Succeeding in the restaurant industry means staying afloat in extremely competitive waters. Knowing who your competitors are and why they are your competitors is key information for any restaurant entrepreneur who seeks to grow his or her business.
The first step in identifying your competitors is to take a note of all of the restaurants or food services providers in a 20 mile radius of yours. This list contains your most obvious competitors, especially those that serve the same type of food or offer a similar ambiance.
After dividing your list of competitors into direct competitors (those restaurants similar to yours) and indirect competitors (those restaurants in the 20-mile radius that differ from yours), take the time to watch your direct competitors closely to see what they are doing. How do they market new menu items, where are they marketing, and what forms of marketing are they using?
You should also keep an eye on your indirect competitors and see what they are selling, and how closely their menu comes to yours on certain types of foods. Include grocery stores in this observation, especially since many of them are now offering food service at deli counters, including sushi, gourmet sandwiches, and specialty pizzas or pastas.
Next, you need to get online and read what others are saying about these businesses. You should be able to find online reviews in a variety of places, including travel sites and forums, and learn valuable information about what both locals and tourists expect when they come to your area in search of a place to dine.
Finally, look at the points your restaurant has to offer compared to what your competition has to offer. Ask yourself important questions such as ‘how do our concepts differ?’ and ‘how does our pricing differ?’ Consider factors such as location, parking, accessibility, visibility from the main thoroughfares, etc.
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