When to Open a Second Location for Your Restaurant

When to Open a Second Location for Your Restaurant

If you have a restaurant business, chances are you will not sit on your laurels and be satisfied with having only one branch. When the revenues from your first location are large enough, you would want to expand and open another branch.

Perhaps you have even called a commercial contractor in Utah already to help you in building your new restaurant branch. But, have you thought about the following things thoroughly?

1. How healthy is your first business?

Before you push through with expanding your restaurant business (perhaps after someone has told you that your menu would likely be a hit in that place), make sure that your first branch is doing well. If not, you would hard a tough time. You will be trying to balance two businesses at the same time.

Make sure that your first business is profiting and profiting well. If not, then either make it thrive and forego opening a new location or close it down and then open a new branch in a different area.

2. Why do you want to expand?

This is a question that all entrepreneurs should ask themselves before they expand their business. It is important because a lot of people think it is that easy to build more branches.

If your first restaurant became popular because people loved your home-style cooking, then that means you should do the same to your other branch. The problem with this is that you need to manage two units with the same intensity and meticulousness, which will be difficult.

If you are open to having another person manage your one restaurant branch, you should figure out if teaching him your secrets on how your first restaurant became successful is worth the risk. If you let another person run your other business, he will have to know every detail in managing your restaurant for it to succeed.

portrait of a woman standing in front of the restaurant

3. How much money do you have?

When opening your next branch, you should have enough cash from your first restaurant to help the other one operate until it becomes profitable. So, assess your current restaurant and see if it is profitable enough that it can stand on its own and shoulder the expenses of the other branch.

4. Have you researched the other location?

When you check out the other location, it should be not just to check out where you want your restaurant to be situated in. You should also check out the foot traffic in that area and if you have ample parking space for people who are driving.

You should also evaluate your competition, if there are any. If you are opening a pizza parlor in a new location, see if someone else already built one there. Learn more about your competitors and know what their weaknesses are.

There are many benefits to opening another restaurant branch. But, always remind yourself to look before you leap and plan before you expand. This way, you will be just as successful with your second branch as you were with your first one.