The Cost of Expansion

My wife and I had been enjoying a great meal at our favorite local Italian restaurant when the owner — doing his usual meet-and-greet stroll through the dining room ­— stopped by.

After some causal banter, I had to offer: “You know Franco, you’ve done such a great job with this place. We used to come here before you expanded into this new room (which almost doubled the size of the restaurant) and we were worried the service or the food would go downhill with all the new volume. It hasn’t one bit. I’ve heard of lots of restaurants and other business that really falter, or even completely fail, when they expand. How did you do it?”

“First off, thank you,” he replied. “I put a lot of thought into the expansion, and I took on a lot of financial risk. We knew the customers were here because you guys were lining up out the door every Friday and Saturday night but, like you said, we had to handle all the new tables after we expanded. You have to have a good amount of money to lay out when you expand. The minute you sign the lease on the new area, you’re paying that money every month and, until you have it opened for business, there’s nothing coming in against it. Of course, there’s also lots of money going out to the construction company we hired to do the remodeling.

“So the first issue is you have to get the space ready. I had some trouble with that because, even though I took my time, did my research and hired what I thought was a good company, it didn’t work out. You see that light up there? You see how it’s not centered above the window? That’s not what I wanted, and there were a bunch of other things like that too. So I wasn’t getting the results I wanted and everything was taking longer than promised. As I said, every day this place wasn’t open was money lost. So after I gave the guy a few chances to get going, I told him to pack up his stuff and get out. I was done.

 

“So at that point, I had to find another contractor to finish the job,” he said.

“I bet there aren’t many that want to jump into someone else’s mess,” I said.

“No, but I managed to find one. Those guys worked morning and night and had the place ready very quickly. I was really happy with them,” Franco said.

“Now the other thing is that while I was getting the space ready, paying the rent and the renovation,” he continued, “I decided to hire the wait staff that would handle the increased customers. I knew of other restaurants that waited until there were customers to serve and then hired the new staff but, even if they have experience, they don’t have experience here, with me. They don’t know the way I do things, and I don’t know the way they do things. So I hired three waiters about three months before we were planning to open the new space. I didn’t really need them at that point so, again, I was paying out money, but when the space opened, they were ready to start, up to speed. I wound up keeping two of those waiters and decided to let one go.”

“So what’s been the key to running a good restaurant? You’ve been doing it at least since we moved here in 2010,” I asked.

“We’ve been here since 2008,” he said. “I think the key is, I want everyone to have a good meal and enjoy themselves when they come here. Of course, there’s the business stuff, but I think that’s the main thing ­— I want to see you and your wife have a nice time here,” he said.

“We always do,” I said.

“Well, not my family,” he said laughing. “I love my customers so much that one night I shooed my wife and kids out because we needed the table. And I swear it wasn’t about the money.”

“You’ve got to me kidding,” my wife offered.

“No. I kind of had their stuff wrapped and rushed them out,” he said.

“I can’t imagine she liked that,” my wife said.

“No. She didn’t talk to me for three days. I won’t do that again – it wasn’t worth it,” he laughed.

Fortunately, because Franco had put the necessary time, money, and thought into his expansion plans, most of his other customers talk to him plenty. And if the past is any indication, they’ll continue to do so.