Business Plan Writer
$425 Flat Rate
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Business Plan Writer
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2018

Cafe SWOT Analysis

 

Strengths

 

Cafes are a prominent aspect to any society. They have been around for thousands of years, and they will continue to do so. These businesses are not subject to changes in the general economy as people will continue to want coffee and small food products at all times. Additionally, while many people are concerned with the ongoing issues of automation in today's society - cafes are valued for their independence and spirit. As such, there are only a few issues that cafes and coffee houses will face as time progresses. The margins generated from sales of coffee are very high (upwards of 80%), and they are able to have low inventory costs. The barriers to entry for a new cafe or coffee house are considered low (startup costs depending on location can range from $10,000 to $50,000).

Weaknesses

 

These businesses generally have high operating costs as they are required to have a highly visible retail location from where they can sell their coffee products. Additionally, small cafes always face competition from major chains. This is going to be a continued trend. However, many people specifically seek out small independent coffee chains instead of multinational retailers. As such, it is imperative that a cafe owner properly position their cafe brand within their respective market.

 

Opportunities

 

Small cafes have started to sell packaged coffees, teas, and related items within their facilities in order to increase revenues. The margins on these types of products are extremely high, and they can provide a strong secondary stream of revenue for an independent cafe. Many cafe operators also seek to develop multiple locations in order to benefit from economies of scale (purchasing larger inventories of coffee).

 

Threats

 

The primary threat faced by all cafes are ongoing competitive issues. While the price of coffee does fluctuate from time to time, these fluctuations only have a modest impact on a Company's profit and loss statement. As discussed above, in order to remedy the primary competitive threat faced by the cafe business, the owner must look for ways to effectively differentiate itself in the market.

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