Subsequent Income Streams for Restaurants Post-COVID
Posted on: May 12, 2021 by RMS Hospitality
The restaurant industry is a service industry. Restaurant owners and their employees don’t make money when they can’t provide their services. The pandemic tested the mettle of even the most successful and well-loved establishments, and many of them didn’t pull through. In 2020, more than 110,000 restaurants and bars shut their doors during the pandemic, and many of those will never re-open.
A restaurant insurance program can help alleviate the losses that occur during a temporary shutdown. Still, for long-term challenges like the one the industry saw this past year, success depends on the restaurant’s ability to diversify to meet the situation it is faced with. COVID offered a glimpse of what it takes for an establishment to become resilient, able to adapt to changing circumstances. Going forward, the industry as a whole can learn from the ones who blazed a trail and came through the pandemic alive and, sometimes, better off than they were before.
How Restaurants Can Diversify Income Streams
Most restaurants have a single form of service that provides nearly all of the revenues for the business. If something happens to interrupt that stream of revenue, the establishment has nothing to fall back on. The key to weathering unexpected challenges is to diversify the business.
When a restaurant has multiple revenue streams, they are no longer reliant on a single service for almost all of their income. The restaurants that came through COVID got creative. Your clients may want to consider employing the same restaurant strategies post-COVID that these businesses used to get through the pandemic, including:
- Offer meal kits: For many people, cooking at home is a pleasure, but shopping isn’t. Meal kits are a great way to provide a service for customers who want a home-cooked meal without having to run out to the store.
- Turn part of the restaurant into a market: Restaurant owners can take a portion of the restaurant and convert it to a full-time market or open the market during certain times when business is slow. This service works great when the business can provide local, gourmet, or novelty food goods.
- Create novelty food and beverage items: If the restaurant can develop and then sell food or beverage items of their own creation (salsas, dressings, beer, wine, etc.), they can distribute those goods to other sellers and offer them in-house.
If a business pulls in revenue from multiple streams, when one goes down, the others are there to fill in the gaps or at least keep the business afloat.
Why Restaurants Need a Restaurant Insurance Program
Liability insurance is necessary for any business, but restaurant owners benefit from a restaurant insurance program that caters to their specific needs. Slip-and-falls, alcohol-related complaints, and food-borne illnesses are just some of the risks the restaurant industry faces. The right policy can help mitigate these risks, giving business owners peace of mind to focus on running their restaurant.
About RMS Hospitality Group
At RMS Hospitality Group, our expertly crafted policies are written specifically for the hospitality industry. We offer custom tailored solutions to meet any venue’s specific needs. For more information, contact our knowledgeable experts today at (888) 359-8390.
Posted in: Restaurant Insurance