We spoke with Kevin Gelfand, Founder of the six location Shake Smart, about how to successfully grow a multiple location business. Gelfand has always had the entrepreneur mindset; while attending San Diego State University, he began the first student business on campus and went on to start Shake Smart before he graduated. Additionally, he was a finalist in the Global Student Entrepreneur Awards, a top candidate for Forbes’ Student Entrepreneur edition, as well as being featured in many local news outlets including Good Morning San Diego and Fox News for his outstanding talent.
1. Running Multiple Locations Is Completely Different Than Running One
- How is running multiple locations different than running one location? Are there any other fundamental differences in running multiple locations versus one?
“You must have key systems in place to operate more than one location because you can’t do it all on your own. With one location you can, kind of, do it all; it’s very easy to manage your inventory and costs but once you get to two and beyond, you have to be able to break up each location to their separate metrics.”
- Will you tell us how those key systems helped you in opening new locations?
“We’ve grown from one location to six locations; our first year we just had one and we were trying to figure out what the brand was and the messages we were trying to get across. After the first year, we decided that we definitely wanted to grow; therefore, in the second year, we really focused on systemizing our operations. We wrote down and systemized any issue or task that we were doing for the business. Everything from troubleshooting, whenever there was an issue with anything, writing down what the issue was and what the solution was to fix it, to purchasing, writing down everything that goes into opening a new location, to marketing, to payroll processing; we had systems and excel sheets for everything. That’s what we spent year two on; then this past year was our implementation of those systems. We opened a second location in April, a third location in May, a fourth location in June, and a fifth location in December. When we opened each of those locations, we already had a bunch of hectic things going on but we made a very important point to improve those systems because everything was conceptualized before we actually implemented them. When we opened that second location, there was a lot of fine tuning we had to do to all of our systems and then when we opened the third location we felt we had encountered all the problems in the first two openings and then by the fourth and fifth locations we really just handed the paperwork to one of our other employees to do; by the location in December, it was a flawless opening, we had no hiccups. Everything ran really smoothly from training our new staff, to pre-grand opening marketing, to purchasing everything on time, to health department affairs. The final draw with those locations is that we have something successful that we could duplicate really easily, and in February of this year we opened the sixth location.”
- What best practices have you developed to run multiple locations extremely well?
“Weekly meetings; we meet with each of our general managers together, once a week, to do a collaboration session and hear what the different issues are at each store so that everyone can give their input. Utilizing technology; we utilize a cloud-based POS system so we can manage our inventory, sales, and payroll easily. Having the right suppliers who can help grow your brand is also important. Having these systems in place for everything from hiring, to recruiting, to training, to marketing, for each location, so you’re prepared ahead of time, is key.”
- What should someone do to prepare when going from one location to two or more?
“Systemizing is key; a lot of people make assumptions about company metrics, which is a big mistake. They assume that people they hire are going to know how things need to get done or they assume that people are going to jump to the job offering when they put up a job post. It’s really about putting systems in place and creating hard metrics, rather than making assumptions. Record those metrics every time you post a job so over time you can accurately predict how many people are going to come for the job hiring. Say I need to hire 10 people every time I put a Craigslist post out; I know that 4 people are going to respond, 2 people I’m going to interview, and one person I’m going to actually like, therefore, I need to do 10 Craigslist postings before we open. The metrics are important, systemizing is important, and just creating a brand that is even possible to grow is important.”
- What pitfalls did you have when expanding past one location that you did not anticipate?
“Every location is so different but we expected most of the decisions would be the same for every location. We opened our second location on a military base and we thought it would really be easy, we would just go get our health department approval and then start building. However, they have very specific criteria; for example, you have to use American made parts and you have to go through a 90 day approval process. We had set a grand opening date but we weren't able to open until 30 days after that because we had no idea about these approvals. We had the same types of issues at other locations like our mall location, they have a lot of specific criteria. You have to know your partners’ expectations and all the different aspects and processes for opening each location.”
2. Hiring Great People Is the Key To Success
- Why is hiring great people such an integral part of having two or more locations run successfully?
“Because they’re your brand ambassadors, they’re the one’s who are the front lines for your operations. The passion they have for the company is going to ripple down to the passion the customers have for the company or the passion the other staff have for the company. As the owner, you’re the visionary but then you have this team that’s going to go to battle for you and if you don’t have a good team with you, it could ruin your company.”
- How do you find great people?
“We really focus on passion and hard work over experience. Every single one of our staff members were complete beginners at anything we asked them to do as far as executive level work, but that was kind of similar to how we created the concept. We were beginners as well but we had that passion and motivation to work hard so we focused on hiring new people who also had those qualities.”
- How do you train people?
“For the employees on the front line we have a three day training process. We believe that some people are visual learners and some are book learners so we created a three-prong strategy for training. We have videos they watch, an interactive 80-page manual that they read, and then we have them actually work in the shop for three days, with one of our trainers, to go over everything. Additionally, we have them take tests after each training session to make sure they understand everything they learned.”
- How do you motivate people especially when you are not always around?
“We focus a lot on entrepreneurial initiatives, creating a family environment, and being very flexible. We learned that people hate to work at places where their schedules are too firm or where it was just kind of a ‘go do the work and leave’ type atmosphere. We want to do something different, therefore we have an open door policy where staff can come to us with ideas for the company and we’ll actually value their input and try and implement it. We also do quarterly evaluations with each of the staff members so they don’t feel like they’re stagnant in the company. Furthermore, we are very accommodating in our scheduling and spend significant time and money creating that optimal schedule for everyone because we know the staff appreciates it. The happier your employees are, the better they’ll work.”
- What best practices can you share to build an overall great culture, especially when each location is far away from each other?
“Transparency is huge; we don’t hide anything from the staff and we really keep them involved. With our open door policy, I have staff calling me all the time with ideas or issues they have and it’s that extra time and effort you put in to cater to them that will pay off. We also do staff celebrations and recognition; we have employees of the week and we do a bi-annual celebration, our staff really appreciates those types of things .”
3. Thinking Long Term Is the Key To Beating Your Competition
- What best practices can you share around thinking long term to beat your competition?
“Technology is a huge asset that new companies have today; older companies are still trying to fix their systems to utilize this advantage. The iPads, cloud-based systems and things like that are huge to beating the competition. Furthermore, the companies that are still small and trying to grow have a lot more flexibility to respond to what the market is saying. For us, gluten-free is a huge diet right now, so we implemented new menu items for gluten-free, whereas big companies that have to do this over 100 stores would have a much more difficult time with this. Really just being actively responsive to what the market is saying while you’re still small is huge.”
- How do you differentiate yourself from your competition?
“We also focus on transparency with our customers; companies can claim they offer healthy items on a poster but actually having your nutrition facts in front of customer’s faces is going to prove it. Our big differentiator is that we put 30 grams of protein in each shake; other smoothie concepts may have one or two menu items that have a lot of protein but we focus on a full menu of high protein options. Additionally, our branding is much more unique than traditional blended drink stores.”
- How did you come up with these differentiating factors?
“It’s what the company was built upon, there were no blended drink options out there that were actually good for you before we opened. In my opinion, all you were getting was sugar, carbs, and calories and not the proper protein or protein to carb ratio.”
- How do you balance long term thinking and short term thinking within your company?
“I separate them into days; I’ll spend two or three days thinking short term, things that need to get done and then I’ll spend two or three days thinking long term, things that need to happen for the company. It’s really turning your mind on to whatever aspect of the company is important at that moment and putting a good amount of time into each of those aspects. Don’t get stuck solely focusing too much on either the short or long term because they are both equally as important.”