Open Three and You're a Mini Chain

By: Lloyd M. Gordon, President
GEC CONSULTANTS, INC.
Skokie, IL 60076

Part II

Last month we discussed some of the problems involved in going from one or two restaurants to a mini chain. I gave some examples of what a person like yourself might encounter on the way to becoming a successful mini chain operator. Let's look at a broad plan of action to minimize the problems that we can easily foresee. First, you will need adequate financing. Not only do you need money to properly create your new mini chain, but you have to have sufficient funds so that you do not have to dig into your current operating profits to support the development and growth of the mini chain. To do this you will need outside help. This can take the form of government supported loans, local bank loans, use of investment bankers or investment groups or private subscriptions. In any case you must set aside adequate funds initially to prepare correct documents including a detailed business plan to support your application for outside financing.

Second, you should have two or more locations or sites in the works so that you can move quickly to secure these sites when financing is available. You might refer to my article in the September issue of Food Industry News "Jingling Cash Registers are Wise Investments" and concentrate on leasing sites with options to purchase at a later date. It is wise, initially, to withhold heavy investments into real estate. It's better to keep your cash flow flexible.

Third, lock up your concept. Make sure that you are comfortable and confident with the concept so that you can easily reproduce and run from a distance. Major considerations are the menu, pricing structure, serviceability, ambiance, economic trends and bottom line feasibility. At this stage in your planning it is easy to change, alter, manipulate, revise and review as often as you wish at very low cost. But once you move forward and lock yourself into the concept changes become more and more expensive.

Fourth, plan an operation system that will work for you. Delineate exactly what you are capable of doing. Then develop a list of things needed to operate your new chain effectively. Assign those things that you feel you could do adequately for your own activity. You should hire key staffers to handle the remaining duties. They are needed to complete the operations system. Therefore a most important first step is to create job descriptions and specifications for these key staff people.

Fifth, locate and hire these key people. You must budget funds to pay them for a pre-opening period. You will probably need to stagger their recruitment according to what you determine is the proximity of when they are needed to the opening date.

Sixth, at any stage it is wise and prudent to attach an expert to your personal staff who is knowledgeable in mini chain development, who can advise you step by step to make sure that you are headed in the right direction, analyze your choices, provide you with options and warn of potential pitfalls, keep you focused and assist you in many other ways to achieve your ultimate goal: opening a successful mini chain.

Mr. Lloyd M. Gordon, President of GEC Consultants, Inc. has an MBA from the University of Chicago. He has concepted more than 390 restaurants and has been consulting for over 44 years. He helps people enter the restaurant industry, points the way to profitability, and helps keep them successful. To discuss "Open Three and You're a Mini Chain - Part II" he can be reached at 847-674-6310.

To Top

http://www.gecconsultants.com   email: experts /at/ gecconsultants.com
website design: websiterevamp.org