You have raving reviews, you’re on a wait every weekend, and your staff is top-notch. As a restaurant owner, you are likely starting to wonder when to open a second location for your restaurant. This is an important decision that you shouldn’t take lightly. We are here to guide you through the decision making process.
How do I know I’m ready for a second location for my restaurant?
Knowing that you are ready to open a second location for your restaurant involves a lot of factors. Just because you are doing well at one location, doesn’t mean that a second location will do as well. The first indicator of success for a second location is having a thriving first location with a strong understanding of why you are enjoying so much success. Once you have that down, if you have the capital and a team you trust, you are ready to venture into opening a second location.
6 factors to consider when opening a new restaurant location
Do you have a good grasp of why your current restaurant is so successful?
There are a number of reasons why restaurants succeed, individual to each business. If you want to replicate your success at a second location, it is essential to really understand why your first location is doing so well. Is it the food? The excellent customer service? The fun atmosphere? Knowing why you’re successful will help you know if you can replicate that somewhere else.
Will you try to replicate your current model or create a new one?
What you are doing in your current restaurant is working. But that doesn’t mean you want to make an exact carbon copy of it somewhere else. That will depend on the market and demand in the new location. Some restaurant owners create a second location with an entirely different concept in the same geographical area, while others open a second location with the same concept in a different geographical area. You can also open a second location with the same concept, but with a few changes to encourage customers to visit both.
Looking for inspiration? Check out this list of restaurant types from WebstaurantStore!
Do you have a good location to open a second restaurant?
Location is one of the most important factors to consider. Do you have a place where you can open your second restaurant that is affordable, convenient, and gets enough traffic to sustain it? Will your current customers be willing to visit while you build a new customer base? Will current staff members be willing to travel there to train new staff and possibly work there permanently? There are many elements to consider when deciding upon a location and if you don’t have any good options, this might not be a time to open a second location.
Do you have staff that you trust to help you run both restaurants?
If you can leave your current restaurant to go on vacation for a week or more without your restaurant falling apart, the answer to this question is yes. But the need to bring some of your current staff to your new location for training purposes may change that. You can’t be in both locations at the same time, so it is essential to verify that you can hire and train staff to run the restaurants without your constant presence.
Are you able to put in the hours?
Opening a second restaurant is a lot of work. You already did it once, and you succeeded. Are you ready and able to do that again while also maintaining quality and service at your first location? Think carefully about the support system you need and make sure you have it in place before moving forward with your decision.
Are your finances in good shape?
We suggest working closely with an accountant or financial advisor to ensure you have the finances needed to open a second location. You should never use your first location to finance the second one. Treat your second location like a new business. Do you have the capital to open it without additional funding? Or will you need a loan or line of credit to open a second location?
How do I open a second restaurant location?
Opening a second location is similar to opening the first one. You should plan to treat the second location as an entirely separate business venture. We have compiled a basic checklist for opening a restaurant that you can use as a guide. You’ve done this before, so the process is essentially the same the second time around, but with the added complexity of managing your current location.
How do you manage two restaurants?
Managing two restaurants is significantly more difficult than managing one. You are going to have to step back and allow your staff to make some of the decisions that you are used to handling on your own. This requires a lot of trust and confidence in the team you have. It also requires the ability to hire new staff that you can trust equally. While you may be involved in the day to day management of the new restaurant more than the old one, owning two locations means you need to take on a role that is different from what you’re used to.
At Accounovation, we work with restaurant owners to help them improve and evaluate their financial situation. If you are thinking about opening a second location, we can help you evaluate whether it is a sound financial choice. Contact us today to schedule a free consultation to see if it’s a good fit.