The restaurant industry is highly competitive. Any step you take regarding expanding it can make or break your business. So, it’s important to have a foolproof plan. Whether you are just going to start out or have been planning to expand to another location, you must make a comprehensive plan for it. While going ahead with such a thing, it’s always a good idea to first invest in learning and knowing considerations, this blogpost is just for that. Here, we will discuss the restaurant expansion strategy, expansion considerations, growth tips, etc.:
What is a restaurant expansion strategy?
A restaurant expansion strategy is a complete plan where a business can define how to increase its footprint, revenue, and presence in the market. It involves making a plan, collecting funds, choosing a location, formulating a strategy, etc.
When should you consider expanding your restaurant business?
If you are experiencing the following, it’s a positive sign that you should start planning to expand your restaurant business:
Profitability
If your restaurant has been achieving high restaurant profit margins consistently for a long time and you have a very strong average revenue, it means you are financially stable and ready to expand your restaurant further.
Customer Demand
Your restaurant is making headlines every day and has become the talk of the town. You are receiving positive feedback on your social media handles, your staff is being loved or you have positive reviews on your Google Business Profile? If yes, you better start planning to expand your business as people in a different location are awaiting you.
Operational efficiency
You have never had any problem running operations in a smooth and efficient manner.
Market Opportunity
If people are demanding your specialty in other locations, and there is a market gap, this poses a perfect opportunity for you to seize the gap and take advantage.
Brand Strength
Your brand has a stellar reputation, and you are flawlessly attracting new customers almost every day.
Resource
You have a sound reputation, capital and management staff to sustain your new expansion.
How can a restaurant expand?
Now that we have discussed when to start considering expansion, let’s move on to the next step, which is making your strategy:
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Increase the existing capacity
You need to start out by expanding the existing restaurant space. For this, you need to take the premises over the next door. You can add up a special room and organize private parties over there. You can build a patio and create a luxurious outdoor seating arrangement. To attract people to come, you can collaborate with music bands and enhance the dining experience.
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Ask people’s opinion
We hope the above-mentioned step helped you get a sort of famous around your locality, and we assume you already have a good presence on social media. Now, you can run polls or interactive posts regarding how customers feel about your restaurant. You can also post stories or conduct live sessions about whether out-of-reach customers would love it if you came to their city. Analyze their response and start hyper-targeting your new audience/prospects. Now inform them when you will be arriving in their locality. Create excitement among them. You can do so by releasing discounts and special offers or leveraging your unique selling proposition in this case.
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Now it’s time to open the restaurants
Start expanding to different locations where the demand for your specialty of food is quite off the charts. Make sure you are consistent across all your serving locations in terms of food, ambience and customer experience. This is because, sooner or later, people will start giving reviews about how they feel about your new endeavour over social media. If it’s done in a positive way, it’s going to be a boon for you; on the other hand, if it turns out negative, the news will spread like wildfire, which can even lead to the failure of your expansion plans. So, be careful about the consistency point.
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Focus on new revenue streams as well
You don’t certainly have to expand the premises and open the restaurants at new locations at great risk when you can simply add new revenue streams like online ordering systems, restaurant merchandise, catering services, event organizing, etc.
These methods can sustain your popularity while also increasing your sales, profitability and reputation without any physical expansion.
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Create delivery-only restaurants
Another fab idea is to open a delivery only restaurant. It will be cost effective, all you need to prepare for our host kitchens. There will be no overhead costs like the dining area’s rent or utility bills. You just need a robust and user-friendly website to run this model.
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Open a food truck
Lays has recently come up with a unique concept of opening food trucks where people can get dishes prepared from their snacks. This signals how unique ideas are being loved by peers. Make sure to station your truck in busy locations like near office buildings or colleges and universities.
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Franchise your concept
You don’t always need to bear all the expense and risk as you have cool ideas like franchising your concept. It’s a powerful way to expand your restaurant business to new locations. This is certainly good when your first restaurant does quite well. You can use its reputation and name to replicate the concepts in multiple new locations.
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Enable online orders
Today’s consumers expect you to be able to make home delivery. For this, you will need a restaurant mobile app to make the ordering process smooth for customers. You can also come up with QR code menus. These types of menus allow the customers to view the menu and place orders directly from their mobile.
Summing Up
Don’t forget to leverage cross-promotion (the use of one product/service/location to promote another). You can do this by using the existing locations to promote your new locations. Social media, in-store promotions, and restaurants provide a great way to encourage your customers to visit all your restaurants. Also, you can consider partnering up with a restaurant marketing agency which can help your brand grow in the future.
