• Cheryl Teo

Restaurant Expansion: Key factors to Consider Before Making the Move





The people of Singapore love to eat. Their appetite for good food has increased the number of food businesses. According to research, the total operating expenses of a food business in Singapore is $8,747 million (2016). If you happen to be an owner of a restaurant in Singapore whose business is doing great, then it’s about time you expand your business. I am sure the idea has already occurred to you before but just the thought of expanding your business makes you think twice. After all, being a business owner is in itself a very arduous task. Expanding your already running business is even tougher.


Food costs taking up 1/3 of your business spending?


Fear not because FoodRazor crunches the data from your digitized invoices to tell you what products you are spending the most on. With this, you can adjust menu prices, keep an eye on portion sizes and adopt menu engineering to identify which menu items are profitable.


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Here are some key considerations you will need to go through before taking this big leap.


Is it the right time?



First and foremost, time. It’s not just about how you feel like it’s a great day to expand and be like I’ll do it today! It also depends on a myriad of existing external factors. You need a crew of reliable and trustworthy staff. You can’t be present in two places at the same time. Therefore, it is imperative to have staff that you trust to manage your establishments in the most optimal way possible.


Another thing you need is a favourable season. If your business is in full bloom during the summer then perhaps starting on your expansion in spring would be a good idea. Preparation takes much longer than you can imagine. It will be a good time to spread the news earlier so that you can ride on the anticipation of your customers and generate more interest for your restaurant.


Do you have enough staff?



A reliable crew is hard to find. If we look specifically at the Singapore market, labour is scarce. And this shortage is especially significant in the food and beverage industry.


Singapore has been facing this situation for the past decade. If you are planning to expand your restaurant then take into account the fact that it’s increasingly hard to find kitchen and catering staff. The demands of local candidates are very high. For example, the demand for a head chef is around $5000 to $6000 per month while a dishwasher normally asks for $1200 to $1500 per month. On top of that, most of them are less willing to work long hours.


Build a proper business plan



It doesn’t matter if you are expanding an already established restaurant business or starting from scratch, no idea can be properly executed without a business plan. A restaurant expansion business plan will paint a clearer picture than having none. It will provide a better idea of your roadmap in terms of resources, finance, operation, and marketplace competition.


Always choose the best location



Location always matters. When searching for where to locate your new restaurant, do thorough research. The main goal is to attract new clients along while retaining customer loyalty from old diners. Make sure to situate at a venue that gets a lot of human traffic unless you’re very confident in getting a full-house of reservations.


Many restaurant owners also tend to compromise on the new location due to cheaper rent. But this does not necessarily reduce their operational costs by significant amounts and improve their business. Having your restaurant located in a more remote area reduces chances of walk-in diners and if your restaurant is yet to be a well-established brand this could cause damage to your profits instead.


Marketing strategy and maintaining standards



Another undeniably important factor is your marketing strategy. It doesn’t matter if you have an already established restaurant. If you don’t have a proper marketing strategy your restaurant expansion may not reap the results you expected. Mentioned earlier, building upon the anticipation of your customers for the new location could be one strategy. This can easily be done through social media at low costs. Advertisements on these platforms are optional, but hashtags alone can get you the reach you need.


Last but not least, always maintain your standards. Never forget your core values, the reason why you started this business because this is how you became successful in the first place. Customers hold great importance for all restaurants. Do keep that in mind while planning for the expansion of your restaurant business.


More tips: Along with your restaurant’s expansion, perhaps it’s time to think about why you should invest in technology for your restaurant business as well.

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