You own a restaurant / café / cloud kitchen / Home kitchen, right? And You want to grow? To scale up, to multiply, correct.
But all your plans to grow have failed so far, making you quite frustrated and dejected. I don’t blame you for all these failures.
Because for you, the reason to expand was quite simple. You launched your first restaurant, it was successful. Customers loved it. Many a times, they have asked you to open another branch in some other locality in the city. You were also quietly thinking about it. The economics was also simple. This restaurant is generating monthly profit of Rs. 1.5 lakhs plus. So, 2 restaurants will make it cool 3 lakhs. 4 restaurants will generate a whopping Rs. 6 lakhs monthly profits, and so on.
The decision to expand was never complicated, it was a no-brainer.
So the moment you saw a property listing in that neighborhood, your heart filled with joy. Now that dream of multiple profits seemed a reality, and you booked the property.
You wanted even better interior than the present restaurant, and make it more trendy. And you launched your second branch in a bigger property, paying more rentals, and spending more money hoping to create an improved version of your brand.
And you launched with inviting local authorities and politicians, and offering free coupons to public.
All seemed to go so very well, in a picture perfect manner.
Except the profits. Or, the sales.
First month, the sales was not as expected.
You hired a digital agency for marketing, even tried engaging with influencers.
Still, it didn’t happen.
After 3 months, sales did pick up, but you are still struggling with profits.
You have absolutely no idea where did things go wrong?
What was missing?
The answer is, You.
The only thing which went wrong that “You didn’t clone yourself”.
Had you cloned yourself, the second restaurant would also have done great.
But that didn’t happen and now you are bearing the consequences.
Here, take a moment to decode what I am trying to say.
Who are you? Why do you need to be cloned? What does it mean?
The first restaurant is doing well primarily because of you.
You are there, to ensure product quality.
To control your staff. To prevent employee malpractices or thefts. To take care of customers. To listen to or resolve their complaints. To build relations with them.
You were performing these functions within your first restaurant.
These functions need to be performed in second restaurant also. Right!
Who is doing it there?
If you are spending 1-2 hours daily in second branch, that is not enough. These functions are full time. And because you have spent some time away from your first restaurant, very soon, first restaurant will also start slipping.
This is the biggest roadblock for expansion in restaurant business.
The Processes and Controls.
In other words, running your Business in “Auto-Pilot” mode
But it is not just some magic word, it is a series of steps which you need to take so that your restaurant can run without your active involvement.
You need to learn it, practice it, fine-tune it before you open your second branch.
And it has a sequence, which is important to follow.
What is the sequence? I will decode it for you.
Ask yourself “Can I leave my restaurant and go for a vacation for 1 Day”
Probably your answer is “No”. Now ask “Why, what will happen?”
“Maybe my staff will steal cash, or not report actual sales”
“Staff may also mismanage inventory”
Product quality may suffer”
“Customers may complain about pathetic food”
And so on.
Did you notice? Your first two reasons are related to employee theft or fraud. You need to take care of that first. That is also the first step towards internal control.
Once you have theft or frauds under control, then use the same control systems for efficiency. You just don’t want to prevent frauds, but you also want to maintain efficiency, correct. So, use the same process controls to manage food quality or customer complaints and some other important parameters related to your business.
Once you have these controls in place, you can go for a one day vacation.
Next Stage: What if you want to go for a one month vacation?
What will be your fears and apprehensions then?
- How will the sales happen?
- Who will check the purchases and deal with vendors? That’s another area where frauds can happen.
- Who will manage the food costs consistently?
- How will I know what the business is doing even when I am away?
The answers lie in the same processes and controls. But implemented and practiced on a larger canvas. Also, supplemented by a robust Management Reporting and review system, which makes decision making laser-sharp and targeted affair.
It is a long journey. If anyone tells you that you can do that in one month or one week, it’s a scam. It’s a matter of practice and your level of discipline decides how much of “Auto Pilot system” you are able to implement.
Unless you do this, all your expansion efforts will fail miserably. You may get lucky in one or two cases, but largely, you will suffer.
Whether it is your own branch, or your franchise, or your JV partner, or any other mode. No expansion is possible unless you have processes and controls established.
Where do you start?
Obviously, go back to your first fear.
Take care of that. Install processes and systems to prevent theft / frauds in your restaurant.
And no, CCTV is not a system.
Software is not a system.
Policy is not a system.
System is what you do once you have the resources and policy defined. It is after installing the CCTV, and the software, and defining the policy. A system is what happens after all this is done.
This is what you need to do.
Good luck in your efforts.
Your Growth Coach,
Randheer
P.S. We run a customized program “Theft Proof Restaurant” level 1. This takes care of all your theft / fraud related apprehensions and helps you take better control of your restaurant operations. Check out the details here.
P.P.S. This programs talks about 8 control systems to make your restaurant completely theft-proof. And you can implement everything in as early as 3 days. Check out the details here.