The surest way to make money as a restaurant operator is to buy something for X dollars and sell it for at least 3X. That ratio is going to fluctuate, of course — no one’s paying for the salt, while the sky’s the limit for a dram of 15-year single-malt. But the age-old maxim to buy low and sell high will drive most of the revenue side of your business.
To boost your profitability, then, you effectively have three options. You can reduce your costs (e.g., by lowering your rent, handling food more efficiently, or better-scheduling your staff). You can charge more for the things you already do (though at the risk of discouraging future and existing customers). Or you can explore more ways to turn a buck using the space, the people, and the services you already have at hand.
The internet — a.k.a. everyone’s greatest frenemy — makes many of these avenues possible, as you’ll see. You’ll also notice that most, though by no means all, of these suggestions will require some sort of upfront investment in some form of restaurant technology. Most, though, should allow you to stick with what you know, to use your existing marketing channels, to deepen your expertise rather than widen it, and generally to lean into your strengths. Our goal here is to help you get paid for doing what you already do best, whatever that might be. So let's get into it.
New revenue streams for your food service
The simplest way to make more money from your menu is to raise your prices. Try to keep that bump under about 10%, though, if you want to keep roughly the same number of customers. Anything beyond that and you risk turning off your customers and thus cutting into any gains you’re otherwise making. You can also slim down your menu to make your whole operation more efficient. That’s not a source of revenue per se, but it may help you reframe what you do.
More to the point of this discussion, make sure you’re getting as many people to buy your food as possible. Even before the pandemic, delivery apps were redefining what it meant for many Americans to get a restaurant meal. Then, boom, lockdowns and consumer caution changed the game forever. A September 2021 McKinsey report found that food delivery went from steady 8% annual growth in recent years to quadrupling between 2017 and 2021. That growth won’t hold, obviously, but as your customers become ever more accustomed to dialing up meals via apps, you’ll notice some promising avenues for extra revenue.
The most obvious, of course, is to get on the delivery apps, if you’re not already, or to run your own delivery service. Lesser appreciated but also on the rise: set up shop in a ghost kitchen to widen your delivery radius, or lease your kitchen to someone who wants to do just that in the hours when you’re not using it. Partner with a baker who turns out pastries from your kitchen during the graveyard hours of 3am to 8am, for instance.
Think, too, about different ways you can offer and distribute foods you’re already making. If you have room for retail, include some of your own creations among the offerings. Prep sandwiches or salads or other fast-grab lunch items in a cold display case, for the hurried workers and lazy picnickers of the world. You can also distribute sandwiches, pastries, or other easy-to-transport foods to coffee shops, gas stations, smaller grocery stores, or other locations in your neighborhood that sell food but that don’t maintain kitchens. If you run this hustle, be sure to brand your deli paper! If someone is buying your muffuletta at the corner java stand, they should know the source.
Last, if you’ve got leftover grub at the end of the day, don’t just toss it. Link up with the app Too Good to Go, ostensibly a waste-prevention platform whose dedicated users will pay $4 or $5 to pick up a bag of surprise food from restaurants, grocery stores, coffee shops, bars, and wherever else would rather make a few bucks (and generate some customer loyalty) than put perfectly good food in the trash.
New sources of revenue from your drink service
Of the few positive trends that emerged from the pandemic, we must count among them the rise and reign of the to-go cocktail. More than 30 states stepped up during the brutal, locked-down depths of 2020 to allow bars and restaurants to sell cocktails, a financial lifeline that saved an untold number of establishments. If you’re still perfecting your to-go cocktail program, or deciding whether to try one, check out our guide on how to design and package to-go drinks for maximum portability and quality.
As the pendulum swung, plenty of other people determined they were going to drink less, which, fair enough. The cohort of Americans who don’t drink alcohol is now up to some 40% — oodles of customers who scan past your wine, beer, and liquors. Do these people have fewer dollars in their pockets? Not likely. Do they not enjoy delicious things? Also, unlikely. So consider rolling out some high-quality zero-proof drinks for them and for anyone who’d like a break from ethanol. Stocking NA beer and investing in memorable herbal drinks can bring in cocktail-level spends from customers who appreciate a so-called sober buzz.
Ways to earn money on restaurant special events
We’re in a mini-golden age of restaurant events — they all feel more special than usual. Anecdotally, people are replying to more RSVPs and actually sticking to them. Events can be whatever you put your mind to, truly. Host the afterparty for a kickball league. Project “RuPaul's Drag Race” on the wall. Subsidize a weekly trivia night with a bar tab and free swag. Hold boozy figure drawing classes. Let podcast hosts hold a live taping in your back room. Whatever you and your neighborhood are into, lean all the way in. If you’re starting from scratch, start by asking your staffers what they’re into, who they know, what they would like to see in your space. Your staff might be harboring some secret talents, but at the very least, their buy-in will help the visibility and success of whatever you choose. And even if you don’t see an instant return, stick with it. These nights are effectively a showcase for your restaurant or bar to a new group of people who’d never visited before. Make your best impression, and they in turn might make you a habit.
Some folks have a higher tolerance for Zoom than others; some have excellent reasons for not leaving the house on a given night. Fair enough, then. Meet them where they are. You can host events specially for the streaming crowd — online cooking classes, in particular, have become a thing. Or you can charge for the privilege of tuning into an event you’re already going to be holding. Use a platform such as Viewcy to charge for online tickets or to pass the hat for donations when you stream a live performance.
A less-groundbreaking standby that you shouldn’t overlook: private events of all kinds. That might mean birthdays, anniversaries, graduation parties, retirement banquets, whatever is up. If you institute a private dining program, you’ll wind up with events that don’t even have a name — just family in town, friends missing one another, folks who like to have conversations without competing with an entire dining room.
Likewise, if you’re looking at catering, consider the events that might not even sound like events. Yes, obviously, lock in the contract for that wedding reception if your BBQ smoker can handle ribs and brisket for 75 tipsy people. But poke around and you might find that catered corporate lunches and other treats for white-collar workers are becoming more popular as companies try to entice workers back into offices. Particularly if your establishment is missing a portion of its traditional lunch crowd as folks choose to work from home, this can be a great pitch to bring to nearby businesses. It's wild what people will do for free food — even put on a belt and drive to an office park.
If you can’t beat the OOO crowd, join ‘em. Roll out the carpet for the peripatetic laptop jockeys in your city with coffee, meal, and drink offers aimed at folks who’d rather post up at your two-top during the slow part of your afternoon than stare at their walls. In several major cities an outfit called Workchew charges a monthly fee to nomadic workers who then set up for co-working in restaurant and hotel spaces. Lure them in with coffee refills, then entice to stick around for your happy hour tapas menu.
Revenue streams that involve merchandise and retail sales
Anyone who’s anyone slings merch these days. Dive bars hawk hoodies. Craft breweries stamp out pint glasses. Stickers are cheap, trucker hats are perpetually making a comeback, and for some reason people always think they need another koozie. If you’re considering mugs or T-shirts or baby onesies or whatnot, start by chatting with your regulars to suss out the graphic designers and illustrators who can imbue this loot with the feel of your establishment. Your customers are more likely to connect with the designs, and will be more likely to pay premium prices knowing one of their own was responsible for the work.
Two more pandemic-era trends that seem to have staying power might also appeal to your more dedicated fans. One is restaurant meal kits, which deserve more respect in an age of profuse delivery. The perpetual problem with delivery and carry-out are the sheer physical limits on how long food stays hot and delicious while it commutes, sweating out condensation into a clamshell or leaking sauce through a piece of aluminum foil. Kits solve this by giving almost-ready-to-eat meals to people who presumably own an oven that goes up to 350 degrees or a range that boils water. Their dinner will taste better, your gas bill will know the difference, and you don’t have to wash plates afterward. Offer discounts for repeat customers and folks who tag your restaurant when they upload Instagram or TikTok videos of them cooking your kits at home.
The second innovation of the carry-out craze is the rise of retail wine clubs, which leverage your existing knowledge of wines (and access to unusual bottles) to offer a monthly selection of the goods. They can pair with your food, with a holiday, with a theme, or with your sommelier’s sense of opportunism — when you get the goods, showcase them for your appreciative customers. Whatever you do, leverage your expertise and add value. Then, charge for it. You’ve worked hard, and your bottom line should reflect that fact.
[Photo by Hybrid Storytellers on Unsplash]
