If you’ve nailed your brand, operating, and financial model, you should be looking to scale your business as fast as capital allows. Alternatively, if you want to learn how to gain new sources of revenue through extensions of your concept, please look for my other post on brand and company extensions.
But, if you are not at a point where those things are true, or you wonder if there is more you could be doing—this article is for you.
Growth seems harder than many of the other functions within restaurants. Most of the other functions involve the past or knowable areas. Food cost? Labor cost? We view them as fixed elements with levers we can pull with exact outcomes (whether that may be true or not).
Growth, on the other hand, involves the future. Despite some excellent tools, it remains somewhat unknowable. Despite this challenge, it’s often delegated to an area that lacks organizational clout and an understanding of how decisions will impact the company over the short and long term. Critically, the mindset has to be willing to take risks. For this reason, leadership engagement is critical.
Compounding all of this is simply that running restaurants is hard. It’s an execution business that requires tremendous focus to deliver day in and day out. This focus often comes at the expense of the future. By building clarity around a set of choices linked to growth, you give your organization of today and tomorrow a better chance to succeed.
Okay, back to building the volume in your restaurant. Let’s reverse-engineer how we drive unit volumes. Your restaurant is simply a function of the number of customers per period and how much they pay per transaction. So we have two levers—at least in the box. Customers. And spend per transaction.
You should be optimizing across all sub-categories within each (lapsed, current, prospects/mix, price / etc.). Constantly. But we are talking about sustainable growth, or we should be.
For a restaurant, the evidence points to only one way—increasing your penetration (the other way is to build a network effect that locks people in and cross-think Apple with their whole ecosystem).
So if growth comes from “new,” you can think about this over a short, medium, and long-term horizon, which in the world of restaurants would look something like this:
- Get as much as you can from current stores and current customers
- Build new stores and get new customers
- Identify ways to stretch your brand into new places
Which or how many of those you will be doing will likely be a function of the life stage of your company. You should clearly understand how much remains in each bucket, how hard it will be to get those results, and what resources it would require to make it happen. With that information in mind, you can begin to place your bets.
Managing across these three horizons (sometimes even within) will create tension in your company. Many companies get sideways here. In any effort to “just grow” or “do something,” they drift from what is true for that company.
This is where all the choices you’ve made come together. By understanding what is true across these horizons, you can build confidence in your ability to scale efficiently.
You do this by understanding the problems and jobs your current and prospective customers are trying to solve. Then, ensure that what your brand uniquely offers and how it uniquely delivers it can solve those problems similarly for both groups.
Ultimately, you will do foundational work across four areas and then utilize that platform in six business areas.
Your foundational platform will include:
- Clarity around who should use and when/with whom
- A brand that is relatively differentiated in the marketplace is meaningful to your audience and is easy to understand
- An employee value proposition that ties directly to the brand platform such that employees don’t experience cognitive dissonance—we are being congruent in what we are asking them to do
- Clarity about where and how you will distribute
You will leverage that foundational thinking into a set of connected choices:
- An experience that creates a sense of place that is easy to use and more emotionally satisfying—for customers and employees
- An offering that is relevant to those usage occasions at which you want to win pays off your brand and is priced consistent with your positioning
- A platform that can deliver at some level consistently
- A marketing engine that integrates these elements and can simultaneously generate and capture demand
- A culture, process, and measurement system that is aligned with the above and something that will work for your company
- A plan that shows how this gets activated over the planning horizon
So, your strategy and plan to win should differ from others because you will make different choices. I hear some of you thinking I can skip some of these. Do it at your peril. This is not to say you need to be excellent at all of them. But you will need to address them. Those things that you don’t openly and clearly address your employee’s will. This lack of alignment will create confusion, slow things down, drive employee churn, and, in general just cost you.
This may sound hard or involved. It doesn’t have to be. In many cases, my guess is that much of the information that would inform the choices necessary lies either within people’s heads or is readily available.
This is the last piece before we move into the foundational areas. When you finish this, you will end up with one of two things. I hope for a product that was built with the right level of engagement from key stakeholders and the right level of information informing them. Conversely, if it’s just you or a small circle, I fear this will not capture the hearts and minds that will help propel it forward. I strongly encourage you to work with the former.
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