You made it. Your dream restaurant is now open. It’s a success and you are well and truly in business.
All being well, fast forward half a year or so and you’re seeing regular queues out the door, a growing group of local customers and even consistent, positive cash flow.
Similarly to the many restaurant investors, owners and operators we meet you may perceive the next stage in this journey as working towards a multi-site operation. After all, the vision was never to end with one or two restaurants, was it?
Many dream of the day when their once humble restaurant has successfully transitioned into a nationally recognisable chain. And for good reason, with more restaurant units comes a larger scope to make a profit, provide jobs, scale your organisation’s purpose and have an overall greater impact on the world.
But why not just stick to one restaurant and do it well?
If finding success in the hospitality sector wasn’t so challenging at this moment in time we would say that independent restaurants have it easy.
In most cases, the founders are in the thick of the day-to-day operations from the onset; ensuring that they have control over all aspects of the business while fostering an environment that maintains the exceptional standards promised to its customers and employees.
In the eyes of general public independents are endearing as they offer a unique but honest destination for consumers to spend their dining dollars. The growing preference for restaurants who support local communities and economies presents a challenge to corporate chains who can sometimes find themselves fighting an uphill battle for public trust and positive brand perception.
Whilst we at Hospitality Mavericks will be the first to tell you that not all restaurant concepts are designed to (or should) scale, there are undeniable opportunities associated with scaling your restaurant business.
If you are a hospitality business that is serious about pushing your purpose, for instance, you have probably considered the fuel that scaling your restaurant could add to your mission (although don’t be fooled that independents can’t have a serious impact — see Moshimo’s FishLove campaign!). In terms of the financials; the commonly referenced profit margins of 10% suggests that a great way to increase profitability is via scaling your restaurant’s bottom line.
A common misconception that we see within our industry however, is that scaling a successful restaurant is just the replication of opening the first unit — ‘If everything went well the first time we can just repeat the process, right?’ Unfortunately, this is merely the beginning and scaling your restaurant concept brings a range of complexity that will put your venture at a newfound risk.
Being a team of hospitality and restaurant consultants, we spend much of our time anticipating the needs of our clients and prospects; trying to ‘see things through their eyes’. Having worked in the industry ourselves helps with this and we understand that cash is tight and investing in specialist support is by no means an easy decision.
And whilst blogs titled ‘X things to look for in a company that does exactly what we do’ appear more blatant in their sales-oriented motive than your average blog, we believe that restaurant owners can find value in what we’ve thought long and hard about -three important characteristics to look for in a hospitality and restaurant consultancy when growing your restaurant business.
#1 Credibility & Competence
It is crucial to choose a hospitality consultancy who have relevant hospitality and restaurant experience. Those who have worked as a waiter/ waitress, manager or GM role will not have the competence needed to mitigate the range of risks of scaling your restaurant. Such individuals will have an ability to grasp the inner workings of your restaurant from a practical and hands-on perspective, but this will only amount to a base-level understanding of how to successfully scale your restaurant. You have this knowledge already so why pay for it?
To ensure that you minimise the many risks of scaling your restaurant business you need access to consultants who have a proven track record of successfully scaling restaurant businesses. Which is why it is important that whilst you are in communication with restaurant consultants you find out:
- How they’ve successfully scaled restaurants before;
- How they would use their knowledge and experience to approach your unique situation;
- What is their process?
When screening their credibility with the help of Google, find out what previous clients say about them. Testimonials and social media activities will be a good indication of whether their values align with your own. Do they give you confidence that they will be able to design, implement, improve and calibrate your restaurant systems? And will they do so with the utmost care for your restaurant’s brand and core values?
Credibility and competence can also be identified in a consultancy who are able to quickly and accurately understand and articulate your concept, local market, where you’re currently at and the commercial environment of where you are taking your concept. No consultancies will have dealt with your unique situation before, which is why it is crucial that you receive a transparent proposal that addresses this before you commit to paying for their help.
#2 Honest (about where your business is at)
An uncompromised adherence to being truthful — even if it means that jeopardising their opportunity of working with you.
This is characterised in consultants who make a judgement based on more than just the growth stage of your business. We’re talking a real deep-dive into your organisation to understand where your successes have come from and whether scaling is the right move for you at this moment in time.
A stellar consultant will understand that their primary responsibility is to ensure that unnecessary risk is minimised in the scaling process.
When an independent restaurant is thriving, it’s understandably common for a restaurant owner to look to scale their successful restaurant as quickly as possible. Consultants who empathise with this yet place the long-term success of your restaurant at the forefront of all scaling decisions will be crucial in you avoiding costly mistakes in the scaling process.
Beyond the morality and ethics, a good advisor will know that scaling a restaurant that is not ready to scale is massive on their time and resources too.
Be cautious of consultancies or ‘experts’ who claim they can guarantee the successful expansion of your restaurant concept without knowing the depths of your offering, operation and inner business culture. Without taking the time to understand such components of your business, it is unlikely that they can make an accurate judgment on your restaurant’s potential for growth nor where they can add value to your situation.
Patience is key — find a consultancy who is eager to learn the depths of your business before working with you.
#3 Profitability Driven
Consultants that have short and long-term profitability as the single most important criterion for all business and expansion decisions.
As we’ve said in our previous blogs, podcasts and public speaking events: profitability trumps everything, and this couldn’t apply more than when you are investing a huge amount of time and resources into scaling your restaurant business.
Scaling your restaurant will subject your business to a newfound financial risk, which is why it is important that you have a consultant who can play an active role in advising you on the financial implications of the decisions that you will be making. By doing so, they should help you to become more operationally and financially efficient.
Find a consultant who can communicate the numerous steps they will take to save your business money. Maybe they commit to helping you find suitable premises based on a transparent location feasibility study…
If they have thorough experience in scaling restaurant businesses before they should be able to negotiate favourable rent terms for you — helping you to avoid one of the most common and costly mistakes that restaurant owners make during the scaling process.
Other ways of growing your restaurant business
As mentioned, there are some great reasons to consider scaling your restaurant business, whether that means taking your first unit to a second site or turning your 3–5 unit restaurant operation to 10+ units. At each growth stage of the scaling process, you are going to experience new complexities, challenges and opportunities.
If like many hospitality businesses you seek external help, ensure that you find a consultancy that has experienced a situation similar to yours — check their credibility and question them until you are certain of their credibility and fit for your business.
Give them an opportunity to judge your situation, be completely honest about your restaurant’s current state and scaling suitability. Above all, you must feel assured that they are going to put the short and long-term profitability at the centre of all decisions in the scaling process.
If scaling your restaurant through opening new locations is not the best thing for your current situation then look to other ways of fueling the future growth of your business:
- Forge meaningful connections with the local community (cause marketing) and seek valuable partnerships with smart and good people;
- Menu development (maybe downsize and do it well — but don’t forget your concept!);
- Look for market opportunities (perhaps you could optimise your coffee offering to cater to the growing demand for specialist/ high-quality coffee);
- Explore restaurant tech solutions (we have seen clients achieve a large increase in orders through implementing their own online click n’ collect & delivery service as well as greater compliance and employee engagement through digitising their internal communications);
- Derive innovative social media marketing strategies and customer reward initiatives from data (Google Analytics, YouTube Analytics, FB Ads, TripAdvisor…)
Oliver is a business graduate with over five years experience working for globally recognised restaurant chains. Besides when surrounded by food, Ollie is in his element when he’s rethinking operational systems with the primary focus of maximising employee and guest experiences.
Michael is a heart-centred operations pro, who believes and lives by building hospitality and restaurants businesses from the inside out. When your employees love your company, your customers will love you — brand nirvana. He helps leaders and operators to build unique blueprints and business systems that create strong employee and customer experience, which translate into improved sales, profits and positive impact.