Why do we as Restaurateurs consider opening another venue as our only avenue of growth?



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:

  1. 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.

  2. Increased stress. Three businesses, all bricks and mortar, all relying on bums on seats and all needing staff, led to all sorts of stress. Each venue needed something from us all the time; each venue with a different brand and concept needed its own identity and marketing strategy. Each venue needed staff back and front of house and not only was the recruitment hard, the retention and issues that come from managing people was now three-fold.

  3. Less attention. Owning three venues with three different brands and concepts meant we were completely stretched. We were a Jack-of-all-trades and a master of none. One business never had our full attention at any one time as there was other needs, demands and priorities that kept coming up and shifting.

  4. More mistakes. We were exhausted and as a result so many mistakes were made. Poor cash flow and financial management. We continued working with accountants who didn’t have our best interests front of mind. We were just too busy to find someone who could help and guide us to make the right decisions. We lost money as a result. We hired the wrong staff so customer service, product quality and consistency were lost. We didn’t design the menus, venue fit outs or order of service right because we didn’t have the cash, time or clarity to see that things were not right.

My own experience combined with conversations I’ve had with other Restaurateurs, tells me that growth doesn’t have to equate to opening more venues. Growth should be more holistic than that. I believe that a great growth strategy should contain the following goals first before committing to another venue;

Goal 1 – Get your existing venue debt free and have cash in the bank to open your next one.

Goal 2 – Make your existing venue profitable and have a great financial and cash management plan in place, that you can replicate if you decide to open another.

Goal 3 – Think about a diverse range of products and services that you can explore and implement to increase revenue streams so it’s not all about bums on seats.

Goal 4 – Get your existing restaurant or café operating at capacity and to its full potential so it is consistently brilliant and consistently profitable.

If you can achieve those goals then you are well on your way to opening another venue, if this is what you want, with less risk and increased odds of success.

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