Knowing When to Expand Your Restaurant Business

November 21st, 2013

When to expand? Is always a tough question to ask yourself while creating your business plans for the upcoming year, or even for a two to three year plan.

As an experienced food service and hospitality management company, VSAG has guided many clients through the challenging process of restaurant business expansion. From moderate growth models to larger scale expansion strategies, we’ve learned a thing or two about timing, scalability, and consistency.

So, we asked VSAG Principal Dan Simons to dish on lessons learned and best practices to help with expanding your restaurant business. His answers below may not be surprising, but they’re coming from more than 20 years of experience in growing some of the biggest concepts in the business, and from leading the effort at his own consulting business.

Timing … is everything. One of the biggest pitfalls of growing too quickly, is not taking the time to have proven overall operational procedures and systems in place. If for example your management training and development systems are not established from the get-go, a dilution effect in management can easily occur, and therefore the concept won’t translate – either into another site space or another market.

Scalability. In order to scale up, Dan says, you need to break down. Breaking down your operational procedures into specific areas (such as: kitchen, front of house, back office, talent development, purchasing/finance, technology, and real estate/construction) allows you to then develop specific, detailed requirements for each area. Noting specific area requirements like training timelines, the number of dedicated area staffers needed to run the business smoothly, and similar concerns will prove crucial in contributing to successful growth. Furthermore, says Dan, its always more exciting to say “Let’s scale up and grow to five, 10, 50 units,” but that’s all a waste of time until you have one amazing unit that thrills employees, guests, and investors.

Consistency. The appropriate expansion rate of a restaurant isn’t necessarily based upon the popularity of a concept. Sure that comes into play, Dan notes, but popularity only lasts so long. Sustaining a great concept is not only about having a good brand and offering a compelling product, but to deliver measureable results it’s also about the resources and the people you have in place that are dedicated to maintaining consistency. Uniformity in the day-to-day running of a business is fundamental to long-term success, and the ability to guarantee future growth.

That’s sound advice, no matter what your business!

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