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Permalink Reply by Jacob Casella on August 15, 2010 at 1:35pm

The cafe I work for has slowly expanded (picking up speed now) from one location to 5 over about...15 years I think? I've been moderately involved with the opening of one store, and pretty heavily involved of the expansion of another. Some things are a headache--especially in the beginning. You want to make sure that both cafes get all the support and quality control they need. But beyond that I think it's definitely good times. Run out of something at one store, maybe they have it to spare at the other. Staff can jump stores to cover shifts if need be. 2 locations up your visibility, which ups your customer base. And, of course, the big one: economy of scale.

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Permalink Reply by Dr. Joseph John on August 15, 2010 at 2:23pm

Having many of our customers open additional locations and seeing some do well and others suffer, we have some observations to share. Perhaps the most important point is to transition successfully from a "people based" buiness to a "system based" business. Let me try and explain:

Single location cafes are often run as a "people based" business; i.e. duties are often assigned based on the individual staff aptitudes. For example, if "Charlie" does not like to keep track of inventories, then we let "Linda" do that since she likes it, regardless of what their respective job assignments are. Then when Linda leaves, and "Tom" is hired to take her place, one has to look for someone to take care of inventories, because Tom doesn't like it either. In simple words, here the jobs are tailored to meet individual's aptitudes.

Multiple location cafes have to be run as a "system based" business, where the established system defines the operation, altough a few exceptions are inevitable. For example, the morning shift supervisor may have specific responsibilities assigned to that job and as to who is selected to fill that slot depends on the aptitudes of the individual staff. It is the owner's responsibility to train and groom the individual to grow into that slot.

The best time to develop the "system" is when the first cafe is running well and one is considering the opening of second location. Develop and implement the system in the first cafe and fine tune it. Once the system has been suitably modified to make everyone comfortable, one is ready to open the second cafe.

Hope this helps. Good Luck.

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Permalink Reply by Jeff Hoeppner on August 16, 2010 at 12:37pm

This is great!! We are currently in the preplanning stage of our second location. I say "pre"planning because the building we are going to be opening in hasn't even broken ground yet. They're still in the planning stages, so we are just bouncing ideas off of each other. This is a great thread!!

A couple things we have considered. We need a different POS. The one we are currently using is great for a single location that isn't doing a lot of inventory tracking. For the second location, we will need a server based system with multiple terminals. The new location will have 2 terminals alone and our current location has one. The second location will have a drive through as well as 2 Slayers, a pour over bar, drip and a few other custom brewing methods. There just seems to be a lot more things to consider when opening a second location. It's more than just doubling things up. It's a matter of consolidating where possible, streamlining systems and more training.

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Permalink Reply by Jay Caragay on August 16, 2010 at 1:40pm

Dr. John's comments are spot-on. Prepare your systems. Your locations should be able to operate without you having to work the line to make it work. Read "The E-Myth Revisited" by Michael Gerber. Prepare yourself and know your vision and standards.

Do you have the right people? Do you have good people? People you can trust? People that can uphold your standards and execute your vision? If you don't, you're screwed.

Operating two locations doubles your reach but exponentially increases everything else. Hope you have a good bookkeeper. Make sure your relationships with your banker and vendors are solid. Have inventory controls in place.

One of the more interesting opportunities with a new location is the ability to try new things without upsetting your customer base. Wanted to give it a run with one size coffee? Now's your chance. It's easier to give than it is to take away.

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Permalink Reply by Marshall Fuss on August 16, 2010 at 9:46pm

Jay Caragay said:

Hope you have a good bookkeeper.

Who is bonded!

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Permalink Reply by Jay Caragay on August 17, 2010 at 6:01am

Marshall-

I haven't heard about bookkeepers being bonded. Can you tell more about that and why it's important and how it protects the business?

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