One of the most difficult questions when it comes to starting a food business is: what item should I be selling?
There are millions of items out there, and yet which one makes the most money?
Recently, I interviewed 100+ food and beverage restaurant owners to see which types of food businesses are actually making money and what aren’t.
It gave me a lot of insight into how people invest and the type of service that is being offered.
From the interviews and research, I was able to nail down several of the most profitable food businesses.
All right, let’s dive right in.
1.) Cookies Business
The number one most profitable item are cookies.
Why cookies? Because everyone needs something sweet, something of a comfort indulgence at their own home, something like a snack something like a gift and cookies is the perfect item that satisfies everything.
Now when I’m talking about cookies, we’re not talking about regular cookies that you can just bake at home, we’re talking about specialty cookies, we’re talking about vegan cookies, we’re talking about really indulgent, flavor packed ingredient packed cookies that are a little bit more different.
Pros of a running a cookie business:
Now the pros of starting a cookie business is not everyone loves cookies, my daughter loves cookies, I love cookies, my dad loves cookies.
So that means that you are capturing a much wider audience.
And on top of that, you can actually gift it out to your friends and family showing and sharing your love at the same time.
Now when it comes to the startup costs of a cookie business, it is a lot lower than opening up a traditional restaurant or any type of food business because all you need to do is have an oven, and you’re pretty much good to go.
Typically, it can start with less than 10,000. And on top of that, if you really wanted to bootstrap this business, you can even start this at your own home.
And the real reason why I really love cookies is that they have high margins. And typically speaking, we’re looking at times five, two times six, your cost of goods sold. And on top of that, it’s just so much easier when you batch make a ton of different cookies for you to save on labor costs.
Now when it comes to the skill level to create cookies, it definitely varies. I mean, the barrier to entry and to create these items are definitely low to master. This skill set takes a lot of years. But it is something that you can get started and hone your craft in as time goes on.
Cons of running a cookie business
Now when it comes to the cons of creating a cookie business, everyone knows mom’s recipe, everyone has a recipe that they think they can make really good cookies.
And that’s the reason why for you to stand out for you to charge people for cookies, you must stand out. So as an example, you can stand out with making really, really good vegan cookies, or you can make some really good gooey cookies at the same time.
Another big pitfall of running a cookie business is the low average ticket price. What do I mean by that?
Let’s say if you want to make $1,000 in your business, how many individual cookies do you need to sell in order for you to get there, a lot of cookies. Whereas if you build your business correctly, let’s say if you bundle your cookies in packages of six, you package it nicely slap your logo on it have good branding, have a good marketing presence, then you can sell this at a premium that would get you to $1,000 much quicker if you do it right.
Now lastly creating a cookie business is not a walk in the park. It is relatively labor-intensive. It is a grind you need to wake up early and on top of that if you’re doing this at home and if you have high volume that means that you can only both bake so many cookies at once.
That means your oven is turning 24 seven until you are able to afford a bigger oven. A bigger mixer. This will become a grind for you.
2.) Fried Chicken
The next most profitable item is fried chicken fried chicken stores are popping up left right now tomorrow in Vancouver every single week and they are the most popular in 2021 because once again, this is a really great comfort food.
Every type of culture has its own version of fried chicken. For example, Japanese has their own fried chicken which is called karate and it is using potato batter whereas American fried chicken is very very different because they use beard battered so fried chicken is a universal language amongst all cultures.
And that’s the reason why it is not only the most demanding but also profitable item in 2021.
Pros of running a fried chicken business
The pros of running a chicken joint is that everyone loves fried chicken.
It goes across multi-cultured and on top of that it is highly repeatable.
What does that mean?
That means that I can eat fried chicken Monday, Wednesday, Friday, and I’m still not tired of fried chicken.
Now in comparison to a full-scale restaurant or a high-end spot, fried chicken joints are relatively lower in startup costs.
Why is that the case?
Because you don’t need that much equipment to start a fried chicken joint.
And on top of that, you don’t need a lot of space either. When people buy fried chicken, they usually buy it to eat at home. They want to be able to share this with their friends at home during game nights or late nights cravings addition to that, once you have your batter and your recipe fine-tuned, the skill set to create fried chicken is really little to none.
So it is easy for you to hire someone to actually make the fried chicken. And that’s the reason why you also don’t need to spend a lot of money hiring for very specialized chefs to create this item for you.
Cons of running a fried chicken business
Now the cons of running a fried chicken join is that it is very very competitive.
Because once again, everyone loves fried chicken. And that’s why a lot of people are in this space.
So what can you do to stand out? You must differentiate yourself from your competitors.
Now what I mean by that, for example, Juke Fried Chicken, they focus on gluten-free fried chicken, that is a really great way for them to differentiate amongst the crowd because they focus on gluten fried chicken that is healthy to eat for you choose a way and choose a demographic that you’re trying to serve, and be able to meet them where they are.
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3.) Burger Business
Now the next most profitable item in 2021 burgers.
Everyone loves a good fat juicy burger. And that’s why the reason why it made it on the list now let’s dive into the pros.
Pros of a Burger Business
Now the pros of running a burger joint is that the margins can be very, very healthy if done right and when done right? When done right, the margins can go up to 80%.
What do I mean by when done right?
It means that when you’re operating a burger joint, you must differentiate yourself as well, you must have an identity that actually differentiates you from your competitors.
Whether you be really focused on big fat, juicy burgers, or healthy vegan burgers, it is very important to identify that. And on top of that, you must market it accordingly. You must translate that values that you have to your customers and let them in to why and what you’re creating. And then you can package your burgers to sell them at a higher cost and thus achieving higher margins.
In addition to that this item allows you to be very versatile as well. What do I mean by that?
Aside from the vegan burger, aside from a regular American burger, there are bunless burgers, there are rice burgers, there are basically any kind of burgers that you can think of gourmet burgers. And these are the ways that allow you to differentiate amongst your competitors.
And when you’re thinking about, well, how can I actually serve these burgers out, there are different business models that you can have as well, either a brick and mortar location, or a food truck location, or even a cloud kitchen location as well.
Cons of a Burger Business
Now when it comes to the cons of running a burger joint, like I was saying, competition is furious because once again, this is a very profitable item. And that’s the reason why I highly recommend you to differentiate by being creative. By being able to translate and actually tell your customers, what makes you different.
A lot of restaurants that I go to have really really good items, yet they don’t know how to properly communicate the values, and how they make their items and what really makes them different to their customers, and thus losing out on a lot of sales.
Now as a final point, the startup costs of running a burger joint is definitely moderate. In comparison to a full scale restaurant, you don’t need a lot of space. However, the equipment that you need is also quite high up there. What I mean by that you need to have a hooded fan you need to have your grill, you need to deep fryer other refrigeration ice machine, and all those good stuff as well.
So definitely not as much as a full scale restaurant, but the investment is still pretty moderate.
4.) Bubble Tea Shop
Now claiming the final spot of the top five most profitable items in 2021. Bubble Tea. Boba.
This is a tapioca drink that took the world by storm. Until today it is still very, very popular.
Pros of a Bubble Tea Business
Now of course the reason why this made it on the list is because it is very very popular amongst all ages amongst all cultures. But also it is very easy to have quality control because when it comes to drinks, drinks is basically a chemical reaction.
That means as long as you have all your volume, and your equipment all down, then you’re able to create a good cup of bubble tea.
And not only is it quality, easy to control, it also has a very low startup costs. The equipment that you need for this business model is literally a POS system, shakers, sugar dispenser, cups sealer undercounter cooler, stand up cooler, ice machine, and pretty much you are good to go. And on average, typically speaking, you’re looking at less than $10,000 in equipment, and you’re good to go.
And that’s the reason why a lot of people are jumping into this business model. And on top of that bubble tea is a grabbing go type of item.
And that’s the reason why the space needed is very, very little. And because you are selling drinks, that means is water plus whatever else you have, the margins are extremely high when done well. And on top of that the high turnover rates of this item just makes us such a great model for any types of business owners out there. Now to spill some beans to you.
Some people might be asking what margins are we talking about? We’re talking about up to 80 plus percent margins. When done right.
In addition to all those good stuff. Also, the skill sets are required for you to make a good cup of bubble tea requires very low skilled labor and once again, because they’re following a formula to create these items, it is very easy to make this item that means you can easily hire a high school student to create that drink for you. You don’t need to spend a ton of money on high skilled labor.
And on top of that, this industry has definitely evolved over the years that means it’s getting more and more versatile. For example, fruity drinks, cream, foam drinks, slush drinks, or very sophisticated tea drinks are all a evolution of this business model.
Cons of a Bubble Tea Business
Now, when it comes to the cons of this business model, it is extremely, extremely competitive in this industry. And the reason why once again is because it is high margins and low startup costs. That’s the reason why everyone wants a piece of the pie.
Now with this item, you do need to make sure that the location is right because once again, this item is more prominent in the Asian communities. And that’s reason why you must be able to choose a location that really serves the customers.
And finally it is selling drinks and thus, it is low average ticket price. We’re talking about five to $7 at the most when it comes to bubble tea. And that’s the reason why you do need to sell a lot of bubble teas in order for you to be very profitable.
And that’s once again why it’s important for you to be at the right location. Now if you want to learn more about how to create a bubble tea shop, definitely check out our in depth video right here that walks you through the step by step process on creating a bubble tea shop.
5.) Ice Cream Shop
The second most profitable food and beverage business out there is an ice cream shop.
Luckily enough, our 720 Sweets, our dessert chain, is in the forefront of this as well. This is the reason why we’ve expanded so rapidly.
Pros of an Ice Cream Shop
The cost of goods sold (COGS), once again, is relatively low in comparison to a full-service restaurant. We’re talking about around 20% to 25% in cost of goods sold (COGS).
The quality control is definitely a pro because when you make these things in batches, it becomes a formula. Basically, you just need to follow the recipe and create mix A, mix B, mix C, and out comes a product. This means it doesn’t require highly skilled labor and talent to create the product.
And who doesn’t like ice cream? Everyone loves ice cream and the volume you potentially go through is crazy during the summertime.
Cons of an Ice Cream Shop
Now, some of the cons of running an ice cream shop is that the equipment is a little bit higher in cost, seasonality is a problem and the low average ticket cost. So just like bubble tea shops, you’ll need a lot of volume.
The reason why 720 Sweets was able to do moderately well is because, knowing the fact that seasonality would be a problem, we introduced bubble tea and taiyaki in our menu. This allowed us to lift our average ticket cost.
People don’t only come in for dessert. They can also can come in for a light lunch or a light dinner. We created taiyaki sandwiches, which is a croissant sandwich that people love, which helped us increase our average ticket cost and tackled the seasonality problem.
6.) Ramen Shop
The third most profitable food and beverage business idea is having a ramen joint.
Pros of a Ramen Business
Ramen is amazing when it comes to profitability. The cost of goods sold range from 15% to 20% and there is a high demand for it – people love ramen.
The average ticket cost is a lot higher compared to a bubble tea or ice cream. It can be lifted even more if you have alcohol available and set menus like a bowl of ramen and a plate of gyoza.
Although ramen isn’t as simple to make as bubble tea or scooping icecream, it only requires medium-skilled labor. A full-on trained chef isn’t required since a lot of the processes are actually preset.
Best part about a ramen business? The super-quick turnover.
Not only is ramen quite fast to make, but it is also fast to eat. In Japan, ramen is meant to be a quick meal, where you’re supposed to eat and slurp the noodles right away.
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 they do because of how high the turnover is.
Cons of a Ramen Business
On the flip side, the investment is a lot higher compared to a bubble tea or ice cream shop. You’ll need to consider more expensive equipment, ingredients, and number of staff.
For a bubble tea and ice cream shop, there are cases where you only need 1 or 2 staff on site. A ramen shop needs more on a regular basis for it to run.
And because of how popular ramen is, the competition is quite fierce. You’ll see many of the big names from Japan set up shop overseas. You’ll have to consider how you’re going to be able to compete with them.
7.) Pasta Shop
The fourth type of super-profitable food and beverage ideas is having a pasta joint.
Pros of a Pasta Shop
After interviewing more than hundreds of food and beverage owners, F&B shops that specialize in pasta always sits near the top in terms of profitability because of how a staple this item is. Just like ramen, people love pasta, and the COGS is incredibly low because they’re just mixing flour and water.
We are talking around 15% to 20% cost of goods sold, high demand, average ticket cost is definitely a lot higher than bubble tea and ice cream.
Cons of a Pasta Shop
The amount of investment needed to open a pasta joint is higher when it comes down to it. You’ll need a full-on kitchen and higher-skilled labour to open up a pasta place.
8.) Pizza Shop
The final most profitable business idea in 2019 is having a pizza shop.
Pros of a Pizza Shop
This has always been super profitable because you’re basically mixing dough and water. You’re talking about maybe 10% to 15% in cost of goods sold (COGS).
Now, we’re not talking about those $1 pizza spots. But your COGS will be higher depending on what type of pizza 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.
When it comes to pizza, the skill required to make pizza is lower than a full-on restaurant as well. If your shop is more grab n’ go and cafeteria-style, you can also avoid having to hire extra staff.
Cons of a Pizza Shop
On the con side, the investment for having a pizza shop is definitely a lot higher as well.
9.) Restaurant Meal Kits
Now the next most profitable item are restaurant meal kits.
And this is really catered to the people that already have a restaurant. But they’re tunnel-visioned in focusing on their own food delivery, they’re looking at their menu item very vertically without being creative.
Pros of Restaurant Meal Kits
Now when done right, you can actually create use the same ingredients that you already have and cream meal kits to serve the same demographic in a different way. And that is also another very, extremely profitable way of making another revenue stream.
Now as I was saying, why is this such a beautiful model it is because you can use the same ingredients that you have already purchased. If you have a restaurant to actually repackage them as meal kits, that means you’re not buying anything additional.
And you’re using the same ingredients that would save you on your spoilage.
And on top of that, it will always keep your ingredients fresh selling meal kits, you also can ensure the quality assurance is there, because as opposed to selling your food items out the door.
And by the time the food gets to your customers place, it might become soggy and might have condensation and it might just be cold, and it might be a clump. And that’s reason why when you selling meal kits, the quality is always there, because everything is already pre packaged, but not yet made.
And because you don’t need to make the items, you actually create more margins for yourself, you don’t need to have that much labor for you to prepare the packages for you to send out as meal kits. And that’s the reason why it is actually higher margins than a lot of your other items.
And on top of that, when you’re selling meal kits, usually you’re selling meal kits in servings of two to four. And when you sell servings suited for you end up making more money, because you’re serving more people in that one box.
Now when it comes to staffing, this is a no brainer, all you have to do is to make sure you have the recipe, all your sauces created and all your food ingredients all rationed out. And that means you don’t really need a high skilled labor to create these milk it’s and that’s one of the reasons why I love restaurant meal kits as a stream of revenue. So so much.
Now finally, the reason why I really, really enjoyed this item is because it is super versatile. Whether you’re selling pizza, spaghetti, sushi tacos, or even alcohol, you can actually package them into meal kits into DIY kits that you can sell.
That means that it goes across the board, as long as you’re creative now when it comes to the cons of selling restaurant meal kits is that it is not a regular repeatable item that you’re purchasing. Because sometimes you might feel like a meal kit would be a good idea, let’s say for Valentine’s or milestones.
Cons of Restaurant Meal Kits
However, it is not something you order on a daily basis. And that’s reason why we shouldn’t be banking on this item as a repeatable item, it should just be an additional revenue stream.
And on top of that, you do need to spend some money in educating your guests and on top of that marketing this item and that requires some work and some creativity.
There we go! The most profitable food businesses you can start.
But just because the concept is profitable, it doesn’t mean it will be a walk in the park. There are a ton of mistakes and misconceptions that I see new restaurant owners make, which push them into bankruptcy. Whether that poor hiring practices, unrealistic expectations on marketing, or just bad business fundamentals.
Make sure you are aware of these so you can start off on the right path and avoid the unnecessary headaches when starting your restaurant.
Starting a restaurant or already own one?
If you’re in the beginning stages of starting your dream restaurant, cafe or food business and want to do your best to avoid costly mistakes or waste a ton of money…my free masterclass will give you an in-depth look at my ACE formula – the same formula that I used to build my 7 store ice cream chain and how my students were able to get more clarity in their food business.
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