Growth is an interesting concept and for many Restaurateurs it often means only one thing, opening more venues. How else do you grow right?
Well I had the pleasure of attending a round table session with some very experienced and passionate Restaurateurs this week; who all spoke of growth but in very different terms. We spoke about reducing debt, increasing profits, marketing strategies and diversifying our revenue streams in our existing business. Not just pie in the sky stuff either. We discussed real life examples of growth strategies, in all forms, that were working and returning a profit for the business. It was incredible to spend a full day speaking with experienced Restaurateurs (one business has been open for 50 years), who all viewed growth as exactly that. Growing your existing business to be the best it can be.
My own personal experience also taught me that growth for the sake of growth, or growth based on ego, is never ever a good thing. We opened three restaurants in three years and very quickly realised our mistakes. Not only did we open three venues, all three were very different with absolutely nothing in common other than we owned them. It was a huge learning curve with many, many lessons to be learned. In the end though it led to financial strain, stress and put us on the verge of burnout. We sold one of those businesses very quickly, realising that the fast-unplanned growth was a mistake. We have just sold the second and will settle on this in the coming months, which leads us back to one venue, our original restaurant. Needless to say we took the scenic route to realise what we really want, one brand and one venue that is performing at its absolute best. So why was the growth experience so negative for us?
Well, growing three different brands in such a short period of time led to four main problems:
Increased debt. Our first business was not in a financial position to finance the growth of the next two businesses. It had only existed for 18 months. We had to get loans and this financial debt put enormous pressure and strain on us for the entire period of having all three venues. Our debt tripled and became too much to manage.