Evaluating Your Restaurant Competition Before You Open
Regardless of the concept of your restaurant, or your location, chances are that you will find yourself in competition for your target market. Competition in the restaurant industry is not necessarily a bad thing. You can have healthy competition while still attracting an ample amount of customers to your business.
However, it is in your best interest to learn as much as you can about your competition. This knowledge will help you make your products, amenities and marketing stand out.You can use this knowledge to create marketing strategies that will help take advantage of your competitors' weaknesses and strengthen your own brand and concept.
You can also figure out if there are any threats posed by your direct competitors and indirect competitors, and if the threats outweigh the potential benefits of opening in this particular location. All of this knowledge will help you make a realistic evaluation about how successful you can be.
The best way to accomplish this is to do your research and understand who your competitors are and what they offer
Who is your competition?
The first thing you need establish is exactly who your competition is. This requires canvassing the location near and around your potential restaurant and figuring out who your direct competitors are. A direct competitor is considered any restaurant with a similar menu, pricing, theme or target market to yours. Your area is defined by as any restaurant within a 15 minute drive from your own, but this varies depending on your location. In a city, a competitor can be around the corner, right across the street, or down the block.
Not only will you need to figure out who your direct competition is, but also who your indirect competition is. Indirect competition is a much broader concept. It can include any establishment that has the potential of taking your customers away, even if their concept is vastly different from yours.Be it a movie theater, a bar, a take-out place, or a gourmet supermarket, know who they are and their proximity to your location. With the popularity of the internet, your competition may also come from food establishments online that serve your area with free deliveries and other promotions and gimmicks.
How do you find out about your competition?
You can learn a lot about your competition from a hands-on perspective: by sampling their food, checking out their service and experiencing their ambiance, you can have a good grasp of what they are all about. You can also speak directly to customers who frequent there, and ask them their opinions of the place.
Another way to find out about your competition is by going online to read reviews about them. There are many places on the internet that post restaurant reviews and you will often find good feedback on these sites. You should also look at your competitors website and see if what they are offering on their site is realistic in comparison of what they offer at their establishment. For example, are their pictures online much nicer than the real place? Use any discrepancies to your advantage.
Other information can be gleaned about your competition from sources such as newspapers, industry gossip, suppliers feedback and your own customers. Listen closely and pay attention to any and every piece of information that can be learned about your competitors and you will have a greater chance of being able to do better than them.
What are the advantages of choosing the competition?
Another perspective you may take is to look at your restaurant from the vantage point of a customer. What would make the competition appeal to them over your restaurant? Is their location one that easily attracts customers while yours does not? Maybe they have more space than you do, or a larger parking lot. Compare the menu prices. Do they have better menu prices than you plan on having? Anything that could cause a customer to choose another food establishment over yours, should be considered.
What should you do with all this information?
All the information you gather should be analyzed to see what is relevant to your establishment and what is not, what can be fixed and what cannot. Using the example above, if a customer prefers a competitor due to the fact that they have a parking lot and you don't, check out the possibility of finding a lot nearby that would be willing to do a deal with you for free parking for your customers. On the other hand, if your competitor has more space than you do, you may not have any way to change that. You need to determine what you can change about your establishment and what cannot be changed in your quest to beat your competition.
However, you can turn some of the things that cannot be changed into opportunities. Using the example above, if your space is too small, change the lighting, the dining room layout, or the set up of the hostess station or entrance, to create a larger feeling to your space. The same idea can be applied to many of the disadvantages that you find when comparing your place to the competition.
Additionally, you can upgrade your own restaurant to be a cut above your competition. Look at what your competitors don't have, and add it to your restaurant from opening day. If your competitors don't serve alcohol, you may want to get an alcohol license; if they don't have enough wait service, you will want to make sure that you do.
If you know your competition you stand a much better chance of succeeding, but only if you implement the new ideas and employ a revised marketing strategy based on what you have learned from all your research.The possibilities to improve your restaurant are many if you have an open mind and are willing to take a critical look at what you have to offer and what you can improve upon.