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How Do I Conduct a SWOT Analysis of a Restaurant?

Business plans often include a SWOT analysis.
Having a decor that hasn't been updated in decades may be a weakness for a restaurant in a trendy neighborhood.
A restaurant might identify the service its staff provides as a strength.
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  • Written By: Tiffany Manley
  • Edited By: Shereen Skola
  • Last Modified Date: 24 March 2014
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Business plans often include an analysis of the strengths, weaknesses, opportunities, and threats (SWOT) a company might face. To conduct a SWOT analysis of a restaurant, you would likely examine both positive and negative factors that potentially influence the business. Location, great customer service, and pricing might be strengths, while cost of rent, limited advertising funds, or staffing limitations would likely fall under weaknesses. Opportunities might include strategic development of new training programs or an expansion of services offered, while threats might consist of competition and an economic downturn.

A SWOT analysis would possibly start with an analysis of any strengths. Many times, this is an easier component of the examination. Look at the reasons you started the restaurant and the passions that drove you to make the decisions you did. A great location, exceptional customer service, and a special or unique offering are all possible strengths to include in the analysis.

An examination of weaknesses should also be included. These are things that do not necessarily spell disaster for the company, but they are areas that should usually be improved. Many times, the weaknesses are things you have the ability to change or work toward changing, bettering the business in the process. A high turnover rate is one example of a weakness that might be presented in your analysis.

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Opportunities often represent a chance for growth. Funding for expansion or streamlining a process in the restaurant are two examples of opportunities for improvement. Often, an examination of the weaknesses in the SWOT analysis of a restaurant will lead to several discovered opportunities.

Threats consist of factors that threaten the stability of the restaurant. During a severe economic downturn, individuals might eat out less, possibly decreasing your income. Competition that is close to your facility might also be considered a threat in a SWOT analysis. It is often possible to examine the threats and make decisions that allow you to weather each storm better than if an analysis had not been made.

While a SWOT analysis of a restaurant would often appear in a business plan, a business plan is not required to complete one. Simply examining the various aspects of the restaurant and making a list will often help owners identify areas that should be focused on. The analysis might need to be revised at certain points as well.

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Discuss this Article

Crispety
Post 3

@Kat919- That is a good way to put it. I think that the best way to really understand a complete SWOT analysis is my doing some competitive intelligence. You really want to shop the competition to see what your competitors are offering.

This can really give you a sense of what you can do to improve and what new opportunities you can create to stir up business. It can also validate your business if you realize that the food that you serve along with the service that you give your customers is superb.

I have a friend that when through a market research company in order to find out what his competitors were up to. They even gave him a copy of a few actual interactions caught on video so that he could see how his restaurant compares to others. He said that it was a definite eye opener and he got a lot of valuable feedback.

He later decided to have his own restaurant become a target of an uncover taping by a mystery shopper. He said that it was the best thing that he ever did and the problems that he thought he had in his restaurant were confirmed with this tape. The camera doesn’t lie.

Kat919
Post 2

@dfoster85 - I think the key is that strengths and weaknesses are inherent or internal, while opportunities and threats are external and/or haven't been realized yet.

So bad service is a weakness. But if all your best servers come from a local college and the college closes down, that's a threat - it comes from outside your restaurant.

If you have a great chef, that's a strength; its internal to your restaurant. But if your area has, say, some great farms and you do no yet have relationships with the farmers, that's an opportunity. You could reach out to them and possibly improve the quality of your ingredients (not to mention have a nice advertising hook, if you get a lot of local food.)

dfoster85
Post 1

With any kind of SWOT analysis, how do you tell the difference between a strength and an opportunity and between a weakness and a threat? They seem like they would be really similar. Like, couldn't a great staff be seen as both a strength and an opportunity for growth.

In the part of the country where I live, bad service is a constant problem at a variety of restaurants. Weakness, or threat?

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