SWOT Analysis for a Coffee Cafe
There are nearly 33,000 coffee shops in the United States, ranging from solo mom-and-pop operations to power java houses such as Starbucks. That is up 16% from 2012, according to a 2017 report by market research firm Mintel. Determine how your shop stacks up to the competition and how to enable it to rise toward the top, with an evaluation of your business' strengths, weaknesses, opportunities and threats. Commonly known as a SWOT analysis, this could make the difference between survival and extinction in this highly competitive, caffeinated realm.
What do you have over the competition? With so many non-coffee shops from McDonald's to convenience stores hawking specialty coffee and espresso beverages, identify the strengths you have got in your shop. This could be your location near a major intersection; or, it could be a location adjacent to a large office complex or a location in a power center. Having low overhead, new equipment and high employee morale should make this list, too. And do not forget that having exceptional coffee or a well-known brand are powerful tools.
This may be a tough list to compile, but honesty works best. Weaknesses could easily be the opposite of the recognized strengths of business location, the age and quality of your equipment, your rent and your staff spirit. Look at vulnerable areas that could be stepped up, such as customer service, your menu selection and your coffee's inimitable taste or your coffee's "blah" taste. Perhaps your shop could use a fresh coat of paint or a more diligent cleaning after rush hour.
Now that you have identified what is going right for you and what is not, ponder the untapped possibilities. Evaluate your strengths and determine how you could apply them. If you carry a recognizable coffee brand, consider packaging the beans or grounds for customers to brew at home. Harness an enthusiastic staff attitude by encouraging them to remember the regulars' names and their usual orders or to strike up a brief conversation with customers while they wait for their orders.
If you have experimented with offering cold-brew coffee or other ready-to-drink beverages, consider making that segment a regular part of your menu, as the popularity of these drinks is on the rise.
Some variables are beyond your control. You can not control anything about a new coffee shop across the street, a swing in consumers' preferences or wide-sweeping trends. Acknowledging these threats, however, enables you to prepare in advance, should these factors arise. This could mean evaluating your marketing options to increasing your visibility or keeping abreast of what is going on in the industry so that you will be in the know as to what will be your customers' next "must have".
Developing a strategy that minimizes the impact of industry changes will help you deal with these changes, if or when that need arises.
If your java business needs a boost, think about these pick-me-up options:
Create a loyalty program. Imagine seeing a new customer's face light up when she gets a Buy-Nine-Get-the-10th-Free card and later again when you see her bright smile as she flashes the card with slots one through nine already punched — and now, she is eagerly awaiting her freebie. Loyalty programs keep them coming.
Create a signature drink that makes it easy for people to remember your coffee cafe.
Encourage multiple sales by placing traditional coffee accoutrements such as muffins, cookies and cakes near the point of sale.
Improve efficiency so that you create a high volume of sales by setting up the work station so that your barista barely needs to move his feet, and so that he is not competing with his co-workers for space.
Step up the to-go business. This customer pays the same price as the one who sits down and lingers over a single cup for hours but does not have any of the occupancy costs. Wi-fi has benefits, but you will serve 10 to-go customers by the time your sit-down, WiFi customer has finished her first cup while she updates and responds to her social media pages.