Whether you’re opening a brand new restaurant or looking to update your existing one, a restaurant SWOT analysis is a simple, effective way to assess your competitive positioning and develop a strategy to grow your business.
What is a restaurant SWOT analysis?
A restaurant SWOT analysis is an exercise to help operators get a better understanding of their business and identify areas for growth. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses represent internal factors that are in your control as the restaurant owner, while opportunities and threats refer to external factors that can have a positive or negative impact on your business.
Operators can use a restaurant SWOT analysis to come up with marketing campaigns, update menus, and create new processes that will give their business a competitive edge.
A SWOT analysis for a new restaurant will help them understand how they fit into the market, strategically develop their niche or concept, and determine clear paths for growth.
Established restaurants may conduct a SWOT analysis to respond to or prepare for changes in the industry landscape. In fact, it’s a good idea to conduct a restaurant SWOT analysis every year as consumer preferences and the restaurant industry continue to evolve.
What is a restaurant competitor analysis?
While a restaurant SWOT analysis is used to analyze your own business, a restaurant competitor analysis, focuses on your competitors. Once you conduct a restaurant SWOT analysis for your business, it’s a good idea to do the same exercise for your direct and indirect competitors. A competitor SWOT analysis helps you identify your differentiators so you can double down on what attracts customers to your restaurant.
Why should you conduct a restaurant SWOT analysis?
No matter your restaurant type, understanding your strengths and weaknesses as well as identifying the biggest opportunities and threats will strengthen your business for the long term.
Completing this simple exercise — and taking action based on your learnings — will help improve your restaurant profit margin, enhance the guest experience, keep employees happy, and gain a competitive advantage.
How to conduct a restaurant SWOT analysis
Now that you understand the importance of a restaurant SWOT analysis, let’s dive into how to complete it. This exercise should be a team effort — ask your manager, executive chef, and key front- and back-of-house staff members to provide input so you get a 360-view of your restaurant business. You can also start by reading customer reviews for a quick (though not comprehensive) understanding of what people like or don’t like about dining with you.
Restaurant SWOT analysis example
To conduct a restaurant SWOT analysis, create a simple table with the four categories. You can use this template as an example:
Then, review each category and write down what you and your team think are your strengths, weaknesses, opportunities, and threats. We’ve included some ideas below to help you get started.
Strengths: What do you do best?
Let’s start with the positives — your restaurant’s strengths. What makes customers choose your restaurant over others? What brings repeat customers back? Some examples of strengths could include:
- High-quality food
- Excellent service
- Memorable decor
- Reasonable prices
- Unique or international cuisine
- Innovative cocktails
- Attractive deals and promotions
- Attention-grabbing marketing campaigns
- Fun happy hours
Weaknesses: What can you improve?
Now, let’s move onto your weaknesses. Which areas of your business need improvement? While this is not a fun or easy topic to discuss, it will help you drive long-term growth.
- Lack of training for waitstaff or kitchen staff
- Consistently running out of key ingredients
- Unreliable suppliers and vendors
- Outdated kitchen equipment
- Inefficient tracking systems (e.g., paper or Excel sheets) for inventory or sales data
- Slow or complicated POS system
- Decentralized scheduling system
- High employee turnover
Opportunities: How can you grow?
The next step is to look for opportunities to boost your restaurant sales and increase your restaurant profit margin. To do this, think about how you can capitalize on industry trends and consumer behaviors. Who are your customers? What are their dining habits?
Some examples are below, as well as links to DoorDash resources and products that can help you capitalize on these opportunities:
- Improve your menu profitability by focusing on your most popular or more profitable items.
- Update your menu to keep up with consumer preferences, including farm-to-table, vegetarian, vegan, or gluten-free options. You can even consider creating a separate vegetarian menu.
- Take steps to appeal to Millennial food trends, such as offering healthy options, incorporating convenient restaurant technologies, and making eco-friendly choices.
- Determine your slow days or times and find ways to generate more sales during those shifts.
- Expand to new locations. (This Washington D.C.-based restaurant &pizza took a data-driven approach to expansion.)
- Sell retail products, including salsas, sauces, dry rubs, salad dressings or baked goods. Expand your distribution with DoorDash DashMart.
- Partner with DoorDash to offer delivery and pickup with a seamless online experience.
- Increase your social media engagement to attract new customers.
- Train your staff to upsell menu items.
- Boost your online presence so more people see your menu when searching for restaurants online.
- Increase order sizes and recurring sales by offering catering and group orders to corporate customers.
Threats: What are you up against?
Finally, take a look at the competitive landscape and broader economic and cultural factors that are potential threats to your business’s success. Examples include:
- A new restaurant opening in your neighborhood
- An existing restaurant with a similar cuisine, dining experience or menu
- Rising costs of key food items
- A competitor’s successful marketing campaign
- A supplier goes out of business
- An economic recession
- A global pandemic
How DoorDash can help your restaurant thrive
Every restaurant is unique, and there's no one-size-fits-all solution to grow your business. That’s why DoorDash offers a range of products to help you reach more customers and grow your revenue.
Whether you want to offer delivery and pickup, create demand with your existing delivery fleet, set up your own online ordering website, find a white-label delivery fulfillment partner, provide catering and group orders, or sell retail products, DoorDash has a solution to help your business thrive.
Sign up for DoorDash to maintain your competitive advantage.