Small businesses are embracing the strategy of diversifying their revenue streams to stay competitive in today’s uncertain economic climate. This trend of combining various income sources under one roof, known as multi-hyphenate businesses, is on the rise. Wineries are merging with tasting rooms, bookshops are adding cozy cafes, and beauty salons are expanding into retail. This adaptation to changing economic conditions is setting a precedent for future resilience.
Square, the popular payment processor, analyzed millions of transactions across sectors like food, retail, and beauty and found that subscriptions are becoming increasingly significant. Many businesses are offering subscription services to engage their customers consistently. Restaurants are bottling their signature sauces, wine shops are shipping quarterly selections, and beauty salons are offering monthly service subscriptions.
The adoption of subscription models has increased significantly in recent years. Square’s data shows that 74% more sellers have embraced subscriptions compared to the previous year, and revenue from subscriptions has surged by 136%. By the second quarter of 2023, businesses leveraging subscriptions witnessed a 22% contribution to their overall revenue.
Small business owner Ashleigh Ratchford, who owns Ashleigh Bakes Daily in Durham, NC, shared her success story of introducing a monthly subscription box. She highlighted how it not only increased sales but also boosted customer satisfaction. The data also indicates that over half of subscribers maintain their subscriptions for more than six months, suggesting a strong consumer preference for this business approach.
Retailers are also enhancing their in-store experiences to attract customers. The integration of Square’s restaurant software among retailers for food and beverage services has increased by 68% year over year. Additionally, retailers are organizing events and workshops to give customers more reasons to visit. The number of retailers using Square Appointments, a booking system, saw a 16% year-over-year increase by the end of 2022, enabling customers to book unique experiences.
In the beauty and personal care sector, there has been a surge in branded merchandise offerings. Between Q2 2019 and Q2 2023, 84% more sellers started selling branded merchandise. For example, The Beer Spa in Denver launched its own product line to provide customers with a unique in-house experience.
The restaurant industry is also diversifying its services. In addition to traditional dine-in and takeout, there has been a 10% increase in restaurants offering catering services. Many restaurants are also offering cooking classes, workshops, and events to attract and engage customers.
To support small businesses in their diversification efforts, Square has partnered with Printful. This collaboration allows Square users to launch merchandise through Printful’s platform, expanding their business horizons further.
In this ever-evolving market, small businesses recognize the importance of adaptability. By exploring diverse revenue streams, they are protecting their enterprises against potential economic downturns and ensuring steady growth in a competitive landscape.