With the landscape changing to a more challenging environment for operators, there is more interest in revenue streams outside on-premise consumption. Done correctly, this can add a significant revenue stream without a large increase in overhead.
For operators who want to build another business within their existing restaurant, here are five ways you can make more money with your business.
1. Catering
The foundation of a successful catering business is determined by the quality of your food. You must be able to create a memorable experience with the quality of your food in-house before it can be catered to an event outside your venue.
If the quality of your food is high, the next step is to have staff who know how to cater an event correctly, and have the proper equipment, supplies and transportation to deliver a quality experience. When you are sure that the quality of your catering experience is what it needs to be, you must market it to your customers and ensure that your business is top of mind when it comes time to plan their next event.
2. Retail
This includes gift cards, clothing, access fees, and quick food or dessert stands conveniently placed at the entrance or exit. There are some restaurants that do significant sales off their retail business. In some cases, their retail business can exceed on-premise consumption.
For instance, I have worked with a client who operates as a restaurant and bar for patrons of a local park, and there is a retail store attached to their restaurant for those people who just want to stop in for a quick coffee or ice cream. There are several weeks where their retail business is far more lucrative than their on-premise operation.
I am also aware of another restaurant operator who has created an enticing bakery display stand at the exit, from which more than 40% of his sales are derived. Guest come in quickly to buy snacks, and people leaving the restaurant take desserts to go. There are a multitude of convenient purchases that every business can take advantage of with correct placement.
3. Manufacturing
Can you produce any of your inventory in-house? Many operators are now taking advantage of manufacturing licenses, investing in infrastructure that allows them to brew their own beer and distill their own spirits. Doing so allows operators to save on costs for in-house inventory. This opens up the opportunity to sell their products to other bars and restaurants, liquor stores, and as retail to their guests by creating a separate retail space.
A restaurant that manufactures its own spirits is much more valuable than a business that purely sells products for on-premise consumption.
4. Delivery
What are you doing to increase your delivery business? Most people are completely reactive to this aspect of their operation. Very few operators take the next step of finding out who ordered their food and utilizing that data for future follow up.
Read this: Food & Drink Delivery Disruptors: Threat or Opportunity?
Delivery apps show who ordered what, their phone number, and where they live. That is information you can use to establish a direct line of contact and build a relationship via newsletter or any other means. To stimulate your delivery business, you need to build your contact list and use direct forms of media to maintain a relationship to stimulate future purchases.
If you build a large list and take steps to maintain contact with them, you will establish more consistency in your delivery business.
5. Interesting Events
Grocery stores become community centers when they run cooking classes. Bars become training centers and create hiring efficiencies when they run bartending schools. Restaurants become event centers when they host dinners featuring brewmasters, wine and spirits experts, and food.
Then there are offsite events like winery visits, golf tournaments, team sports, brewery tours, and community barbecues. These events offer alternative experiences you can offer that become affiliated with your brand and are not confined to being in your physical building. These experiences also allow you and your staff to build deeper relationships with your guests, leading to more consistent repeat business.
By hosting experiences where fun or interesting is the central theme, you give yourself a completely different way of reaching your customer that can add a significant profit.
About the Author
Kevin is an operations consultant with over a decade of experience working directly with bar, restaurant and night club owners on all points of the spectrum: from family owned single bar operations, to large companies with locations on an international scale. Kevin works with them all and understands the unique challenge each kind of company faces.
He is the author of a book entitled Night Club Marketing Systems – How to Get Customers for Your Bar. He is also a regular writer for Nightclub & Bar, providing information high level operators seek to get the extra edge in their marketing, sales and operations.
He continues to write today, providing specialized information directly to night club, bar and restaurant owners from his workshops, newsletters and magazine articles. He is also active in the field, operating an inventory auditing practice with Sculpture Hospitality.