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How do you scale a hospitality business successfully?

Updated: Oct 13, 2018

From meeting entrepreneurs in our sector there are two distinct schools of thought. In the first camp is the passionate foodie, chef or aspiring restaurateur who has decided to head out on his or her own, perhaps giving up the corporate world. Often the admirable passion for product and food drives the agenda, with the output being a great concept which, if delivered well and in the right spot, will smash it if driven by perseverance and lots of hard work.

In the second camp you have a very different kind of person, who sets out to build eating out brands that are designed to scale. Of course people from the first camp can build their concept into a brand and open new sites, but this could be more organic and take longer. A way of thinking has certainly developed for those setting out to create a brand for scale. Usually you will invest in central infrastructure pretty quickly, financing will be higher on the agenda, and potentially you will have spent more energy on the branding and visual identity. You might choose suppliers that work nationally and the filter for decision-making will often focus around how you deliver consistency. A lot of companies we work with fall into one of the camps, almost always supporting growth. Sometimes this involves helping to take people from the first camp into a position where they can scale but mostly it’s about helping people who plan to scale at an early stage or to accelerate from ten or 20 sites. When I was asked to moderate a panel recently on overcoming growing pains, I jumped at the opportunity, especially when I saw the panellists – four great leaders who have developed stand-out multi-site brands. They were Jillian MacLean, of Drake & Morgan; Simon Potts, of The Alchemist; Richard Morris, of Tortilla; and investor Paul Campbell, of Hill Capital Partners. Five key areas emerged: Know yourself To be successful and enable scale, you have to balance the right skills around the table. It’s vital you know your own strengths and weaknesses to help you effectively fill the key roles around you. For someone who is operations-focused, you may want the support of someone with a marketing or growth background. If a great creative, you’ll probably want an operations leader with strong process and people skills. Almost unanimously, everyone could agree you need a strong finance leader – at the early stages that could be as an advisor. In addition to the full-time support of business leaders, having a strong advisor or non-executive is priceless, both for support and their guidance. Again, pick someone who complements your skills and ideally has been there and done it, with experience in scaling brands. Beware of distance When scaling it’s easy to get excited about the far-flung opportunities or look quickly at a national roll-out. The advice from the panel was not to let the perceived glamour get in the way of the grind. Take it from me, as much as I try to make my life look like a ball on Twitter, driving 250 miles up the M1 at 5am every week or sitting on a train to Glasgow is far from the high life. Initially think in clusters when planning your roll-out, which means you can provide the best level of support to the sites and save wasted hours of travel. Don’t be frightened of tough conversations As businesses grow, so do the skills required to run them effectively. Risk Capital’s Luke Johnson has a theory the pinch points in growing a restaurant business are seven, 17 and 70. Our panellists, who all had experience of passing the seven and 17 mark, agreed with the principle. At seven sites it was felt you needed to let the entrepreneurship in the brand live but have a team that could implement process. At 17 sites, it was time to put a broader range of controls, processes and a more formal communications structure in place. Within these life stages it’s almost undoubted key people will need to change. It’s important to have up-front conversations about this as you recognise the challenges, then work quickly to find someone with the new skills you need. The bigger challenge many entrepreneurs don’t face is when they are no longer the right person for their business – personal reflection is key, try to remain a help and not a hindrance. That can mean becoming hands-off and passing the chief executive role to someone else. This is particularly pertinent if you are looking for substantial investment at a later stage, although for the most part investors will want to see you committed and working hard for your business. Build a solid pipeline You’ve read the title and probably think I’m referring to sites but no, you need to build a strong pipeline of managers in the business. One of the brands onstage worked on the basis it doesn’t hire general managers from the outside, it hires assistants and then promotes from within. Every site opens with an existing general manager moving to take the role. That’s impressive – but not always practical of course – but it’s certainly something to aim for. To retain and build your culture it’s a sensible way to go, hiring a new manager for a site and dropping them in to train at another for a few weeks may give them a taste for the culture but not embed them in it. If that’s not a practical option, then heavy investment in training is vital. One of the brands has three distinct training areas – one for food, one for bar and one for service – each with a regional trainer in place. Another worked on having full-time trainers at each site. Both impressive models which, in my opinion, shine through in the experiences at their respective brands. Culture changes The big question on everyone’s lips at this type of event is how to retain the brand essence and culture as you scale. No matter who I talk to in the sector, it seems there is no golden bullet. In fact, what I hear most often is it’s probably more important to understand that the brand will evolve and culture will change over time – it’s undoubted. The key to holding on to the magic is spending time defining what it is that makes your brand and culture special, then simplifying your messaging and ensuring it is regularly and consistently delivered to teams across your business. I’ve worked with many companies to help them better define and refine their brands and culture. Often to me the missing link is communication. It’s vital you get face-to-face time with your teams from senior leadership but, as you scale, it’s equally important you build an internal communications process that enables you to inform and inspire your front-line team members. It will make your growth all the more easier having an engaged and motivated team.

First published in Propel Quartley


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