Is it a good time to open a second location for your restaurant or bar?

Opening a new bar or restaurant is a real labor of love, especially considering the failure rate. Like lots of other businesses, you pour your heart and soul into a concept that you are sure everyone will love. And maybe they will. And maybe they won’t.

Communities, they’re capricious lovers.

If you’re one of the lucky ones, you’ll make it through and not just survive but actually thrive. If so, it can be tempting to expand and make the move into a new market. EVERYONE WILL LOVE THIS PLACE, right? This is a great attitude to have, but the reality is that not EVERYONE will love this place. You have to be strategic in deciding to expand and then choosing your location.

How do you know if you’re ready for a second location? I’m so glad you asked! Take a seat and ask yourself the following questions:

  • Are you financially stable enough to open another location?
  • Is there a market opportunity in the new location?
  • Will expanding help you lower your costs overall and increase your profits?
  • Are your competitors expanding?
  • Is there a competitor there that offers the same thing (a “substitute”)? Be realistic — to most people, a hamburger is a hamburger is a hamburger.
  • Is the competitor’s location better than yours?
  • Is there enough demand in the new location for your restaurant or bar concept?
  • Are you willing to put in the extra hours to get a new location off the ground?
  • Are you familiar with the local ordinances and fees required?

Any business person or consultant will tell you: it’s not a good idea to jump into a new market because “your customers said you should.” If you sell smoothies, and you want to open in a new city where there’s already a smoothie shop, you’d better be a) a lot better, b) a lot cheaper, C) a lot different, and/or d) in a much better location for pedestrian traffic.

If you can answer most of those questions in the affirmative, then you might be ready to expand your operation. So go do some research!

If you’re looking to get a feel for communities outside your area in which to start your new location, try a tool like ZoomProspector.com or City-Data.com. You can input information such as community type, population and labor force requirements, and ZoomProspector will find similar communities and even list locations open for lease. Be aware, as with any online tool, this is not a panacea for actual getting out and researching the community yourself. Experience is always king.

Also, check your state and city’s websites for more business location information. You can tell if the city seems inviting to new businesses if they are offering incentives to move there and if there are programs to help businesses succeed. Before making a decision, make an in-person visit and talk to local business owners to get their opinions. Talk to local commercial realtors; they should have all the traffic numbers, car counts and demographics for different locations.

Do it right, and adding a second location can be the first of many steps to even greater success for your bar or restaurant. Just be careful — you don’t want to hinge all your fortunes on a dream alone.

Matthew Chabe

About Matthew Chabe

Matt Chabe is the President of Chapter Two Marketing & Public Relations, an integrated marketing agency based in Bangor, Maine that helps startups and businesses around the nation maximize growth. He is a seven-year veteran of the U.S. Navy, an active SCORE volunteer, and drives way too fast for his own good. Matt graduated from University of Maine with a BA in marketing and a minor in psychology.