You’ve established a pop-up or food truck, and people are eating it up. But how do you know if and when it’s time to make the transition to a full-blown brick-and-mortar restaurant?
Pop-ups and food trucks are a great way to prove your concept on a lower budget before making the big, expensive, and risky jump to opening a restaurant. You get to experiment, begin building your brand, and see how guests respond to your product in real-time — all while learning and making adjustments along the way.
But after a certain point, you’ll likely want to scale your business to match your ambitions and the growing demand that comes with a successful proof of concept.
“Around when we started, we did a pop-up at a brewery, and when we had the combination of beer and croquetas right there in front of us, that’s when we immediately knew we needed to scale,” says Alec Fernandez, who founded Dos Croquetas in Miami, FL along with his aunt, chef Vicky Carballo. “We wanted a place where we could provide a greater face-to-face guest experience. It just obviously takes time to build up capital and have the creativity to design something that’s going to work.”
Below, we share some of the steps you can take to successfully scale your pop-up or food truck operation to a brick-and-mortar restaurant.
The Restaurant Expansion Checklist
Learn how to expand into your second, fifth, or tenth restaurant location.
1. Make sure you’re ready
Outside of the gut feeling that you’re ready to own your own establishment, there are more concrete signposts you can look to.
The first is demand. Have you built an audience? Do you have loyal repeat customers? Is there word of mouth buzzing about your operation? Before you scale, you need to first take the time to build demand for your business and product. Prove its success in a pop-up or food truck format, so that when you do open a brick-and-mortar, you’ll have a built-in audience.
Alongside demand comes brand awareness. Does your business have a distinct brand, personality, or product? What makes you different and how do you stand out from the fleet of pop-ups and food trucks opening every day? Carefully think about how you can build your brand, position it in the market, and develop your brand voice. Then think about how you can amplify it and market it to guests — first as a pop-up or food truck, then as a brick-and-mortar restaurant.
You can also test smaller ways of expanding before opening a restaurant. This could come in the form of a second food truck, delivery options, or event catering.
There’s also a certain level of mental preparedness needed to scale. Like starting a pop-up or food truck, there’s no guarantee of success when opening a brick-and-mortar restaurant. But a restaurant comes with a whole new wave of risks, so you have to be comfortable with the uncertainties that lie ahead.
Fernandez shared his biggest piece of advice for restaurateurs who want to make the jump: “I think it boils down to perseverance. It’s a matter of not giving up — no matter what. There were days where we were so exhausted and tired, and it’s hard when you’re not an established concept or brand yet. But the second you give up or stop is the second you’re screwed. Perseverance really pushed us forward.”
2. Collect feedback from your community
Before scaling your business, talk to your customers and the local community to collect any feedback or suggestions they may have.
Erik Metzdorf, Owner of Metzy’s Taqueria in Newburyport, MA, did just that. He told us, “We rarely do boost or promoted posts on Facebook, but we did when we asked people what they thought of us opening up in the space we’re in now. And this was long before we signed the lease. It was our single biggest Facebook hit to date, with thousands of responses. Asking questions and doing what you can to listen to your customers and community and incorporating their feedback into your plan is so important.”
Irene Li, Co-Founder of Mei Mei in Boston, told us that her sibling-owned restaurant did something similar after deciding to scale the business. “We talked to food truck guests to find out where they lived and worked and would like to see a Mei Mei location.”
3. Build a top-notch business plan
Without a business plan, you won’t be able to scale your concept to your dream restaurant. Your business plan is a blueprint that outlines your entire vision for your restaurant. It explains how your new business will take shape and operate once the doors are open, providing you, your team, stakeholders, and investors with an organized plan of attack.
A restaurant business plan is necessary for securing potential investors. Unless you’ve built up a ton of capital and are able to swing it on your own, you’ll likely need to attract outside capital — more on capital below — from investors. Before they invest in your restaurant, they need to buy into your vision. A business plan clearly lays everything out and shows you’ve thought everything through.
4. You’re going to need capital
Building up enough capital to scale your pop-up or food truck on your own isn’t easy, and, as you probably already know, opening a restaurant requires a hefty sum of money. If you don’t want to go the investor route, you have several options for restaurant business loans — from equipment and technology loans to working capital loans to lines of credit.
When searching for restaurant capital, look to lenders like commercial banks, credit unions, and even your point of sale and payment processing partners.
5. Find the right location to put down roots
When Mei Mei decided to scale to brick-and-mortar, Li told us, “We started keeping our eyes out for property almost immediately.”
Like Metzy’s and Mei Mei, you can talk to your customers to find out where they’d like to see your brick-and-mortar location. Find out where they work, live, and hang out. Outside of more hands-on surveying, you’ll need to do research on the demographics, market, and competition in your area. You’ll also need to do as much research as possible on the restaurant spaces you find.
You can buy an existing restaurant space, or you can build your restaurant from the ground up. You should also consider whether you want to own or rent a space. Do what makes the most sense for you financially.
For Dos Croquetas, moving into an existing restaurant space that was already fully equipped was crucial. Fernandez told us, “We would have never done a brick-and-mortar restaurant if it wasn’t a second-generation space. Because who has $300,000 lying around? We built this from scratch and didn’t want to give up part of the company to an investor.”
6. Apply for licenses and permits
If you own a food truck, you already know the challenges involved with acquiring licenses and permits. Same thing goes for restaurants — applying for the necessary licenses and permits to open a restaurant involves significant paperwork and patience.
Depending on your concept and the city or state where you open your restaurant, the necessary licenses and permits you’ll need — and the costs to acquire them — will be different. Some licenses are required for every restaurant (i.e. business licenses), while others depend on your restaurant concept (i.e. liquor licenses).
Licenses and permits take time and money to acquire, so the earlier you can start procuring them, the better.
7. Be prepared to manage the maintenance and facilities of a restaurant space
A restaurant comes with a totally different set of challenges in the form of facilities and physical infrastructure — from equipment maintenance to cleanliness to heat and air conditioning. You may have built an established brand and created a loyal base of customers, but if your new restaurant isn’t in good physical condition, you’ll lose a lot of goodwill — and customers.
Li told us, “I think the biggest challenges were learning how to manage the facilities aspect of the space — that was just a lot of stuff we’d never done before — and figuring out how to translate the very casual food truck vibe to a physical space.”
Think about ambience and cleanliness. Before opening your restaurant, have at least a light facility repair and maintenance strategy in place to make sure customers walk out of your restaurant with a positive impression. You don’t want them leaving wondering why your lighting is too low or your A/C isn’t working; you want them to leave delighted by the experience they just had.
8. You need a great team
You may already have a great, dependable team you can trust, but the amount of staff needed for a pop-up or food truck is much smaller than what you’ll need for a restaurant.
To open a brick-and-mortar restaurant, you need to think like a brick-and-mortar restaurant owner: How will you expand your team with this bigger operation? Who will you hire to help manage staff? How will your hiring plans evolve as your business grows over time?
One of the most complex challenges restaurateurs face today comes down to restaurant staff. According to the 2019 Restaurant Success Report, restaurant professionals listed staff hiring, training, and retaining as top challenges to the success of their business. To stay ahead of these challenges, think about the different staff management models you can employ.
Fernandez of Dos Croquetas told us that, even if you don’t have experience hiring or managing employees, you’ll find a way. “I think it boils down to survival — you have no choice but to make it work. We’ve never done this before, but you learn as you go. When you have a dream and put yourself in this position, you have to figure it out.”
9. Upgrade your technology to match your new restaurant
Bare-bones technology may have gotten the job done for your business before, but with the move to a restaurant, you’ll need the technology to match your vision.
Guests expect technology in their restaurants now, and according to the 2019 Restaurant Technology Report, 95% of restaurateurs agree that technology improves business efficiency.
To be successful, you’ll need a robust, reliable POS system that offers pay-at-the-table devices, online ordering, inventory management, guest feedback options, and much more. It’ll help to alleviate a ton of stress and help you run your business much more efficiently.
Metzdorf told us, “I believe that buying into the technology and fostering it is fundamental to long-term success. You have to have the right product and menu — that’s first and foremost — but technology should be top of mind after that.”
During the big shift to brick-and-mortar, don’t lose sight of why people fell in love with your business and products in the first place. With a larger operation and more capabilities, your ambitions will really take flight. Stay true to your concept, and it’ll only increase your ability to succeed and thrive.