Rebuilding: Diversifying Revenue Streams
Now more than ever, restaurants are looking for ways to diversify their revenue streams. Whether you’re completely closed, open for pickup and delivery only, or reopening your doors at limited capacity, we’ve compiled a list to help you think through the options—everything from grocery and CSA boxes, to gift cards and merchandise, to virtual classes, and more.
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Meal Kits, Market Pantry / Grocery + CSA Boxes ⟶
Gift Cards, Dining Bonds + Merchandise ⟶
Alternative Uses of Private Dining Space ⟶
Pickup + Delivery
Since the beginning of quarantine mandates, operators around the U.S. have turned to curbside pickup and delivery as a means to feed their community when they were unable to welcome guests into their restaurants. For an in depth breakdown of how to onboard pickup and delivery into your business, please visit our article on Delivery + Logistics article. In this article, we help think through operational, financial, and logistical considerations regarding pickup and delivery.
Deliver Economics Calculator | As we reiterate in our Reopening Critical Path, understanding your cash on hand and your budget is crucial. This extends to what you offer and how you serve your customer through pickup and delivery. In partnership with Figure Eight Logistics, we are offering a Delivery Economics Calculator, a spreadsheet that calculates profit margin on menu items and delivery orders. Item margins are calculated by uploading food and paper costs, then pairing menu items with their respective packaging.
You can create mock orders that include commission, delivery fees, and order packaging (i.e. delivery bags) to provide a full picture of profitability.
Alternative Meal Periods
As you evaluate your budget, this is a time to reevaluate your hours of operation and meal service offerings. Don’t feel tethered to previously existing hours of operation. Take a step back to evaluate which meal periods and hours of operation make the most sense for your business in the current climate.
If you were previously only open for dinner, you may want to consider offering lunch or even weekend brunch. If you think strategically about your menu offerings, which meal periods allow you to provide the most value to guests? If you have an email list or social media, this is a great time to engage your audience by asking your community how best to serve them—this is relatively easy to do via an email survey or social media poll.
Note | Ensure these new meal times are updated on your website + social media.
Meal Kits, Market Pantry / Grocery + CSA Boxes
Understanding that many restaurants are closed to dine-in guests or mandated to reopening at reduced capacities, consider offering meal kits, market pantry, grocery items, or weekly community sourced agriculture (CSA) boxes.
This provides guests with opportunities for support your business while allowing them the option to cook at home with less prep. It is an alternative to the grocery store at a time when they may not want to visit local stores and offer them an alternative (and likely more direct) access to local ingredients and produce. In order to predict your purchases and to minimize waste, encourage or require guests to place orders at least 24 hours in advance so you have a better handle on inventory and ordering needs.
Here are some examples of those who we think are doing this particularly well:
Bell’s | Los Alamos, CA
Colonia Verde | Brooklyn , NY
Gracious Bakery | New Orleans, LA
Jeffrey’s Grocery | New York City, NY
Levee Bakery Co. | New Orlean, LA
Jefferey’s Grocery | New York, NY
Levee Baking Co. | New Orleans, LA
Beer, Wine + Liquor To Go
A restaurant’s ability to sell alcohol to-go depends on state laws, but more and more states are easing restrictions. If this is an option, it is a great way for restaurants to upsell with a meal or to serve as an alternative to a local beer, wine, or liquor store, particularly if guests are able to purchase bottles from your list they would otherwise only have access to while dining in your restaurant.
Here are some examples of those who we think are doing this particularly well:
Attaboy | Nashville, TN
Cure | New Orleans, LA
Popina | Brooklyn, NY
Shacksbury Cider | Vergennes, VT
The Four Horsemen (“Next Door Space”) | Brooklyn, NY
Urban South Brewery | New Orleans, LA + Houston, TX
Gift Cards, Dining Bonds + Merchandise
Gift Cards + Dining Bonds
Gift cards and dining bonds are useful methods for engaging with your customers and allow them to make an investment in the restaurant to use at a later date. Depending on your POS and website providers, these add-on services can easily be implemented.
If you are using gift cards as a cash influx, restaurants should strongly consider creating redemption terms for gift cards, particularly as they start to think about reopening their doors because this will directly affect their cash flow. It may be wise to think about terms that explicitly state guests can redeem gift cards a certain amount of time after the purchase date (i.e. six months after purchase).
We previously posted an overview of the Tax Implications on Gift Cards + GoFundMe Campaigns for Small Businesses. Although a way to receive cash for the company, it is important to understand the taxes and allocation of funds. Note: If funds are donated in partnership with or through a 501(c)3, donors receive receipts from PayPal Giving Fund via GoFundMe, which may allow them to claim tax benefits. Please consult your CPA for further details.
Merchandise
Merchandise is a great alternative revenue source (with a long shelf-life!) and brand builder for your company. There are many printing and manufacturing companies including partners such as This T-shirt and Merch 4 Relief to create custom apparel. A great example is Turkey + The Wolf in New Orleans who produces and sells a handful of limited edition merch throughout the year.
Alternative Uses of Private Dining Space
If your restaurant has private dining space, you may want to consider the following until you’re able to use it for private events at full capacity:
Pack-Out | Consider using this as a dedicated space to organize pickup + delivery orders.
Retail Display | Display market pantry items as well as beer, wine, and liquor.
Reservations | Add PDR tables that are in line with your state’s social distancing and capacity guidelines—this may be a good option for a group of friends or family who feel comfortable being in the same space together.
In-Home Private Dining | While guests may not feel comfortable hosting a group dinner in a restaurant, and this may be restricted by state guidelines, consider offering in-home private dining with a fixed price per person for food and wine, as long as this can be done safely with proper protocol and necessary personal protective equipment (PPE) outlined in advance.
Classes: Virtual + In-person
If quarantine has taught us anything it is that technology allows us to be together even when we are physically apart. Classes and digital events (such as Canlis in Seattle’s Bingo Night) are a great way to engage your guests and extend your hospitality into their homes.
Consider offering classes taught by your team (FOH + BOH), whether virtual or in-person. We’ve included some examples below:
Chef Nini Nguyen
Cooking classes with Top Chef Nini NguyenEater Atlanta
Restaurants Offering Virtual Cooking Classes, Cocktail Demos, and Wine Tastings (Eater)Eater Detroit
Tune In To Detroit’s Online Cooking Classes, Wine Tastings, and Cocktail TutorialsSpeaking Broadly by Dana Cowin
#TinyKitchenMiracles, a series of cooking videos done by the guests on Speaking Broadly, a radio show on Heritage Radio Network
Other Creative Ways to Engage with Your Guests
While these may not be revenue drivers, restaurants and chefs are finding creative ways of keeping your guests engaged even when they can’t take care of them in person. Here are some fun examples:
Canlis
Canlis in Seattle hosts a Bingo on Friday nights to enjoy in the comfort of your own home. Virtually compete with other diners for a chance to win the grand bingo prize. All deliveries, family meals, CSA boxes, and Cocktail kits include BINGO cards (but they opened it up to their all guests — no purchase necessary).Christina Tosi
Each day at 2 pm ET Milkbar’s Christina Tosi hosts a baking club (and a daily Spotify playlist) and shares ingredients for the following day’s recipe.Chef Rita Sodi has been sharing recipes for some of I Sodi’s greatest hits (and fan favorites) on the restaurant’s Instagram feed. Similarly, Chef Jody Williams has been sharing recipes from the Buvette cookbook on Buvette’s Instagram feed.
Virtual Cheers
Download the virtual background of your favorite spot, donate a round to their staff funding link and have virtual cheers with your friends.A series of IGTV videos produced by the team and posted on the restaurant’s social media account. Topics of discussion include w~b at home, mindful moments, radio hour, zero~waste living, book club + more.
Cookbooks
Over the last few weeks, there have been some great cookbooks that have launched including Restaurant Workers’ Community Fund, ROAR NY, and Great Jones. This includes recipes from chefs around the US.
Disclaimer: The consolidated resources are here for your consideration. The information provided above is not legal advice. We recommend talking to your lawyer to ensure all state + federal compliance is maintained. If you do not have legal representation, we would be happy to connect you with legal counsel. We understand that circumstances are changing quickly and we are updating content as it is available.
