Upscaling a business can seem daunting, but fledgling companies can get future fit with the help of their supply chain, says Tim Adams
It may sound like a daunting prospect to take a business and upscale it, but now certainly seems the right time to do so, despite the challenging trading conditions that many high street operators are facing.
Small chains with fewer than 25 restaurants have grown in size (an increase in sites) by 32% in the past three years alone. Meanwhile, medium-sized chains (between 25 and 99 restaurants) have seen a 47% increase in the number of outlets within the same time period.
Having the right partner is key to business growth. It's vital to offer customers insight and advice into how they can work with suppliers to improve and future-proof their operational processes, put in place a robust plan for the mobilisation of multiple sites and ensure that their business runs smoothly while expanding.
Too often, fledgling businesses grow without having time to give adequate consideration to their future supply chain arrangements. They find they've over-stretched their early-life solutions and are suffering with additional cost and complexity. Trying to maintain the ‘small brand' essence and USPs that made them so successful, alongside the complexities of delivering a consistent offer across multiple sites, becomes increasingly challenging as they expand across the UK. Tackling some of these hurdles at the start of an expansion journey pays dividends in the long-term and helps support growth.
Product development is also a key focus. There are always opportunities to take out cost in the product offer to help fund growth, while keeping a watchful eye on the preservation of brand quality and equity.
Businesses also appreciate having that ‘extra pair of hands' that can be provided by a positive supplier relationship when resource is tight internally. Often, procurement and chef development teams are not formed at the same scale and speed as the restaurant expansion. The opportunity to lean on distributors for expertise and for the use of development facilities, alongside providing insight and data to support decision making, is critical in keeping businesses lean at such an important time in the growth curve.
Ten upscaling tips for emerging brands
1 Think about how your current supply solution can support growth into the regions you're targeting
2 Consider how your supply chain may help maintain or, conversely, compromise the consistency of your offer as you branch out beyond a few sites
3 Begin to engage directly with your key manufacturers/suppliers to leverage better pricing on core products and ingredients
4 If you're using local and artisan suppliers, speak to them to understand their capability to support your expansion plans
5 What contingency plans are in place for your supply chain? If a depot or a manufacturer fails, is there the scale or breadth of range to switch on alternatives?
6 Map the data requirements you need to manage your business effectively across multiple sites. What frequency of reporting and key measures do you need? Are your suppliers capable of providing this? How can you get visibility of stock on your key products?
7 What are your expectations for service? Are you ready to instil more discipline at site level in terms of how and when you order? Do you want to put in place restrictions on ranges so that you can maintain a consistent offer?
8 How can technology support your journey, perhaps in order placement or recipe planning and budgeting?
9 What areas of resource do you need to upscale to support your expansion? Do you need to employ people within procurement or can this be managed by your chef development team? How much support can you get from your distribution partner to enable you to take out cost ‘back of house'?
10 What can you do commercially to support the acquisition of further sites? Can you leverage key support monies from your partners? Are you able to streamline your product or service offer to take out cost? Do you have a growth reward programme in place with your distributor?
Tim Adams is director of marketing and corporate sales at Bidfood
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