Being a multi-hyphenate business is a great way to keep up with changing industries and markets. But, what does that mean and how do you succeed?
The fusion of food and other industries is a concept as old as time. Food is paired with sporting events, special events (there’s a reason the chicken or beef option at weddings is a big deal) and even fashion choices (that t-shirt from that sandwich shop counts). In fact, food and fashion are so intertwined that the House of Dior even published a cookbook in 1972.
But today, customers have the ability to blend their favourite restaurants with other aspects of their lives like never before. They can go to the coffee shop on the corner and get a cappuccino and their bike fixed. They can go to their favourite burrito bar and take home a premade meal kit and add their own twist. And that brewery they pass by every day just so happens to make a sweatshirt they just have to have.
Brother Moto, a motorcycle-repair-space coffee shop and lifestyle brand, for example, can appeal to customers interested in coffee, a motorcycle repair space, or any of their retail items. This is an inherently organic way to reach more customers and expand your marketing efforts. One day they can market discounts on motorcycle repair space. The next day could be a deal on a t-shirt. They can even capitalise on the opportunity to market special deals and discounts on all three offerings, creating an easy way for customers that love one offering to convert to the other(s)
All of these newer ways of operating a restaurant have become commonplace and they’re called multi-hyphenate businesses – businesses that diversify their revenue by adding non-core offerings, subscriptions or other services to their store or restaurant. If diversifying revenue wasn’t a good enough reason, this business model also makes a tangible impact on customers’ purchasing decisions.
What’s the benefit of a multi-hyphenate business?
Make your marketing efforts work twice as hard
Marketing is one of the biggest benefits of operating a multi-hyphenate business. A sweatshirt or tote bag with your brand or logo on it functions as a walking billboard for your restaurant. Even if someone isn’t interested in your menu but finds your retail items appealing enough, you can still benefit from a sale. The best part is that your items can reach places and people your existing marketing strategies may not. So, even if they come for the hat, you have a unique opportunity to make them stay for the food.
Similarly, a business that operates as a coffee shop but also supplies a service, such as tattoos, can market itself in two ways and potentially reach two different audiences and hopefully convert customers to the other aspects of their business.
Bring in multiple streams of revenue from one place
The best part about operating a multi-hyphenate business is that more offerings create more opportunities for sales which creates more revenue. In the early days of Brother Moto, co-founder Jared Erickson emphasised that other offerings helped them build a foundation. ‘We wanted to build brand awareness, so we sold t-shirts and focused on putting money right back into the business’, says Erickson. This is crucial because in the event the additional offerings exceed the revenue produced by the core offerings, it can help provide a way to fund your initial goal or passion until it takes off.
Conversely, for more established businesses, creating additional offerings can help set your business up for expansion. Ghost Town Brewing began selling its special brews in bottles to reach customers outside of their immediate locale and opened up a whole new market for itself.
‘There are people who are really excited about our products that have never been here, and they have that ability now to order and get it delivered right to their door’, says Ryan Nosek of Ghost Town Brewing. ‘We opened up a whole subset of sales we didn’t have before.’
Encourage loyalty by fulfilling a list of customer needs
Customers dining at a restaurant is one thing. But being able to follow that experience up by buying that same meal premade is an act that inspires loyalty. It keeps customers engaged with your brand outside of your restaurant and allows them to create their own experience which can positively impact how they view your restaurant.
Furthermore, buying a t-shirt, a cooking class or another service keeps that brand top of mind. Whenever they wear that item, use that cooking tip or look at that tattoo, it reminds them of your business and can encourage them to return on a day or at a time they hadn’t initially planned.
In times of economic uncertainty or challenges, it can also help customers continue to support your business. Premade meal kits and other similar options proved instrumental in helping many businesses survive COVID-19 when dine-in experiences weren’t feasible. Smaller moves like prepackaged jams or sauces can help customers support your business even if they can’t afford a full dine-in spread but still want a sliver of that taste that only you can provide.
How to launch a multi-hyphenate business
Engage with customers and analyse data
Talk to customers and understand what they’d like to see from your business. Square Feedback is a great way to get started and open up the lines of communication. Be sure to also explore the indirect communication you already have with customers: customer data. Analysing shopping trends can help you understand clear opportunities and how to maximise them. If a taco dish is the most popular item on your menu, create a premade meal kit around the dish so that customers can enjoy that dish on a more leisurely basis.
Find ways to build on your brand
Think about what you want your brand to be known for and find a way to expand on this idea. For Brother Moto, they were focused on creating an environment that was welcoming and inclusive for people passionate about coffee, bikes or both. If the mission of your restaurant is to give diners a sliver of France, drum up other ways you can give them that. A cooking class, for example, could be a great way to show customers how to cook French style and make their own great-tasting dishes right from the comfort of their kitchen.
If there’s a business you really admire that already operates as multi-hyphenate, analyse the overall landscape and think of ways you can put your own unique twist on what’s being done today and stand apart from competitors.
Invest in tools that can easily support diversified offerings
Having tools and hardware that can easily support a restaurant, retail store and other service options is important to balancing multiple businesses. Square has an ecosystem of solutions that can make going between two or more offerings or between offerings and services quick and easy. Square Online, for instance, can make it easy to sync all sides of your business through seamless integration with any Square POS system. Other tools like inventory management can help keep you on track and balance what you have available to ensure you deliver a painless customer experience.
If you’re leaning more toward offering a service instead of an item, Square Appointments can help you manage booking, payments and more for free.
Be flexible
The crux of operating a multi-hyphenate store is being open to trying new things. Don’t be afraid to explore new ways of building on customer interest. If one offering isn’t working in exactly the way that you planned, consider trying another. But as always, weigh the risk and the health of your business and proceed carefully. It may take some experimentation before you land on the additional offering that works best for your business.
Tips for success
Offer discounts to encourage customers to explore your additional offerings
Discounts can help customers ease into your new offerings for a fraction of the price. Bundling discounts with favourite or core offerings can help sweeten the deal and make a sale more likely.
Reward loyal customers
Rewarding loyal customers with a taste of your additional offerings (especially when the offerings are brand new) can help increase adoption. Loyalty programmes that give customers a free t-shirt or a discounted service after so many visits can introduce customers to things they didn’t even know they wanted or needed. The best case scenario is customers are so impressed with the quality or fit of the t-shirt and decide to buy another one. The same can be true for the service or other offerings.
Market new offerings effectively
Customers can’t buy what they don’t know exists. Use Square Marketing to let customers know about a new retail line or premade meal kits. Reach customers where they are when they need you the most. When customers pay with a payment link or QR code, follow up the transaction with the opportunity to take a premade dish home or bundle up with your sweatshirt as they leave.