Photo: Daniel Goodman / Business Insider
This post originally appeared on American Express OpenForum.When Veronica Romero and her husband opened their first restaurant 10 years ago, they had no plans to stop at just one. They’ve expanded their business to four locations in Manhattan, and they continue to stay alert for the next opportunity.
Three of the restaurants are on the same block, so Romero knew that she had to make them different enough in customers’ minds to be profitable.
Specializing for different crowds
Hidden City Cafe, the flagship location, sells mostly soups, sandwiches and salads. It caters to the afternoon lunch crowd. Gramercy Star Café, several doors down, offers patrons an extensive breakfast menu, a pasta station, pizza and desserts, along with the soups and salads. Gramercy Grill, which opened nearly two years ago, specialises in hamburgers and grilled-chicken sandwiches.
Many of the customers don’t even know the stores are related.
Romero says by not lumping the stores under one brand, they don’t compete with each other. The owners can offer a wider range of products and capture different markets. A customer who wants a burger and fries stops by Gramercy Grill. But the next day, the same customer will consider Hidden City if they want a salad.
Managing multiple locations
Perhaps the largest benefit of having the restaurants so close to each other is that they are easier to manage.
“We focus on the basic food in one location and distribute it to the other, since it’s so close,” said Romero. “That way, we can save money on labour.”
She doesn’t have to hire separate managers for each store because she can run across the street to check on what’s happening. With that in mind, she trains new employees well so that they can work on their own without being micro-managed.
“If you work at Hidden City or Gramercy, you’re not under pressure,” said Romero. “We’re not constantly on top of you. We believe that if you know how to do your work, you’ll do it. If you don’t do it, then we’ll step in and we’ll let you know what you did wrong in a respectful way.”
Proximity to steady customers
The prime location in Manhattan’s Gramercy neighbourhood also means the stores are close to corporate professionals and students—the school of Visual Arts and Baruch College are a block away.
That worked in Romero’s favour during the height of the recession because the students never stopped coming.
“Students are always around and they always have to eat and our prices are low,” said Romero. She offers student meal plans and special discounts in her stores.
Catering during the recession
Catering was a huge part of her customer base. She wasn’t so lucky with those clients when the recession hit.
“It was very difficult because we were used to an economy where big corporations would buy lunch for all their executives and for all their meetings,” said Romero. “Breakfast, lunch and dinner: If they had to meet, there was food on the table, because the American culture is like that. They had to stop spending on things that they really didn’t have to.”
To cope, Romero had to plan a new strategy. She turned to networking, relying on references from people she already knew to lure in new business. She found non-profit organisations could afford catering for their events.
Now, she says corporate America is slowly recovering and resuming spending. But she would have taken huge losses if she hadn’t acted quickly.
Staying alert and expanding
Reacting quickly and taking advantage of new opportunities defines Romero’s business strategy. She opened all four of her restaurants after noticing a vacant space even when she wasn’t actively looking. She says she definitely plans to continue expanding her business.
In five years, she’d like to open at least two other locations.
“Then I’ll stop and see if we really want to go further than that. The bigger you are, the more problems you have as well.”
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