Hey guys. Today, we will be diving into the top five most profitable food and beverage businesses with low investment in 2021. I interviewed more than a hundred food and beverage restaurant owners and created the survey to give you a little more context.
That’s the reason why I was able to gain a lot of insight into which types of businesses are actually making money and what is not making money. This report about the most profitable food and beverage businesses with low investment is a lot of work. It gave us a lot of insight into how people invest and the type of service.
Today I’m going to be sharing with you the topmost profitable food and beverage businesses with low investment, 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.
We talked about typical food and beverage owners’ margins, ranging from 5% to 10%. That is very, very slim margins. Today, these five businesses that I will be talking to you about, the five industries, all range from 20% to 35% margins.
Food And Beverage Businesses With Low investment in- 2021
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. If this article is down, that means I’m getting sued, okay? Before we dive right in, I will be talking about the structure of how I’m presenting it.
You would want to pay attention to this because before we dive into creating and committing to your next five years of business, you probably want to know the most profitable. You probably want to know which business idea to get into, so that way, you’re not better off not starting at all after five years.
Bubble Tea Shop – Most Profitable Food And Beverage Businesses
So many businesses are like that, but today these five businesses are the kings and the queens of 2021. Are you guys ready? All right, let’s dive right in. The number one most profitable food and beverage business with low investment to be in 2021 is a bubble tea shop, and the reason it’s the most beneficial is that the cost of goods sold is relatively low.
It ranges from 10% to 15%. It is super easy to make, and the quality control is always there on top of that. You 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 quality control is so easy to make as well.
That is a crazy amount of volume and a crazy amount of demand, and that’s the reason why 720 Sweets is in 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 missing out.
One of the pros of operating a bubble tea shop is that it has a high demand. Everyone is drinking bubble tea, and if you do not know what bubble tea is, you definitely miss out.
- The second thing is the high turnover rate, and what that means is that you don’t need a massive space 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 very, very affordable.
- The fourth thing is that quality control. Everything is processed in terms of it has a process.
- It doesn’t require very high skill 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.
- We started selling bubble tea at 720 Sweets two years ago because we saw how profitable and demanding it was.
Now, the cons
- 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 volumes 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.
To share some behind-the-scenes stories with you is that I actually have many friends in this field and are in this business, and just to let you know about the volume that they’re doing, a lot of them clear seven figures selling bubble tea. We’re talking about peak times, more than $200,000 per month.
Ice Cream Shop – Food And Beverage Businesses With Low investment
The second most profitable food and beverage business With Low investment out there is an ice cream shop and, luckily enough, our 720 Sweets, our dessert chain, is at the forefront of this as well, and this is the reason why we’ve expanded so rapidly. Nonetheless, to share with you some of the pros, the cost of goods sold, once again, is relatively low compared to a full-service restaurant.
We’re talking about around 20% to 25% of the cost of goods sold. Quality control is one of the pro things because when you make these things in batches. It comes in formulas, basically mix A, mix B, mix C, and out comes a product, so it doesn’t require a lot of high skilled labour and talent for them to create the effect.
Who doesn’t like ice cream? Come on, and you tell me that I will give you free ice cream for one person who doesn’t like ice cream. Everyone loves ice cream and, at the end of the day during the summertime, it is notable that the amount is crazy during the summertime.
Now, some of the cons of running an ice cream shop are 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 volumes 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 more with you is that the reason 720 Sweets was able to do quite decently well is that, knowing that seasonality is a problem, we introduced bubble tea. 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, croissant-made sandwiches that people love, which helped us increase our average ticket cost. 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 coming up on top of the cons, so there you go, second most profitable food and beverage business idea in 2021.
Ramen joint – most profitable food and beverage business idea in 2021
The third most profitable food and beverage business idea in 2021 has a ramen joint. Ramen joint is impressive 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 a lot higher when it comes to per-person spending, so that is a high must, and it requires medium-skilled labour.
It doesn’t require a full-on chef to create this product, but many things are preset. You follow a formula for you to make the product, so 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 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 that they can have that turnover.
I have a friend who is in the joint ramen 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 they do because of high turnover, just downright crazy. Now, on the flip side, the investment is a lot higher when it comes down to it.
Pasta joint – Profitable food and beverage businesses in 2021
The fourth type of super-profitable, most profitable food and beverage business in 2021 is having a pasta joint. Pasta place is super good 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.
Like ramen, people love pasta, and the cost of goods sold is meagre because they’re just mixing flour and water. It’s just crazy. Typically speaking, we are talking about around 15% to 20% of goods sold, high demand, the average ticket cost is a lot higher than bubble tea and ice cream, so this is a pro.
Now, the con side is that the investment to open a pasta joint is 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 labour to open up a pasta place.
Pizza shop – Profitable food and beverage businesses 2021
The final, fifth, most profitable business idea in 2021 has a pizza shop. You know, this has always been super profitable because you’re 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. Still, for a lot of your neighbourhood pizza places, their margins are insane.
Grab and go, high turnover. Who doesn’t like pizza? Come on. Everything that I mentioned, people love, is 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 a lot lower than a full-on restaurant. On the con side, the investment for having a pizza shop is a lot higher. So there you go.
The top five most profitable food and beverage businesses in 2021. I know I’ve focused a lot on the cost of goods sold, but when it comes to running a food and beverage business, the margins are really determined by the cost of goods sold, your labour, and your rent.
So if you can control any of these to a minimum, that’s where the upside comes from, which is the reason why these five different business ideas are so incredibly profitable in 2021. If you guys are looking for more resources and insight into how the food and beverage industry is doing across the platform and the board, definitely download the link below. The report that we have done and the survey that we have done are doing for you guys.
Hopefully, it helps you gain a little more insight when considering the types of food and beverage that you want to be in. In the comments section below, leave what you think about this article or any other industries that you know are super profitable. Thank You.