5 New Restaurant Revenue Streams To Increase Your Bottom Line
In 2023 with high competition and seasonality consider new revenue streams to increase your bottom line. Here are 5 examples.
As the restaurant industry is constantly changing, restaurant owners and entrepreneurs are continually seeking innovative strategies to maximize revenue generation.
In this article, we’ll delve into a range of creative and practical approaches to generate new revenue in your restaurant. From merchandise & meal kits to catering & unique dining experiences, we’ll explore how you can stay ahead of the competition and increase your bottom line.
Why consider alternative revenue streams?
Restaurant operators should consider new products and revenue streams to both increase their profits and improve their dining experience. Here’s why:
For guests - Consumer preferences and behaviors are constantly evolving. Providing your guests with new options can improve customer experience by giving them benefits they may want.
For restaurateurs - Relying solely on dine-in sales can be risky, as we learned from the pandemic. In addition, offering alternative revenue streams like catering, meal kits, or delivery services can attract customers who might not have the time to dine in. This can widen your customer base and increase sales. Alternatives can also provide opportunities for restaurants to showcase unique offerings to a broader audience, which can lead to increased brand recognition. Lastly, new menu items and products can help fill those slow gaps when it comes to seasonality.
Overall, adding new revenue streams to your offerings can help build customer loyalty while also increasing your bottom line. However, the success of these streams depends on thorough market research, understanding customer preferences, maintaining quality, and proper marketing strategies. Here are some top ideas to get your creative juices flowing, and how to best market them.
Top 5 additional revenue streams for your restaurant business
This is the obvious choice! Selling restaurant merchandise and branded apparel such as t-shirts, sweatshirts, hats, and more is a safe option. You can sell these both in-store and in an online shop. Your regulars will love showing off your brand, and it’s free advertising for your business. Some vendors that can help you create your branded apparel include Custom Ink, Vistaprint, and Canva. To set up retail on your POS check out Toast Restaurant Retail
2. Meal kits
Beyond your standard online ordering and takeout menus, consider adding meal kits to your off-premise dining offerings. Meal kits can include date night kits, drink and food pairings, and make-your-own pizzas. Meal kits are arguably the easiest products to create. You can sell kits of the same ingredients you cook in-house, to guests to make in the comfort of their homes. Your loyal customers who’ve already tried your entrees might enjoy purchasing these to experience your tasty offerings from home.
We know you don’t want to give away all your secrets- but a cookbook is a great option for additional revenue. Cookbooks can serve as an extension of your restaurant's brand. Loyal customers can enjoy familiar flavors from the comfort of their homes. This can strengthen the connection between your brand and your customers. Cookbooks can also help build a sense of community around the restaurant. Potential customers might share their cooking experiences online, creating a space for engagement.
4. Catering & special events
Hosting in-person events at your restaurant is a great way to attract new customers to your business. There are many creative ways to plan these special events, depending on your restaurant concept. For example, a sports bar could host watch parties with a pre-fixed menu. A chic cocktail bar might consider The Bachelor watch parties and a fine-dining restaurant might consider cooking classes. This South Boston restaurant, even capitalized on Taylor Swift’s popularity and hosted a Taylor special event night. However, you should also always have a standard order form for guests to plan their own event/dinner party at your restaurant. Check out this free restaurant banquet event order (BEO) template to help your restaurant optimize incoming catering requests and streamline documentation.
Catering can also be included in your takeout & delivery options. Your restaurant should have a standard catering menu, with different bundles and sizing options depending on how many guests need to be fed. Restaurants often have excess kitchen capacity and staff during slower hours, and catering allows for better utilization of these resources. Catering events also allow your restaurant to showcase its culinary skills to a wider audience. This exposure can attract new customers who then might consider visiting your restaurant for dine-in experiences.
5. Gift cards & loyalty programs
According to data aggregated by SaveMyCent, the global gift card market was worth $295.2 billion in 2020. That’s no small pocket change. Selling gift cards provides a source of immediate revenue for your restaurant, even before the cardholders redeem them for meals. Not to mention, when customers purchase gift cards, they might introduce new potential patrons to the restaurant when they gift or use the cards, spreading brand awareness.
Although “loyalty” isn’t a tangible new product, it’s essential to generate more revenue. Loyalty programs are wildly popular in 2023, and the hype is here to stay. The fact of the matter is that guests enjoy receiving perks for their time and money spent in your restaurant. On average, repeat loyal customers generate 10x more revenue in their lifetime than new customers. On top of that, 20% of your customers account for 80% of your total revenue, so it's important to delight these top customers and keep them coming back. Lastly, your restaurant should always be aiming to improve your guest experience, and offering loyalty perks/points can contribute to this.
How to market new offerings
Now that you have some fresh inspiration on what your restaurant can offer, it’s time to plan how to get the word out! Here’s how to market your new offerings and make sure they’re the best options for your specific restaurant.
First thing first, do your market research. Market research helps you identify the needs, preferences, and behaviors of your target audience. This information is essential for developing revenue streams that resonate with your customers and meet their expectations. Ask yourself some of the following questions and write them out:
What are your competitors selling?
Who is your target audience?
Who is your ideal customer, and what would they purchase?
What restaurant merch/products do you buy yourself- and why?
Your goal should be to find a clear idea of who you’re selling to, what you’re selling them, and why they should choose you over your competitors. Researching the potential return on investment (ROI) for different revenue streams also enables you to make financially sound decisions and prioritize offerings that have the most value. For more information on how to conduct a successful market analysis check out this article.
Next, go to your social accounts and share the news. This is exciting for both your restaurant business and your guests! Let your customers know what you’re selling and where they can purchase it (online, in-store only... etc.). Make sure to include any relevant links in your bio for easy access. Right now, short videos are popular so consider posting a quick Instagram Reel with all your new products!
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Quality over quantity
Quality should always be your priority whether you’re a new restaurant or a long-time establishment. Keep this in mind when planning your food delivery menus, meal kits, and anything else your customers may be taking home. The quality of your offerings should be just as good in person as they are at home. Do not trade out quality for convenience, your guests will know. This is also important to keep in mind when buying t-shirts, or any other new merchandise. Your customers deserve high-quality merch for their money.
Always keep exploring restaurant revenue streams
In an industry that’s both constantly changing and competitive, always keep an eye out for new opportunities. It’s okay to get inspiration from other restaurants. Also, keep track of purchasing trends at your own restaurant. Are people constantly asking about a certain sauce or seasoning you use? Consider bottling it up and selling it. Always keep exploring and sure enough your new revenue streams will increase your bottom line. And remember, you can manage both your food service and retail businesses with Toast.
DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.