Pizza Today - March 2016 - 72

run around and perform triages if
needed," says Marc Cosentino, founder
of Goodfella's Brick Oven Pizza. At
the same time, Stouffer notes that,
"With a pizzeria, you can't just open
up a block over. You have to go further
away to make an identical restaurant
make sense."
Next, it's best to establish the second
shop in the same type of area as the
first, be it a strip mall, urban sprawl,
suburb or college campus. "You're not
going to take the friendly neighborhood mom-and-pop store and put it
in a mall," says Cosentino. The fewer
new variables the better, and the types
of customers who made your first shop
successful will most likely patronize
your second.
Logistics Lessons

Location is just one of several considerations you'll need to make as you
open a second shop. From payroll to
ordering to customer complaints and
more, every concern requires scalable
solutions. "You've got to build systems
and come up with solutions to problems just one time," says Stouffer. You
won't have time for one-off fixes, and
your managers need to know how to
patch up problems themselves.
For many restaurateurs, cash flow
management is the greatest logistical
hurdle. "With expansion, you have to
frontload your costs," say Casey and
Sam Askar, owners of Askar Brands.
"That includes training all the staff,
and that payroll comes from the
proceeds of the first location." Even
if you're turning a great profit at your
first store, you can't assume it will be
enough to fully fund a second. You've
got to run the numbers.
In the long term, though, you also
need to factor in greater revenues and
lower costs. "If you have a $1 million
restaurant, and you open another one
across town, you should expect to have
two restaurants earning $1.1 million
due to greater awareness," says Scott
Gittrich, founder and president of
Toppers Pizza. Economies of scale will
7 2 / P I Z Z AT O D AY. C O M / M A R C H 2 0 1 6

also allow for lower wholesale costs
as you expand. Overall, you'll need to
ensure a reliable cash flow on the front
end to reap the advantages of expansion later on.
Key Personnel

You may have your funds, properties and operating procedures planned
out - but how should you allocate
labor? "I would take my guys who
are well-seasoned and well-trained
and use them for the opening of the
new store," says Cosentino. "Have
those people train the new hires." The
reliable crew that's helped build your
business will be indispensable during
your expansion.
As important as your crew is, however, they can only run your shops if
you adopt the right role. "If you're the
kind of person who's always putting
out fires, it might be a better decision
to expand your hours or add delivery
or takeout," says Stouffer. Running a
multi-store business requires delegation, top-down thinking and a big
picture focus. If those aren't your
strengths, you'll need to develop them
or partner with someone whose skills
complement your own.
Getting the Word Out

The U.S. pizza market is more or
less flat, and you'll have to fight for
market share early on at your new
location. "You have to create awareness
beforehand," says Askar. "You have
to do a great job of communicating
your story from one community to the
next." Your employees, current customers and prospects should be able to tell
your story and describe your products
before the new store's grand opening.
To accomplish that goal, a combination of social media, flyers, newspaper
ads and radio spots will do the trick,
and the industry average for ad spend
is between two and five percent of
gross sales. "That may seem like a lot,
but you absolutely have to invest in
marketing if you want to grow your
sales," says Stouffer.

The method is more important than
the medium, however. Before you fret
over Facebook ads, Twitter posts and
other minute marketing details, you
need to identify what - and who
- made your first shop successful.
"You've got a certain number of critical customers who already love what
you do," says Gittrich. Ultimately, the
success of your second shop will be a
matter of communicating and replicating the product quality and customer
appeal of your first. n
DAVID LAMARTINA is a Kansas City-based
freelance copywriter who specializes in the
finance, food and health industries.

Staying Afloat
Seemingly small details can
snowball into major problems during an expansion. Follow these tips
to avoid the most common pitfalls.
* Keep an eye on cash. Great
profits don't always coincide with
steady cash flow. Make sure you've
got enough cash and credit to get
both stores through a slump.
* Make a name. "You need a
strong trademark if you're going
to expand," says Scott Gittrich,
founder and president of Toppers
Pizza. Your brand doesn't need to
change, but be flexible with your
name.
* Go by the book. Prevent
losses with clear-cut standards and
rules. A "handful" of cheese may
be far more expensive than 2 cups.
* Stay legal. Zoning laws, local
taxes and other legal minutia can
lead to major headaches later on.
Consult lawyers and real estate
specialists before you set up the
new shop.
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