A SWOT analysis allows F&B business owners to evaluate their position in a specific market. Your F&B business may have the best ambiance or serve the most delicious appetizers in your locality. But if you don’t keep tabs on its strengths and weaknesses or identify the opportunities and threats facing your business, your profitability may suffer.
The letters S.W.O.T stand for strengths, weaknesses, opportunities, and threats.
The first two of these – strengths and weaknesses – take into account all the things you as a business owner can reasonably control. Opportunities and threats, on the other hand, refer to the things that you don’t have control over but which can impact your business for better or worse. Both categories come together to provide you with a holistic view of where you stand in the competitive landscape.
Analysis of Strengths
The strengths of your F&B business lie in what you do best, whether it’s serving tasty food, offering quality service at the table or providing decor that makes the fun of eating at your F&B business a memorable experience. Other strengths may consist of your pricing structure, such as offering a lower-priced menu than similar F&B businesses in your area. Other strengths may include serving a specific type of ethnic food not served elsewhere in the area.
Analysis of Weaknesses
Weaknesses give you an idea of things to improve in your F&B business. For instance, your wait staff may create a weakness for your F&B business, since you’re dependent on them for the personal service they provide to each table. Another weakness may exist if you do not provide adequate employee training, such as showing wait staff how they should attend to tables or explaining to culinary personnel how you want food prepared and presented.
Relying on an outdated point-of-sale system or using paper to keep track of ordering and stocking is a weakness because there are better ways of calculating your stockroom, order and financial needs.
Analysis of Opportunities
Look for opportunities that help your F&B business increase its profits, such as expanding or providing different types of food and beverages. Taking advantage of trends related to eating healthier may mean featuring more organic dishes or salads on your menu. Finding ways to generate more traffic during slow times, such as in the afternoon, may represent an opportunity for growth.
Offering delivery services and take-out or setting up a drive-through to meet the needs of people on the go represents another potential opportunity.
Analysis of Threats
Competing F&B businesses located nearby represent a threat to your business, especially if you sell similar types of food or have similar dining experiences. New restaurants opening up in your area also represent a threat, since area diners have more options on where to spend their dining dollars.
Other threats consist of the potential rising price of certain foods. For instance, if you make seafood dishes and something negative impacts the shrimp market, a threat exists if you need to raise prices or find new suppliers, because you may lose business.
Established F&B business can also use a SWOT analysis to analyze a changing landscape and respond proactively. Moreover, you can do a competitor SWOT to see what others do well and if there are any gaps in the market they primarily serve.