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Last Update: Tuesday December 10, 2019

Key Idea: Develop Multiple Revenue Streams

Marc Katz started his business with a focus on food that's evolved into a series of complementary operations that define the total Katz's experience for customers.

Key Question:

A: 

Customers who come to Katz Deli can get more than corned beef.

Q: Why does Marc say that Katz Deli is like a kosher marina?

A:
Because he has developed a destination that offers customers anything they need to have a good time. He thinks of Katz as an island or a closed environment. He doesn't want customers to just run in to pick up a take out; he wants them to sit down and stay for hours.

Also, Marc owns real estate surrounding the original building which he rents out to commercial tenants who do not need much parking. This creates rental revenue and more parking spaces for Katz Deli customers.

Since so much effort is spent on getting the customer to come through the door, Marc has increased revenues by adding a nightclub, a bar, and a fine-dining menu upstairs.

This strategy is called horizontal integration. It is providing new goods or services, outside of the core business, to an existing market of the business. Vertical integration, another effective way of expanding the revenue base and bottom line profits of a business, occurs when a company ventures into a new part of the supply chain that the business is already part of. For example, a manufacturer with an established product and distributor network might decide to open some retail locations and sell directly to the end consumer.

Think about it

Are there opportunities for integration, horizontal or vertical, in your business?

Clip from: Katz's Deli & Bar

Austin, Texas: A New York deli in Texas... now that's a concept! Meet the man who believes corned beef is a food group of its own and whose mission has brought more than great eating to the music scene on 6th Street at Rio Grande.
 
Known around town as the unofficial Mayor of Austin, fifth generation kosher butcher Marc Katz, brought his family recipes from New York City and says his deli in Austin serves the best sandwich west of the Hudson River.  Marc tells us that he copies the best practices of the companies he admires and this led him to the insight, "You only get to keep what you give away."
 
Learn how this one-man-marketing band rings up millions in revenues from one location that brims with excitement. He has declared  "...fat is back" and added a milkshake to his menu that he calls "a heart attack in a glass." He warns, "You should not operate a vehicle under the influence of this milkshake."

Katz's Deli & Bar

Marc Katz, CEO & founder

Katz's Never Kloses, But Did
Once located at 618 West 6th St. at Rio Grande
Austin, TX 78701

Office:

Business Classification:
Restaurant

Year Founded:

Develop Multiple Revenue Streams

HATTIE: You're in the entertainment business. In your mind, do you see these various offers as unique revenue streams?

MARC: They're all together. It's like they're all interdependent. What we have here is a kosher-style marina, where each little segment--if you're in a marina to me it's easier to depict; it's more simple.

You have the boats but you're selling the worms, you rent the space, you're selling the gasoline. You have all the things that go around, that evolve around it. We do the entire package here . . . from start to finish.. And each one of our little companies exists because, yes, they're income streams, but they're...

HATTIE: Each one helps the other one.

MARC: They can afford not to make money. Each one can afford not to because they generate enough money for the other one. People come to Top of the Marc...

HATTIE: To hear the music.

MARC: And while they're at Top of the Marc they just might have dinner with me.

HATTIE: They might have a glass of beer.
 
 

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