Today we’re going to be diving into the top five most profitable food and beverage businesses in 2019. Just to give you a little bit more context, I interviewed more than a hundred food and beverage restaurant owners and created the survey. That’s the reason why I was able to gain a lot of insight into which types of business are actually making money and what is not making money. This report is a lot of work, and it gave us a lot of insight into how people invest and the type of service we’re going to be offering. Today I’m going to be sharing with you the top five most profitable businesses, so make sure you guys stay until the end. I’m going to be sharing with you guys. We talked about the few things to look out for when creating a restaurant and when you’re opening up a restaurant and, within this article, we talked about the margins that typical food and beverage owners make, and that ranges from 5% to 10%. That is very, very slim margins. Today, these five businesses that I’m going to be talking to you about, the five industries, all range from 20% to 35% margins. We’re talking about 20% to 35% margins take-home, so make sure you guys stay until the end. This is something I’ve never done before. I don’t even know if I’m going to get in trouble by doing this, so if you’re watching this article, good for you. If this article is down that means I’m getting sued, okay? Before we dive right in, I’m going to be talking about the structure of how I’m presenting it. I’m going to be talking to you about the pros and the cons and basically why this is such a profitable idea. You would want to really pay attention to this because before we dive into creating and actually committing into your next five years of business, you probably would want to know what is the most profitable. You probably want to know which business idea to get into so then that way, after five years, you’re not better off not starting at all. So many businesses are like that, but today these five businesses are the kings and the queens of 2019. Are you guys ready? All right, let’s dive right in.
The number one most profitable food and beverage business to be in 2019 is a bubble tea shop, and the reason why it’s the most profitable is that the cost of goods sold is relatively low. It ranges from 10% to 15%. It is super easy to make, and on top of that, the quality control is always there. You just follow the formula. You have all the powders, you have all the syrup and you’re good to go. Training people is super easy because of the fact that quality control is so easy to make as well. Some of the pros of operating a bubble tea shop are that it has high demand. Nowadays, everyone is drinking bubble tea, and if you do not know what bubble tea is you definitely are missing out. The second thing is the high turnover rate, and what that means is that you don’t need a really big space in order for you to do a lot of volumes. People grab their bubble tea and they go. A lot of people order takeout, and that is the reason why it is such an attractive business model. On top of that, it doesn’t require a lot of investment. All the equipment that it requires is actually very, very affordable. The fourth thing is that the quality control, everything is processed in terms of it has a process. It doesn’t require a very high skill to be able to make the product good because it’s all in the formula. It’s all in the syrup, it’s all in the powder. That’s what makes this product and this business model so attractive. For us, we actually started selling bubble tea as well at 720 Sweets two years ago because we saw how profitable it is, and how much of a demand it has. Now, the con of running this business is that the average ticket price for this product is relatively low, so what that means is that you need a lot of volume in order for you to be super profitable. The second con is that it is highly, highly competitive. I’m not sure about you if in Vancouver we have more bubble tea shops than 7-Eleven’s, and in any convenience stores, going down a block you’re going to see at least five of them. It is because it is such a profitable business idea out there. Just to share some behind-the-scenes stories with you is that I actually have a lot of friends who are in this field and that are in this business, and just to let you know about the volume that they’re actually doing is that a lot of them actually clear seven figures selling bubble tea. We’re talking about peak times, more than $200,000 per month. That is a crazy amount of volume and a crazy amount of demand, and that’s the reason why 720 Sweets is at the forefront and our franchisees love us providing this as well. I mean, if you’re not in this business in today’s age, you’re definitely missing out.
The second most profitable food and beverage business out there is an ice cream shop and, luckily enough, our 720 Sweets, our dessert chain, is in the forefront of this as well, and this is the reason why we’ve expanded so rapidly. Nonetheless, just to share with you some of the pros, is that the cost of goods sold, once again, is relatively low in comparison to a full-service restaurant. We’re talking about around 20% to 25% of the cost of goods sold. Now, the quality control is definitely one of the pro things because when you make these things in batches, and it comes in formulas, basically just mix A, mix B, mix C, and out comes a product, so it doesn’t require a lot of high skilled labor and talent in order for them to create the product. At the end of the day, who doesn’t like ice cream? Come on, you tell me, one person that doesn’t like ice cream, I will give you free ice cream. Everyone loves ice cream and, at the end of the day during the summertime, it is amazing that the amount is crazy during the summertime. Now, some of the cons of running an ice cream shop is the fact that the equipment is a little bit higher in cost and also the seasonality of the problem and also the low ticket cost of the ticket item, so that means you need a lot of volume in order for you to be able to able to make the big margins that I’ve been talking about. Just as an example, sharing a little bit more with you, is that the reason why 720 Sweets was able to do quite decently well is because, knowing the fact that seasonality is a problem, we introduced to bubble tea, and we introduced taiyaki as well, because we want to make sure that we uplift that average ticket cost. People don’t only come in for dessert. They can also come in for a light lunch or a light dinner. We have these taiyaki sandwiches, which is a croissant made sandwiches that people love, and that helped us increase our average ticket cost, as well, and on top of that, it also tackled the seasonality problem. If you are in any of these lines of business, and if you think that these are all the cons, these are just creative ways of how you can actually come up on top of the cons, so there you go, second most profitable food and beverage business idea in 2019.
The third most profitable food and beverage business idea in 2019 is having a ramen joint. Ramen joint is amazing when it comes to profitability because the cost of goods sold is only 15% to 20% and, on top of that, the pro is that people love ramen. Tell me one person that doesn’t love ramen. Everyone loves ramen, okay, and on top of that the average ticket cost is definitely a lot higher when it comes to per-person spending, so that is a really high must, and on top of that it requires medium skilled labor. It doesn’t require a full-on chef to create this product but, nonetheless, a lot of the things actually are present. You actually follow a formula in order for you to create the product, which is the reason why it is such an attractive model when it comes down to it. On top of that, super, super high turnover. Haven’t you been to a ramen shop where they’re like, if your whole party is not here, you cannot go in, you cannot eat? I’ve definitely been to a lot of these ramen shops. It’s part of the culture because they want you to grab and go, grab and go, so they can have that turnover. I have a friend who is in the ramen joint business. His place is only a thousand square feet and he makes more than $2 million dollars in revenue. It is mind-blowing. It is crazy how much volume that they do because of how much high turnover, just completely crazy. Now, on the flip side, the investment is definitely a lot higher when it comes down to it. They have a lot more competition as well.
The fourth type of super-profitable food and beverage ideas in 2019 is having a pasta joint. Pasta place is super profitable as well. I’ve interviewed more than hundreds of food and beverage owners. Pasta is always on the top in terms of profitability because of how a staple this item is. Just like ramen, people love pasta, and the cost of goods sold is incredibly low because they’re just mixing flour and water. It’s just crazy. Typically speaking, we are talking about around 15% to 20% cost of goods sold, high demand, the average ticket cost is definitely a lot higher than bubble tea and also ice cream as well, so this is something that is definitely a pro. Now, the con side is that the investment to open a pasta joint is definitely a lot higher when it comes down to it, because you need to have a full-on kitchen and, on top of that, you need to have higher skilled labor to open up a pasta place.
The final, fifth, most profitable business idea in 2019 is having a pizza shop. You know, this has always been something that is super profitable because you’re basically mixing dough and water as well. You’re talking about maybe 10% to 15% in the cost of goods sold. Now, depending on what type of pizza joint you serve, some people might have arugula and have different types of really upscale meat so, for those joints, their cost of goods sold is definitely higher, but for a lot of your neighborhood pizza places, their margins are insane. Grab and go, high turnover. Who doesn’t like pizza? Come on. Everything that I mentioned, people love, which is the reason why it makes them have so much demand and high margins, okay? So when it comes to pizza, the skill required to make pizza is definitely a lot lower than a full-on restaurant as well. On the con side, the investment for having a pizza shop is definitely a lot higher as well. So there you go. The top five most profitable food and beverage businesses in 2019. I know I’ve focused a lot on the cost of goods sold but because of the fact that when it comes to running a food and beverage business, the margins are really determined by the cost of goods sold, by your labor, and by your rent. So if you can control any of these to a minimum, that’s where upside comes from, which is the reason why these five different business ideas are so incredibly profitable in 2019.