5 Tips To Scale Your Food Business With Lisa Tucker

Written by Margee Stanfield

Photos Contributed by Alexis Maddin

Lisa Tucker is a Memphis-based entrepreneur and business coach with years of experience in the food and beverage industry. Her expertise has helped many restaurants and food businesses scale strategically and confidently. 

Here are five of Lisa’s top tips to scale your food business. 

Tip One: Have a solid concept. 

Take a hard look at your concept again. 

“Some businesses may be doing very well from a sales perspective, they may also be doing very well from a profitability standpoint,” Lisa said. “But have you truly maximized everything that you could do from a sales and operation standpoint with a given concept that you have? 
Or is there still an opportunity to really fine tune your concept and the business model?”

For example, if you are considering opening a second location, you first need to ask yourself if you have maximized everything you can do in your current location. You may find that your concept can be fleshed out more. 

“You may have a quick casual restaurant that could easily be doing more — catering or more delivery,” she explained. “And by just doing those things alone, you could then grow that business to a million dollars in sales before you even create your second location.”

Reassess before you take any new big swings. Do you have a solid concept and a solid business model to match that concept?

Tip Two: Look at prime costs & have a system for managing them.

In the restaurant world, prime costs are associated with your two main controllables: cost of goods sold and labor. Combined, they typically make up about 50% of your sales. 

“There's a lot of money that restaurants leave on the table with those two costs,” Lisa said.

When it comes to tracking and managing these numbers, many restaurant owners don’t have a clear system in place, relying on intuition rather than data and other technical tools. Lisa encourages taking a closer look at how you are pricing menu items, scheduling labor, and controlling inventory and asking yourself questions like these: 

• Is your team as productive as it could be? 

• Do you have the right type of people on your team?

• Are you really managing your inventory? 

• Are you actually looking at the true cost of goods sold as opposed to just that week’s purchases? 

“There are a number of legitimate reasons why restaurant owners fall behind, but the most critical part is that you have to have a system to make sure that those costs stay in check —  because 5% could be the equivalent of $50,000,” Lisa said. 

Tip Three: Invest in your marketing.

A common mistake Lisa sees? Business owners not appropriately investing in creating traffic for their restaurant. 

“There should never be a time where there is zero dollars allocated to marketing because you always have to be attracting new customers,” Lisa said. 

You will hear a range of amounts marketers believe you should invest, but according to Lisa, a good rule of thumb would be to dedicate about 10% to your overall marketing. If you can’t hit 10%, get as close as you can. 

“That number includes all marketing and expenses that are associated with driving strategy for your business,” she said. “So even though that does sound like a really big number, it is an all inclusive number.”

Marketing is a growth engine. 

Tip Four: Understand your cash flow. 
There is a rhythm to cash flow, and if you understand that rhythm, you are better prepared for both your peaks and valleys. During a few key months of the year, most restaurants will see a huge trail off in their business. Without a budget, the ebbs and flows businesses experience across periods like summer lulls and post-holidays can hit hard.

“It helps business owners to stay level during the ebb and flow. That's essentially what a budget does for you. It helps you to properly plan for what you're going to need in that period. And it also helps you to better expect your cash flow,” Lisa said.

Additionally, a surplus does not mean bonus money; those are funds to keep in the bank in preparation for the next time you’re in the red. 

“Are you using the dollars from your surplus periods to carry you during your deficits?”

Budgeting is not just about staying afloat, but remaining confident in knowing you have a system in place to successfully ride those waves. 

Tip Five: Build relationships with local lenders. 

In addition to understanding your cash flow, having somewhere to turn for financial support is equally important. Pre-established relationships with local lenders during those valleys can be a game changer. Lisa encourages food business owners not to wait until they are in a bind to seek help, because building relationships takes time.

“There's always a way to borrow money, but … typically, if you wait till the last minute, you can go and get a loan, but it's probably going to be at a very high interest rate,” she said.

Whether it’s a credit union, local bank, or community based lender, having those connections set in place can open the door to more affordable funding options. Having something like a line of credit can carry you over from a payroll perspective, an inventory spike, or a sudden catering surge. 

Start those conversations now to save yourself from scrambling later. 

Want to hear more high-level tips like these? If you are a West Tennessee food business, make sure to attend our ScaleUp Kitchen workshops! These free sessions will cover 14 different topics, offering insight into a variety of areas such as marketing, team building, finances, and more! Whether you are a food truck, baker, caterer, or restaurant — these workshops are designed to help you grow your business. You can browse the topics and register here.