The new year is a perfect time to perform an analysis on your business and find out where you can improve as well as what you’re already doing well. You can do this with a SWOT analysis. SWOT stands for strength, weakness, opportunity, and threat. Any business can benefit from this kind of analysis.
Strengths
Knowing your strengths helps you play to them. Having a competent, loyal staff, quality business strategy, high local support, and solid capital are good examples of strengths. You should capitalize on anything that outsiders would see as your strengths, not necessarily things you consider your own strengths (although you should definitely work on those, too).
What to ask:
- What do I have that my competitors don’t?
- What are we already doing well?
- How can my advantages bring in new patrons?
Weaknesses
When you know your weaknesses, you are able to take measures to fix them. If you haven’t established a solid reputation yet, or your largest competitor has a better online ordering system and curbside pickup/delivery than you do, you have weaknesses you should look into fixing. Turning these into strengths provides obvious business advantages.
What to ask:
- What systems and policies could be improved?
- What is preventing my restaurant from being at the top?
Opportunities
Everyone wants to know what potential growth and increased profit opportunities exist for them. Expansion, lucrative partnerships, new markets, low competition, and increasing trends toward your particular niche are all opportunities. With proper strategy, these should all be ways you can grow your business, profit and customer base.
What to ask:
- What are the current trends in the market?
- Are there technologies or partnerships that could help my restaurant run more efficiently?
- What new expansions or markets could we explore?
Threats
Threats are things that could endanger the profitability of your business. These are external, so physical building, facilities and location in a community are all examples of threats in this category. If you are a high-end restaurant, but you’ve chosen a location in a lower-end of town, you may be facing a threat to the profitability of your restaurant. Is someone opening a similar restaurant near yours? Brand reputation, competitors and changes in trends could all be potential threats to your restaurant’s profitability. These are things you must keep in mind as you make business strategies.
What to ask:
- What do my competitors have that I don’t? What are they doing better than we are?
- Is anything stopping my business from reaching its potential?
This information can be used to make data-driven, logical decisions about your strategy going forward. Of course, it must be taken with a grain of salt, as it cannot predict changes to your menu, staffing, or consequences of global pandemics.
