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Expanding Your Hospitality Business: Is It the Right Time?

how to expand your business

So you’ve opened your restaurant or cafe. Is it time to think about expanding your hospitality business and taking it to the next level?


Expansion is one of the clearest indications of business growth. You gain access to new markets and more sources of revenue. With more customers, you also have better chances at improving and elevating your product. Why produce just tacos when there is also a market for burritos, right?

But expanding your hospitality business should not be done impulsively. It’s one of those decisions that can have significant repercussions to your resources. This means that you have to carefully determine your readiness for such an action. Here are some of the questions you should ask yourself before deciding to expand:

  1. Is there a demand for it? If your café, bar or restaurant is so popular that it’s getting visits from people from other cities or suburbs, then it’s a good sign. Not only does it mean you’re doing something right, it also means these customers would appreciate having a business like yours nearby.
  1. Do you have the money needed? Expansion does not come free. You’ll have to secure a building, get new equipment and hire a different team, among other things. Make sure you have the capital in place, and that you have thought out your bottom line, investments and their potential returns, as well as your possible expenses, among others. You wouldn’t want to postpone your plans midway just because you ran out of funding, right?
  1. Do you have an existing customer base? Your customers will give you the money you need to keep your hospitality going—and growing. Having a loyal customer base means people are satisfied with what you deliver. By extension, this means that you have a good chance at having more customers wherever you choose to expand.
  1. Have you done your research? This is especially relevant if you are expanding your hospitality business to another locale or country. Learn about the existing market—their preferences, behaviour and history. Investigate your competition, too. This will help you gauge your opportunities and strategies for success.
  1. Do you have a strong team in place? Your employees must be able to step up and handle the added responsibilities of working in a bigger location and serving more customers. If you are opening a new branch, then you will have to entrust some of your day-to-day responsibilities to some of your staff. For this reason, you need to have a team you can rely on before you decide to expand.
  1. Do you have a solid cash flow? A positive cash flow means fewer problems once you do decide to expand. It helps build and fortify the financial foundation needed for the additional costs you may incur.
  1. Are you (literally) running out of room? This is perhaps one of the best indications that you need to expand, whether to a bigger or additional location. If you barely have sufficient room to move around without obstruction, then really consider expanding your hospitality business.

Before you expand your business, be sure that you have everything you need not just to start, but also to maintain such a move. Ensuring that you have contingency measures and back-up plans just in case will also prove ideal.


What do you think is the most important indicator that your business is ready to expand? Tell us in the comments.


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