As the restaurant world constantly evolves, owners and entrepreneurs need to get creative with their strategies to maximise revenue—and one way to do that is by diversifying streams.
In this article, created in collaboration with Toast, we’re exploring practical approaches to generating additional income for your restaurant. From merchandise and collaborations to catering and unique experiences, we’ll cover how to stay ahead of the competition and increase your bottom line.
Why diversify revenue streams?
Restaurant operators should always consider introducing new revenue streams to boost profits and enhance the dining experience. Here’s why diversifying restaurant revenue streams is so important:
For guests – Consumer preferences and behaviours are always changing. Providing your guests with new options can make their experience better and more exciting. At the end of the day, happy customers keep the lights (and cookers) on.
For restaurateurs – Depending solely on dine-in sales can be risky, as we’ve seen during the pandemic. Introducing alternative revenue streams like catering, meal kits, or delivery services can attract customers who might not have time to dine in. This can widen your customer base and increase sales. Plus, offering diverse options can showcase your restaurant’s unique offerings to a broader audience, leading to greater brand recognition.
Overall, diversifying your offerings can build customer loyalty while increasing revenue. However, the success of these new streams depends on thorough market research, understanding customer preferences, maintaining quality, and effective marketing strategies.
The good news is that we’re here to help with ideas to get your creative juices flowing, empower you to stay ahead of the competition, and increase your bottom line.
Top 7 additional revenue streams for your restaurant
1. Merchandise
An idea that’s so good, you could put it on a shirt. Selling restaurant merchandise and branded apparel like t-shirts, sweatshirts, and hats is a straightforward way to boost revenue. You can offer these items both in-store and online to maximise conversions. Vendors like Custom Ink, Vistaprint, and Canva can help you create your goodies.
Example: Bone Daddies, a London-based restaurant, successfully sells its own merch, fostering a strong connection with loyal customers and promoting the brand in a fashion-forward way. Plus, their cheeky copy and attractive designs help the merch stand out.
2. Cross-brand dining
Consider partnering with other businesses to create unique, cross-brand collaborations. These partnerships can enhance your off-premise dining offerings and attract a broader customer base. For instance, you could collaborate with local breweries for drink and food pairings, with your dishes complementing their brews.
- Example: Smash It in Dundrum has teamed up with Rainforest Adventure Golf, enabling customers to order food via QR codes in the golf café. This unique partnership not only provides convenience but also introduces the restaurant to a new audience, expanding its customer base.
3. Curated bundles
Curated bundles are a fantastic way to generate additional revenue and provide a unique experience for your customers. These bundles can include a combination of your restaurant’s signature items, speciality ingredients, and snacks, allowing customers to enjoy a taste of your restaurant at home. Curated bundles can deepen the connection between your kitchen and your customers, creating a memorable experience that goes beyond a typical meal.
- Example: Ely Wine Bar in Dublin sells curated wine packages online that complement its wine-tasting and event offerings. This approach diversifies its revenue streams and enhances the overall customer experience by providing a cohesive and thoughtful selection of items.
4. Special events
Hosting in-person events at your restaurant is an excellent way to attract new customers. Depending on your restaurant concept, there are many creative ways to plan these events. A sports bar could host watch parties with a pre-set menu, a chic cocktail bar might consider themed parties and a fine-dining restaurant might offer cooking classes.
- Example: Cat and Cage in Dublin is known for its karaoke and comedy nights, drawing in crowds and creating memorable experiences (depending on the song choices). These events appeal to diners and future regulars who might have otherwise missed the offering.
5. Private dining
Offering private dining experiences can attract groups looking for a more intimate setting. This can be a great way to cater to special occasions like birthdays, anniversaries, and corporate events. And for the brave, you can always enter the wedding market!
- Example: Le Bab in the UK offers private dining options, providing a unique and tailored experience for guests who want a special space for their celebrations. This not only increases revenue but also enhances the restaurant’s reputation for personalised service.
6. Collaborative events
Partnering with brands and hosting events together can draw in new crowds and create buzz around your restaurant. These events can range from themed nights to collaborations with drink brands or local businesses.
- Example: KOL Mezcaleria in London has partnered with famous bars and restaurants from around the world with ‘The Explorer Series,’ where they bring in specials and cocktails from other bars for an evening. These events can create memorable experiences for guests and generate additional awareness and revenue for both brands.
7. Unique experiences
Offering unique experiences can really set your restaurant apart and attract new customers looking for something special. These experiences go beyond just a meal and create memorable moments that keep guests coming back.
Think about hosting events like all-day festivals, murder mystery nights, or interactive activities. These could include cooking classes, wine tastings, or cultural evenings that showcase specific cuisines or traditions.
- Example: Arcade Food Hall offers a variety of unique events that appeal to diverse tastes, from all-day DJ sets and summer parties to pool tournaments and Day of the Dead celebrations. These activities create a fun and engaging atmosphere that keeps the venue feeling fresh and alive.
How to market your new offerings
Now that you have some fresh ideas for 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 fit for your brand.
Market research
First, do your market research. Market research helps you identify the needs, preferences, and behaviours 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 helps you make financially sound decisions and prioritise offerings that have the most value.
Social media
Next, head to your social media 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, 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 video with all your new products!
Quality over quantity
Quality should always be your priority, whether you’re a new restaurant or an established one. Keep this in mind when planning your additional revenue streams, especially when it comes to any meal kits or offsite offerings. The quality of your offerings should be just as good at home as it is in person. Don’t sacrifice quality for convenience—your guests will notice. This also applies when creating t-shirts or any other new merchandise. Your customers deserve high-quality products, not future landfill.
Keep exploring restaurant revenue streams
In the ever-changing and competitive restaurant world, it’s always good to keep an eye out for new opportunities. It’s perfectly fine to take a page out of other successful restaurants’ books. Also, watch what your own customers are buying. If they’re always asking about a particular sauce or seasoning you use, why not bottle it up and sell it? Keep experimenting and trying new things, and you’ll find some great new revenue streams to boost your bottom line. And remember, you’re not alone! Tools like Toast can help you manage both your food service and retail operations smoothly.
This blog was crafted in collaboration with Toast. Together we are creating an integrated solution for managing restaurant operations and ePOS systems. Discover more innovative insights on reducing food waste in restaurants in Toast’s feature: A guide to tracking and reducing food waste in restaurants.
