You’ve already, at least once, taken the steps to open a restaurant. But when you go to establish a second (or third) restaurant, it will require a few additional tasks that you didn’t have to complete the first time around.

We’re going to outline each of the five steps that you must take to open a new location:

5 Steps to Opening a Restaurant

We’re going to try and condense the many steps in opening a restaurant into just a handful that you can follow:

opening location

1. Check Your Financials to Make Sure You’re Ready

Opening a second location for your business requires you to have a strong business plan to follow, especially if you plan on securing financing. We’ll cover this more in step 4, but you still need to review your current eatery’s finances.

Are you:

  • Earning consistent cash flow from your main restaurant to justify opening a second location? If your main eatery is doing well, it’s a good sign that a second location may also be beneficial. However, if you’re barely keeping the lights on, it’s not a good idea to take on an additional financial burden.
  • Able to finance some of the upfront costs? If you have a thriving business, it can help fund your second location. It's better to take on less debt when opening a new location because, with current interest rates, it’s best to take on as little debt as possible.

If you have the finances, consider if you have the time to open a new restaurant. 

2. Streamline Operations to Not Be 100% Reliant on You

Who will run the second restaurant? During the first year, it’s always challenging to keep both eateries afloat because you’ll be working double-time. You'll need to roam from one location to another and try to find ways to make the company less reliant on you.

But if you begin this process of streamlining your operations before opening a second location, it will increase your odds of success.

You'll need to start with creating processes that you can follow, including:

  • Training
  • Financial management
  • Ordering supplies
  • Hiring

You need a manager who will handle the operations for you – at least part-time. If you’re doing all of the above yourself, consider creating in-depth instructions that someone else can follow.

Test out your processes by having someone else complete them.

Refine the processes so that the documentation is so thorough that anyone can take on your role with relative success. If you streamline processes, you have a blueprint that can be put in place for your new eatery.

3. Evaluate the Current Market

What is the state of the current market? Is the market in an upturn or a downturn? If restaurant goers are eating out less often, it may be best to wait until trends change. You'll also need to consider:

  • Real estate market and if it’s a buyer’s or seller’s market.
  • Rental prices and if the prices are affordable if you sign a new lease.
  • Job market. Is there enough local talent willing to work in your eatery?

Many locations are suffering from an inability to staff their restaurants adequately. If you’re expanding into one of these areas, you may find that there’s too little talent and you’ll always be understaffed.

4. Create a Business Plan and Secure Funding

At this point, you’ve determined that you have the numbers to support multiple restaurants and the demand is there for a new location.

But if you want to succeed with your venture, you need a business plan. A business plan will help you secure funding for your new location, but it will also ensure that you have a blueprint to follow to operate seamlessly.

Make sure that your business plan covers:

  • How the restaurant will operate
  • A current market analysis
  • Your business objectives
  • Financial projections

If you have a detailed plan, you won’t be running your business blindly.

Once you’ve finished your plan, you can focus on securing funding for your restaurant – if you’re not funding the new venture yourself. Your financial projections will be especially important in securing funding from investors. Make sure that you cover labor costs, renovations that may be needed, the cost of purchasing or leasing property and other expenses.

5. Find Your New Location and Get Setup

You have a business plan, and you’ve secured funding. The next step is to find your new opening location. It’s important not to rush this step because location is everything in the restaurant industry.

How do you find the perfect location? Here are a few things to consider:

  • Foot and drive-by traffic. Is the location easily seen from the road? Is it located in an area that receives a lot of foot traffic? If your restaurant is hidden away, you may struggle to get customers through your door.
  • Is there enough parking? If you’re running a full-service restaurant, customers will want convenient parking. Otherwise, they may just head to a competitor.
  • Does the interior space fit your needs? Is there enough room for the equipment you need to run your restaurant?
  • Competition. Are there other similar restaurants nearby? If the local market is saturated, you may want to look elsewhere.

Once you’ve found the perfect spot for your new location, there’s just one thing left to do: get set up and open your doors.

Getting your new location set up and ready for customers will take time and resources. Make sure that you have a timeline and plan to follow.

Don’t forget about the promotion of the new location. If you have a loyal customer base, don’t hesitate to let them know about your new opening location and encourage them to spread the word. Marketing and promotion will play a crucial role in your success.

Opening a new location is an exciting time for any restaurant owner. But if you want to succeed, you need to make sure you’re prepared. If you can secure the funding and ensure your new location can provide the same experience, you’ll be well on your way to succeeding.