New restaurants and new restaurant locations are popping up every day, making it one of the most competitive industries. It requires more than good food and marketing to make a new eatery successful.
That's why our market research company often encourages new establishments or those opening a new location to conduct a restaurant feasibility study. This is also referred to as a "market analysis."
The insight and data gathered from restaurant feasibility studies will predict how likely the eatery is to be successful based on a number of different factors.
Of all the market research studies available for a new business, feasibility studies are the most advantageous.
Before we get into the why and the how let’s briefly discuss the what.
What is a restaurant feasibility study?
A restaurant feasibility study is a type of market research that assesses the concept of a restaurant or the potential new location to predict the potential supply and demand.
It is a hybrid market research approach. Meaning, it combines both qualitative and quantitative elements.
Feasibility studies in the restaurant industry can answer questions such as:
- Is there a demand for this type of restaurant?
- Is there a risk in investing in this new restaurant?
- How frequently will community members eat at my restaurant?
- Who will be my main competitors?
- What are my competitors currently doing that the community likes and dislikes?
- Where are there gaps in the market that my restaurant can fill?
Our feasibility studies company utilizes core methodologies to paint a picture to dictate how likely the success of a restaurant will be. This is a key benefit of restaurant market analyses.
💡 The Key Takeaway: Conducting a restaurant feasibility study reveals important insights for a new restaurant idea. Above all, it will help new restaurants avoid failure.
Recommended Resource: Download an Example Market Analysis Report
Benefits of restaurant feasibility studies
Finding success in the restaurant industry is really tough. In fact, 1 in 3 restaurants won’t last beyond their first year in business.
How can you feel confident your restaurant will survive past the one-year mark?
Before investing too much money and time into a new restaurant, invest in a market analysis! This relies on predictive analytics to help create better business decisions.
In short, data-driven decisions can promote the success of a restaurant. It's also a great study to present to potential investors.
When working with a restaurant feasibility studies company like Drive Research, your team will receive more than charts and data. We work as both research analysts and consultants to assure your new venture is set up for success.
Drive Research acts as an extension of your team to recommend the best approach possible.
💡 The Key Takeaway: There are countless restaurant feasibility study benefits. This type of research offers data that can measure the potential success of an eatery.
Components of a restaurant feasibility study
A restaurant feasibility study is typically broken down into three components. Again, it offers a mixed-mode approach of both quantitative and qualitative research.
The three components recommended by our feasibility studies company are outlined below.
Component #1: Syndicated Research
The first step of a restaurant feasibility study for a restaurant is conducting syndicated research.
This helps provide overall market insights and demographic data.
At a high level, this component is advantageous for new ventures because it highlights market supply and shifting target populations.
Component #2: Competitive Assessment
It's no secret that the restaurant industry can be tough to break into. Before opening your doors to business, observe the playing field.
What restaurants will serve as your biggest rivals? This is an important question to ask! Thankfully, a competitor analysis can help you.
This step evaluates competitor pricing, the share of the market, customer opinions, and more.
Learn more about the benefits of conducting market research on your competitors in the video below.
Component #3: Market Survey
Lastly, market survey research is our third recommended component.
A market survey weighs the concept and location of your eatery. This helps you understand the appeal, limitations, and how often diners will eat there.
💡 The Key Takeaway: There are multiple components of a market research feasibility study. Each component is designed to gather comprehensive data to assist in data-driven decision-making for a new restaurant.
Working with a restaurant feasibility study company
If you are looking for a research partner for your restaurant feasibility study, Drive Research can help. It is important to understand that no two feasibility studies are the same.
Like most of our market research studies we do not use a cookie-cutter approach, rather take the time to understand objectives, specifications, and budget in order to recommend the best approach.
Step 1. Proposal
First, we'll send you an in-depth proposal with our recommendations.
Proposals include project goals in a simple format. A good third-party research team will ensure the document includes all parts of the market analysis.
Elements in a market research proposal include:
- Project approach
- Design
- Fieldwork details
- Reporting
- Timeline
- Cost
Recommended Resource: Download Our Free Market Research RFP Template
Step 2: Kickoff Meeting
Going forward, we'll schedule a kickoff meeting. This is an ideal time for introductions and to discuss key objectives.
Kickoff meetings allow clients to connect with their third-party team. Both groups need to have a strong relationship so information can be shared easily.
Meetings will cover everything from client concerns to shared goals and other relevant information. In addition, you'll receive a full rundown of the market research process.
Step 3: Workplan
Next, Drive Research will create a project workplan to outline the responsibilities of each party.
The components of a project workplan range from task details to completion percentages.
Workplans emphasize honesty within the project–all the important information is there to see. Additionally, other important notes will be included in the document.
Step 4: Fieldwork
This stage is based on what component(s) of the feasibility study you signed on for.
As a reminder, the components we recommend include:
- Syndicated research
- Market survey
- Competitive assessment
However, our custom market research services allow you to mix and match based on your timeline, objectives, and budget.
Step 5: Post fieldwork
Once your survey fieldwork is complete, we run our final audits. This ensures survey data is clean and ready to draft into a report.
Cleaning research data is essential.
Data that hasn’t been reviewed can be a detriment to an entire project. To avoid this, the data will be “cleaned.”
Meaning, researchers will keep an eye out for any inconsistencies within responses.
These may be:
- Duplicate responses
- “Too-fast” completion times
- Answer "straightlining" (when respondents choose the same answer for multiple questions)
Step 6: Report
Next, Drive Research will create a report based on the findings of the restaurant feasibility study.
This includes an executive summary, recommendations, a breakdown of question-by-question results, an infographic, and more.
Whether you receive a topline or comprehensive market research report, the goal is to give clients a clear path of action based on the data presented.
Step 7: Debrief Meeting
Lastly, we'll schedule a debrief meeting to review the report findings.
This step answers the remaining questions. Now, your team can take action on the in-depth and customized insights!
💡 The Key Takeaway: A market analysis follows a number of steps. As a result, the process will be clear and easily understood.
Contact Our Restaurant Market Research Company
Thinking about opening a new restaurant or expanding into a new market? A restaurant feasibility study can get your establishment the answers it needs.
Drive Research is a market research company located in New York. Our team will create a customized feasibility study template, ensuring actionable data.
Contact Drive Research to get started!
Emily Rodgers
A SUNY Cortland graduate, Emily has taken her passion for social and content marketing to Drive Research as the Senior Marketing Manager. She has earned certificates for both Google Analytics and Google AdWords.
Learn more about Emily, here.
