Know when to expand your restaurant on the state lines
Most entrepreneurs take a high view of their business. In catering, this usually goes beyond the boundaries of their first restaurant. For some, it could just expand into a larger property. But for many restaurateurs, the ambition is for their brand to become a feature in the lives of diners across the country, and even around the world.
This type of expansion certainly doesn’t happen overnight, and few entrepreneurs have the know-how and resources to immediately open multiple restaurants in various locations. As such, the steadfast path to healthy, national expansion begins with stepping across state lines. It can be more complicated and risky than opening a new location in the same state. It’s no surprise that homeowners aren’t always sure they’re ready for such a move.
We’ll take a look at what elements may indicate it’s time to skip interstate extensions.
A restaurant may well be popular in the area, but that doesn’t necessarily mean crossing state lines is appropriate. It’s important to remember that there are many things that play a role in a restaurant’s success, not least of which is the reputation owners may have earned with members of the community. The way they run their business or present their food resonates with locals, but they haven’t necessarily built that same rapport elsewhere.
This means that before venturing into other states, restaurateurs should know if there is a demand for what they are offering. Sometimes this can be clear to out-of-town customers themselves. Especially in tourist towns, it’s not uncommon for enthusiastic diners to say how much they need what a restaurant has to offer in their community. Indeed, by maintaining an executive presence online, publish content—Videos, images, menus, blog posts – that promote their business’s unique approach, restaurateurs can gauge the reactions to out-of-state demand from subscribers.
However, it is perhaps more important to conduct solid, evidence-based research. It is essential to examine potential areas for expansion to understand if there is room in the new community for the restaurant’s approach to dining or the type of food it offers. Is there enough interest that the profits generated can justify the local rental costs? It would certainly not be a good idea to move to an area that already has well-established restaurants of the same kind. Along with the competition in the region, it is wise to reconsider the type of traffic that passes – are there a lot of visitors for tourism or events, is it mostly commuters who prefer drive-thru over meals seated?
Along with building demand, it is not a good idea to cross state borders until owners have established that it is practical and prudent to do so. In general, this can be helped by careful preparation. Food business entrepreneurs should seek legal advice on regulations different from those in force in their own state. Cleanliness standards, business licensing laws, and even certification requirements can vary from state to state. To stay compliant with the law, owners must take the time to understand the needs of the target state. Knowing this information can allow restaurateurs to start looking for the most qualified personnel to take care of the day-to-day management of the business.
From there, it is important to open provisional discussions with current supply chain suppliers. Are they able to provide service to the new restaurant? If not, homeowners will need to research what local equivalents can provide equipment, ingredients and services to the same high standards expected in their homes.
One of the most important practical things restaurant owners need to consider is funding. Understanding rentals in the new state, along with the various taxes, insurance needs, and local rates of pay, can help homeowners understand if they are able to expand in this location. Indeed, it is not only the current business liquidity that needs to be considered, but also the precise details of how customers are likely to pay in the new environment. Especially if the planned premises are in a larger city, an increasing number of customers will expect to make mobile payments rather than credit card transactions. In addition to having the device in place to make this possible, companies also need to ensure that sufficient cybersecurity protocols are in place to keep customers and the business safe. Executives should be prepared to offer secure Wi-Fi for guest use and use apps with strong encryption.
Restaurants don’t succeed because of the efforts of one entrepreneur. The people and support system that surround the business are one of the main contributors to effective growth. As such, food service owners should only consider expanding across states once they’ve built a strong and trustworthy team.
This will likely include staff who can unilaterally manage the current location of the restaurant at times when the owners are overseeing the operations of the new premises. Conservators will find this especially vital in the early stages of the expansion where their time and attention will be largely focused on getting the property ready for opening and making sure everything runs smoothly afterwards. Indeed, it may be wise to promote trustworthy staff members to managerial positions in the current location and if workers are willing to relocate to the new state.
Equally important is establishing a strong network of reliable freelancers and temporary workers to undertake the activities leading up to the opening of the new site. There will be a lot of small but important tasks to accomplish that homeowners cannot handle on their own. Outsource these aspects, particularly specialized tasks Such as graphic design, website management, and installation of security systems will save owners considerable time which can be better spent overseeing those elements of business operations that benefit from their own expertise. Using freelancers also tends to make life a little less stressful during a time when the pressure can be overwhelming.
Opening a new restaurant in a different state can be a daunting prospect, but ultimately a rewarding prospect. It is essential to undertake sufficient research into the demand for services, prepare the elements that make the move convenient, and build a strong team to help along the way.
Jori Hamilton is an experienced writer from the Northwestern U.S. She covers a wide range of topics and, because she spent over six years in the restaurant business before writing full-time, is particularly interested in covering topics related to the food and beverage industry. To learn more about Jori, you can follow her on Twitter.