Industry sector:

Chinese catering: Market research


When you plan your new business it's very important to research your market - how much demand there is and how well that demand is already being met.

Estimating demand

You'll want to confirm that there's enough demand in your area for the Chinese restaurant you're planning. First of all, it makes sense to check out the competition. Count how may existing eating places there are already in the locality. See how many are Chinese restaurants and how many offer different types of cuisine. Sample the food on different nights of the week in different restaurants to get a feel for how busy you are likely to be. It can be a good idea to locate in the 'Chinatown' district if there is one - but it's very important to offer something different in order to win customers. Competition is frequently intense and you may have to keep your prices down and give large portions.

Think about the nature of the local population - are there, for example, sufficient numbers of Chinese to be worth specifically targeting them with authentic cuisine?

Catchment area

Note down the different types of potential customer living and working in the area. For example, if you plan to attract businesspeople for the lunch time trade are there plenty of workplaces locally. Although you are likely to have many customers in the evenings who will arrive on foot, you will also hope to attract people from a distance. There are several things to consider when you're deciding on where your outlet will be:

  • is the area well served by public transport
  • is there ample parking nearby
  • is the area considered a safe place in which to leave a vehicle
  • does the area attract reasonable numbers of people in the evening (perhaps to nearby pubs), and is it considered to be a safe and pleasant area to visit at this time of day
  • if the area isn't a fairly central one, is there are large resident population nearby

Competitors

You'll want to make sure that enough customers will choose your restaurant rather than other eating places. Check out your competitors to see:

  • what type of food and drink they offer
  • whether they change the menu frequently to take advantage of seasonal produce
  • what prices they charge
  • whether they offer a take-away service
  • do they participate in an online ordering service like Just Eat or Deliveroo
  • what are their opening hours
  • what type of customer they attract
  • how the premises are decorated
  • what ambience the restaurant achieves
  • whether service is quick and professional

This might immediately show you that there is a gap in the market for a certain type of Chinese restaurant - for example, offering a more informal, relaxed atmosphere, which is particularly popular with younger diners. Be wary about competing mainly on price - it is difficult to offer the high quality service demanded by customers today if you are operating on very low margins.

Find out what people want

It can be a good idea if possible to talk to people in your area about your proposals. Ask them:

  • what sort of dishes they would like you to offer
  • whether they would support a take-away or delivery service
  • what opening hours would suit them best
  • whether they would prefer you to have a licence to serve alcoholic drinks
  • what, if anything, don't they like about existing Chinese restaurants in the area

Don't forget that market research can be ongoing. Once your outlet is open, talk to your customers. Find out what are their likes and dislikes and ask if there's anything they would like you to serve that isn't currently on your menu. Note down which dishes are popular and which ones don't sell well. Consider including 'specials' on your menu from time to time - if they're popular you could add them to your main menu.

Use the record sheets for your market research