Returning to Restaurant Expansion

If you’re operating a thriving restaurant business on the other side of the pandemic, that might mean you have a concept with legs to expand beyond your current location(s). Consider that around 60 percent of new restaurants fail within the first year. And nearly 80 percent shutter before their fifth anniversary.  

There is good reason to be optimistic about restarting restaurant expansion: restaurant sales continue to set records, the federal stimulus has added billions of dollars to company coffers, and commercial real estate opportunities are becoming more workable. So, if you haven’t already done so, let go of the grief created by the turmoil of the last year and a half and give yourself permission to dream about and plan for the future of your business.

Building a Strong Foundation

We all know that a house built on a crumbling foundation can quickly become worthless. As we return to growth, two types of companies will emerge: those made to last and those that will soon fall apart at the next sign of industry trauma. 

But, how do we get through the obstacles that, for many, have prevented that high-octane restaurant growth needed in the new economy? The answer is by building a solid foundation, establishing strong operational structures and genuinely knowing and leveraging your core competitive advantage(s). 

High-performance restaurant organizations are built on a foundation that includes a clear vision (an ideal picture of the future), a mission (the why the organization exists), and values (the core principles by which the organization will abide by, no matter what). Without those three things, your business could eventually be worthless (or, even worse, become a financial nightmare).

If each of these is clear, communicated, and lived into, it helps everyone make better decisions more quickly.  Vision, mission and values, provide the foundation for strategic clarity, operational clarity, team alignment, key decision making, risk reduction, and stakeholder connection. Altogether, they create stability for your restaurant expansion plans.  

How Organizational Structure Creates Stability

The structure of an organization is made up of all the things that put the foundational items into action. Because the structure is supported by the foundation, the more influential the structure can be if the foundation is sound. Conversely, a weak foundation will cause cracks in the structure. For any successful business to thrive, there are five fundamental structures you will want to have in place to grow. 

Here’s a look at each:  

  • Concept Clarity: Are you crystal clear about your concept, including the products you offer and the ideal format and location to serve your most profitable guests? 
  • Standardized Operating Procedures (SOPs): Are your SOPs documented for training and replication, including recipes, steps of services, BOH processes, etc.? 
  • Positive Culture and People Operations: Do you have a positive and compelling workplace culture that allows you to attract, train and retain top performers? 
  • Sustainable Financial Model: Have you consistently driven sales and control food and labor costs, creating a sound financial model and profit to propel growth? 
  • Foundational Technology: Do you have integrated technology in place that allows you to manage, scale and monitor your business in the accelerated on-demand world we now live in? 

By reviewing and, in some cases, re-reviewing your organizational structure, a new standard for growth will become clear. Through clear, honest assessments of each five, your brand foundation will be more solidly supported. This also will lend to a deeper understanding of what makes your brand tick. In other words: you’ll have a much stronger core competitive advantage. 

Knowing Your Strengths

If the roof protects the house from the external elements, the roof of your organization represents your core competitive advantage. This is your brand’s overall ability to stay ahead of present or potential competition and the results it drives. Sales, profit, customer sentiments, people retention, and operational performance are signs that you have a healthy advantage and will be able to keep track of where your business stands as it evolves and grows. 

This means overall, the stronger the competitive advantage and structure, the better results. The better results, the more your business is protected from threatening external elements of the environment.

Are you Ready to Dream and Grow? 

With each of these three above items firmly in place, you should once again begin to feel it’s OK to dream and grow. As an industry, we’ve been through an exceptional amount of change, and we should consider ourselves lucky for having made it through. 

Honestly, assess your business to determine your future goals and dreams. Do you have what it takes to grow a high-performing company, or are there a few things you need to slow down and address?  It’s important to remember; it’s not always the fastest to grow that win – some of the strongest brands in the industry have been built over decades.