Things to consider before deciding to open your second location

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Is your restaurants successful and sustaining enough that you might be thinking about opening a second locations? Great! But it’s far too easy to assume that your success will skyrocket with a second location. Here are some things to consider before you pull the trigger.

Make sure you are financially robust.

It might sound like a no-brainer, but look at your finances, again, and again…and again. Make sure that you have saved enough money and are producing consistently good profit before you decide to open your second place. Nothing can be more dangerous or time-consuming than to open a second location, realize that it’s not working, and close it down.

Why is this brought up? Because it can be too easy a mistake to say that business is picking up so well, that we might as well open a second location or well my first location isn’t working as well as it should, maybe I should try a location in this area. But at that point, you are turning your business to an all-or-nothing gamble–a gamble that might prove to be far too dangerous.

Is there demand for a second location?

More specifically, you should at least ask yourself,

Do we have so many patrons that are  willing to travel all the way just to go to my place?

Is my establishment especially known outside of my local area?

You could ask more questions, but it’s important to determine where people are accepting of a second location. Whether you’re doing market research or just asking your patrons (of course there are more ways of gathering data), you should be absolutely sure that people are welcome, especially excited, for you to open your second location.

How about a food truck or a food trailer as an alternative?

While it’s more common that the phenomenon happens that other way around, in other words successful food truck businesses end up expanding to physical restaurants, it’s a possibility to open up a food truck or a food trailer instead of a second location. There are at least a couple possible benefits that rise from this:

  • You’re not stuck in just one location, so you get to see who in your region likes your establishment or not.
  • It’s another advertising method after you have exhausted your existing methods.

But you have to realize that a food truck or a food trailer is not a cost-cutting alternative. Depending on your proposed setup, mobile food vehicles can exceed the cost of restaurants. But if it’s not financially viable to open a second brick-and-mortar, at least you have an alternative.