Simply Business

Expanding Your Restaurant: 3 Key Things to Keep in Mind

Chef preparing a dishA majority of the current global restaurant businesses started as small businesses that had only one location. With time, they became successful, resulting in a need to open new branches. Soon, the restaurants broke domestic borders and became international brands.

When planning for the expansion of a restaurant, there are key areas you need to consider for the process to be successful.

1. Identify a source of the additional capital

Following the decision to expand a restaurant, the business managers face the challenge of attracting investors. The management could consider the available forms of restaurant funding offered from different financial institutions.
The funding could be in the form of loans or through the acquisition of ownership in the form of shares. It is important that the restaurant’s directors confirm that the lenders are capable of availing the resources in the required amount within the required period. An unsuccessful expansion process could hurt the brand.

2. Choose a suitable location

The selection of a suitable location applies where the expansion of a restaurant takes the form of opening a new branch. In such a case, it is essential that the new branch is in an area that guarantees an influx of customers.
The location of a new branch is very important as it determines the competitiveness of the business in relation to the already existing restaurants in the new location.

3. Evaluate the current MIS

Based on the restaurant’s organization structure, there might be a need to modify the existing management information system to accommodate the new branch.
The need for new infrastructures could accompany modifications of the system. You need to address all those requirements in advance before the expansion process begins.

A need for expansion is an indication of business success. However, the expansion process offers a risky situation that the managers must handle carefully if they are to maintain their performance.