Are you about writing a restaurant business plan? If YES, here is a sample SWOT analysis for a restaurant company to help you form a competitive strategy
Statistics shows that within a period of a year that is from the fall of 2011 to the fall of 2012, about 4,500 restaurants opened in the United States of America despite the fact that several restaurant closed shops within the said period and about 9,000 restaurants struggled to make profits.
It is also important to note that about 80% of new restaurants are likely going to fail within their first five years of operation. This is so because when there are economic downturn, purchasing power drops; people will often cut back on their spending for eating out and they will rather prefer to cook more at home.
The restaurant industry rakes in over $709.2 billion annually in the United States with about 3.8% sales increase in nominal terms and 1.5% industry sales increase in real (inflation-adjusted) terms. Food and drinks sales of the restaurant industry in the United States reached an all – time high; 659.31 billion U.S. dollars in 2013 – far higher than the 42.8 billion recorded in 1970.
When starting a restaurant business, you just have to get your economic analysis right if your intention of building the business is to generate profits, grow the business and perhaps expand the business beyond one location to other locations within the United States and other cities in the world.
When conducting economic analysis for your restaurant business, you just have to critically examine these key factors; place, product, pricing, and promotion. As a matter of fact, you would have to continue to review these key factors at regular interval while running your restaurant business. As a restaurant owner, you just have to have a proper grasp of you competitive landscape.
Restaurant owners should also know that running their own single restaurant (an independent restaurant) is different from managing or operating a restaurant chain or franchise. Managing or operating a restaurant chain or franchise attracts additional impediments like incentive alliance, bureaucracies, growth strategy, and operational guidelines et al.
It is important to note that food cost is one of the most important factors contributing to the overall cost of a restaurant business and should be considered as a major factor when carrying out your economic analysis.
A Sample Restaurant Business SWOT Analysis
When it comes to starting a new business, one of the areas that will help entrepreneurs position their business in such a way that the trade will break even within the shortest time frame, is to critically conduct SWOT analysis before proceeding to launch the business.
With the help of competent business consultants, we have been able to carry out our own SWOT Analysis and here is what it looks like;
Our strength is anchored on our ability to serve our customers through the options of having them either visit our restaurant to have their breakfast, lunch or dinner or by delivering their orders straight to their houses, offices, or any location of their choice. The fact that we offer outdoor catering services and also culinary training counts to our advantage in the restaurant industry in the United States of America.
So far, we have been able to identify a few weakness on our part. The fact that we might possibly launch out big with a bang and start competing with major restaurant brand in the United States of America may likely count to our disadvantage, but we are perfecting plans on our own part to leverage on our moderate resources (finance and workforce) to maximize profits.
Beyond every reasonable doubt, the opportunities within our disposal are unlimited. Restaurant business in Texas and even in the whole of the United States of America is indeed a profitable business venture. For instance; our CEO is an active member of the African community in North Africa and she is one of the highly recognized women leaders in Texas.
Another opportunity that we stand to explore is the point that our restaurant is located in a highbrow area in Huston Texas; a place with huge population of migrants from African descent Lastly, the fact that we offer outdoor catering services and culinary training gives us the privilege to market our intercontinental restaurant to our target market.
The threat that is likely going to confront us is the fact that we are competing with already established restaurants that serve intercontinental meals, and also there are other entrepreneurs who are likely going to launch similar business within the location of our business. Of course, they will compete with us in winning over the available market.
Another threat that we are likely going to face is the area of government policies. This is especially when it comes to the importation of our raw ingredients that can’t be found / cultivated in the United States from Africa, Asia and South America. We therefore fear that if the government of the United States of America places embargo on importation of our major food ingredients, it would definitely affect our business.