Entrepreneur Insight

Noodle World: How to Expand on a Good Idea

Sometimes, it takes experimentation before entrepreneurs find the best way to use a good idea.

When John Mekpongsatorn opened his first restaurant, Noodle World, in Southern California at the age of 21, his landlord expected him to go out of business within a month. Instead, there were lines out the door, and he could barely keep up with demand.

“I think anyone out there that has started their own business has one core belief. And that is that you have something that’s viable; you’re doing something that’s going to work,” Mekpongsatorn says.

His concept: a Pan-Asian restaurant where you can order your favorite dishes from Thailand, Vietnam, Japan and China. Nearly 100 items are on the menu, including pho, pad Thai, ramen, udon, wonton noodle soup, yakisoba and many others.

“It’s a concept that I felt was unique… When you go out to eat with a group of friends, why do you have to go to a restaurant that serves only one type of Asian food? Why isn’t there a place that does everything?”

More than 20 years later, Noodle World now has five full-service sit-down restaurants in Southern California, and in 2013, Mekpongsatorn unveiled a fast-casual version of the restaurant, called Noodle World Jr. Total revenue reached around $17 million last year.

It all started with a good idea, but it took Mekpongsatorn and his family decades to recognize its full potential.

All in the family

Noodle World was Mekpongsatorn’s first restaurant, but by no means his first encounter with the restaurant business. His grandparents ran a noodle shop in Thailand in the 1920s, and in 1970 his father opened one of the first Thai restaurants in the United States, in Compton, so Mekpongsatorn cut his teeth in commercial kitchens.

“I was inside a restaurant day and night. I did all the jobs as I was growing up – cleaning the bathrooms, going to the market and buying the food to bring to the restaurant – I had experience doing all of that,” he says.

Noodle World is very much a family business. His father still advises him; his stepmother, June, is the chief financial officer; and some of the recipes, such as the one for pad Thai, are handed down from his aunt.

“I think one of the keys to our success is that we’ve always focused on authenticity, and try to honor traditional roots,” Mekpongsatorn says.

Testing new ideas

When it came to running a business, however, the Mekpongsatorns weren’t afraid to go beyond tradition and try out new ideas – a lot of them. They were looking for the one big idea that would take their business to the next level.

While running Noodle World, the family opened up a Thai-Italian fusion restaurant, serving Thai pizzas and pastas, which got good reviews but, according to Mekpongsatorn, “it was a little ahead of its time;” then they tried a Pan-Asian sandwich shop, but “we discovered that sandwiches really sell only in the daytime, and there was not much demand at dinner.” Then they tried a chain of shops selling boba drinks (a Taiwanese tea drink with tapioca balls added), but realized, in the end, it was better to incorporate these drinks into their existing restaurants. In all, Mekpongsatorn estimates they tried out more than 15 restaurant concepts.

“It’s that spirit of not being afraid to try something… Hey, this is just an idea, but let’s hash it out and try to make it work and see what happens,” he says.

It helps that Mekpongsatorn has had a stable financial backer who supports his vision. His loan officer at East West Bank, Stella Sun, says she bought into the family’s vision because of their strong track record. “They are very devoted and hard-working people with good short-term and long-term goals,” she says.

Mekpongsatorn talks more about the experience here:

Analyze what’s not working

The biggest lessons Mekpongsatorn has learned from all the experimentation was to stay flexible, analyze often, and be ready to adjust anything that is not working.

“It’s great to have a vision, and confidence is of utmost importance, but you also have to realize when things just aren’t working. And at that point, what do you do to make it work?” he asks.

Restaurant consultant Ed Doyle, founder and president of RealFood Consulting, has advised more than 200 restaurants nationwide, including Redbird in downtown L.A. and Catalyst in Cambridge, Mass. Doyle says that understanding what is not working is the first step. “Costs too high, labor out of whack? Is execution poor? Product quality is sub-par or inconsistent? Maybe your projections were wrong? In business, there is no room for pride of authorship,” he says. “You must be able to dispassionately look at your own business and be willing to make changes.”

The best way to make changes and test out new ideas, says Doyle, is to base it on solid research. “Using established benchmark data to model your concept is a good starting point, and evaluate specific markets through data collection and research. Food and beverage concepts are sometimes difficult to test in their entirety but elements – the food and beverage items – can be tested on a social basis or smaller scale. Cook for your friends, cater for friends – get honest feedback.”

Coming full circle

After trying out many other ideas, the Mekpongsatorns finally realized that the big idea they were looking for all along was the one they started with: Noodle World. The question was how to expand on that idea. The original Noodle World full-service restaurant concept was hard to expand because of the long menu.

“To maintain authenticity, you need skilled labor, and it’s very difficult to expand beyond a few locations when that’s your limitation,” Mekpongsatorn says.

The Mekpongsatorns started brainstorming about how to simplify and streamline operations. They identified the top 20 items on their menu and offered them in a new “fast-casual” outlet called Noodle World Jr., where customers order at the cashier, get an order number, and have the food brought to them.

What really improved efficiency was starting up a centralized facility where much of the prep work is done – like cutting vegetables and meats – and then the prepared food is distributed to all of the restaurant locations.

“There’s still a lot that needs to be done at each location, but instead of having one location with 10 people in the back, prepping and cooking, we’ve been able to have four to five people in the back, and that’s huge in terms of bottom line,” Mekpongsatorn says.

Now the Mekpongsatorns are operating four Noodle World Jr. outlets, and plan to open two or three more new locations this year, with the aim of hitting the $20 million sales mark.

“Change is difficult, it’s hard to make changes, no one likes change, but it’s very important. You have [to] roll with the punches, you have to figure out what’s going on, sometimes even look ahead of the curve,” Mekpongsatorn says. ”Noodle World Jr. is truly our future.”