Wrong hiring may cause a loss for your business. So, at the start of your new restaurant branch, hire only qualified, experienced and motivated persons.

You can also appoint some of your current employees to the new restaurant. They can train others and give the proper management support.

06. Integrate a POS software

Start your new restaurant branch operation with the latest restaurant management technology. You can use the same POS system you are using now to manage all your restaurants from a single place.

A POS system will surely help in operational and strategic work. An online POS system gives real-time sales, inventory, and employee data. So, it becomes easy to measure various types of performance.

Starting your new branch with a smart POS system will ensure customer relationships and improve customer retention. So, do not neglect using one.

Conclusion

Before choosing any expansion plan for your restaurant, analyze your position - whether it's the right time to expand your restaurant business or not. Then pick the best expansion plan that suits your position. Expanding your restaurant business will help you to make your brand bigger. But any wrong decision can also make you fall into financial and mental crises. So, be careful about restaurant expansion.

First, learn when to expand and then how to expand your restaurant business so you can successfully expand your restaurant without any worries.