‘To Expand or Not To Expand’
Podcast Key Note
Do you feel like your business needs to grow and expand into other location(s)? Or;
Do you just want to stay as you are; just keep on refining your business strategy, your business models and settle in one location?
There were times that my goal was to have four locations and actually I was able to secure 4 locations that is, 3 other locations including my current place , I felt like my main could kind of feed the other locations; to run lean with maybe 2-3 employee, no excessive overhead, no too much rent as the rents were cheaper –
We started up a location in Agungi, and another one at Lekki and one in ilasan because I thought there were lots of traffic there and I could tap into that market. So Agungi location is very busy with potential customers so first thing I figured was, let us have our brand BBQ & Cravings in that area since people already know about us. There were challenges and the biggest challenge I think I had was how to manage the place – you have staff but with no management team, only a brief random stopover like 10-20 min by a management member and they are off. The staff there were able to create a racket so they would report no sales almost every day. The way I was able to know there were problems there was after sales dropped for 3 consecutive weeks; I thought that I should close it down, pull the staff team back to the head office and then re-strategize. So we went to pick up left over inventory. It was then that we realized that they have under portioned the items given them and the excuse they gave was because they wanted to eat – imagine for instance sausage meant to be cut into 2 was cut into 3 and they ate the 3rd piece.
Still at Agungi location, I pulled another team, rebranded and changed the menu. We tried Kebabs because I’ve always loved it but i know now that it’s not about what i like. Sometimes bringing new product to the market is very good; you could have first mover advantage but the truth is; what is the culture of the new market you are in? So based on the lifestyle here, I kind of re-branded kebabs to – ‘not a Shawarma’ – because it was wrapped the same way as Shawarma but the idea was to give them something familiar but then with a different taste. Maybe I didn’t push the market well enough; maybe I wasn’t patient enough; so that also tanked.
Then I thought about dropping the menu down to 1k /1.5k range where we could get a bigger market and people walking by could get something. It was like a stir fried rice and indomie and egg…
Listen to the Podcast to hear about how we struggled with our Lekki 1 Location and we shut it down within 1 yr after erecting a structure
- I guess for those who want to expand, the question is why?
- Do you have the right team? Can you be consistent?
- And can you serve those customers any other way without having to open in those locations?
Anyways to expand or not to expand – some are doing it successfully and some are struggling. I think you have to decide which business model is best for you; what skills you have; what team and what resources you have – not just money because you probably need a strong team to help execute this and also does the market want that from you?
Think through it before you make that choice because a lot of people are packing up for one reason or the other. Your landlord doesn’t care, your employees don’t care, your account officer doesn’t care and your bank balance doesn’t care…
Key Takeaway Points:
- Sometimes bringing new product to the market is very good; you could have first mover advantage but the truth is; Does the Market want that product
- When opening a location be patient enough to push your brand to the right market and be careful the products you are pushing is the right fit.
- The idea that ‘you have to expand; you want to expand or that you can always recreate the success you have at your main location is not always true.
- Be sure to hold on long enough; don’t be too optimistic about the location, don’t look at one case scenario – oh traffic there! Good brand! People are going to jump on the conclusion that the food is good…
- It’s not just about how the food is or that there is a lot of traffic over there. The question to ask when expanding is – why do you want to open another location? Is that what the market wants at that point in time? Do you have the right team? Can you be consistent? Or can you serve those customers any other way without having to open in those locations?
- Thinking expansion, there’s no true strategy but as long as you got what it takes and there’s market needing it; why not.
- Think through it before you make that choice because a lot of people are packing up for one reason or the other. Your landlord doesn’t care, your employees don’t care, your account officer doesn’t care and your bank balance doesn’t care…