I conducted some research recently to broaden my views about food business. My main concern was to research about businesses going really well and the factors responsible for it. This research has generated a lot of insights about offering services and investments in business. At the end of my research, I narrow down some most profitable and successful food business.

The margins in a typical food business are very slim, you can expect them to range from 5% to 10%. The most profitable food businesses have their margins from 20% to 35% which is incredible. It should be the ultimate goal of every entrepreneur to increase business margins. So, let’s dive in the most profitable food business which I have come across.

1. Bubble Tea Shop
According to research, the bubble tea shop is the most profitable food business I have come across. The reason behind its profitability is the low cost of goods sold which ranges from 10% to 15%. The making of this product is also super easy with no question on the quality so the main boxes are easily checked. You can follow any recipe and formula and you’ll be good to go.

Make sure to add the relevant powders and syrups to have the best product available to you. You don’t have to spend any resources on the staff training as well as bubble tea doesn’t require any special skills to make. So, the requirements are minimum and profit margins are high.

Here are the pros and cons of bubble tea shop business idea.
Pros

  • The demand of bubble tea shop is very high.
  • Everyone is having bubble tea so you shouldn’t left behind.
  • The turnover rate is also very high.
  • You don’t require a big space to do a lot of volume.
  • People grab their tea and go away which makes it an attractive business model.
  • Equipment is highly affordable which doesn’t require any investment.
  • The quality issues are also non-existent.
  • You don’t require a very high skill to make product.

Cons

  • Average ticket price is relatively low. So, you need a lot of volume to be profitable.
  • The business is quite competitive i.e. Vancouver has more bubble tea shops than Starbucks.
  • You’ll see a lot of these shops anywhere as it’s a highly profitable business idea.

2. Ice Cream Shop
Ice cream shop is the second most profitable food business out there. Ice Cream is an $11 billion industry in US which generates $1.6 Billion in direct wages. In 2017, 1.4 billion gallons of ice cream and frozen desserts were produced in US. This clearly shows the reason why the ice cream business has progressed so rapidly. It is expected to grow more in the coming five years but the rate can be questioned.

Let’s discuss the pros and cons of ice cream business.
Pros

  • The cost of goods is relatively low compared to a full-service restaurant.
  • It requires 20% to 25% in cost of goods sold.
  • Quality control is also a pro because it requires making things in batches.
  • You just have to follow a recipe and out comes a product.
  • A highly skilled labor isn’t required to create the product.
  • Everyone loves ice cream without depending on the environment or weather.

Cons

  • Equipment cost is a bit high.
  • Low average ticket problem.
  • Seasonality is an issue in some parts of the world.
  • You’ll need a lot of volume.
  • You have to expand the menu with things like bubble tea to lift your average ticket cost.

3. Ramen Shop
Having a ramen joint is also a great food business idea which is at 3rd spot in our list. The production volume of ramen food is on the rise since 2009 in US which had reached 6 billion packages in 2018. It is the industry which served Japanese foods to patrons with other food establishments.
Pros

  • There is a high demand for ramen as people love it.
  • Cost of goods sold range from 15% to 20% which indicates a high demand.
  • Average ticket cost is lot higher as compared to some of the other businesses.
  • You can lift the average ticket cost by expanding your horizons.
  • Even it’s a bit complex in making but it requires a medium skilled labor only.
  • It is fast to make and fast to eat.
  • It is considered a quick meal in Japan where you slurp noodles right away.
  • Even the small ramen business owners are earning $2 million per annum.
  • The turnover rate is very high.

Cons

  • The investment is a bit higher comparing to the above mentioned businesses.
  • A number of expensive equipment, ingredients and staff is required.
  • A ramen shop requires more of a regular staff for it.
  • Competition is quite fierce so a good business strategy is required.

4. BBQ Business
BBQ business is at the 4th place of best food businesses. It is considered as an All-American thing. In 2019, about 1.36 US Billion dollars’ worth of BBQ equipment were sold. The American BBQ typically consists of steaks grilling, burgers, and hotdogs. It is expected that the annual BBQ sauce retails sales will reach $918 million. The Americans are typically famous for BBQ parties and stuff with 68% of them don’t even require a special occasion for it.

BBQ equipment business is also on the rise since forever. People go crazy after it as they love BBQ of any form. Most prominently, people always go for best electric smokers and smoker grills to have no compromise on the BBQ and smoked foods.s
Pros

  • People love BBQ and always go for it.
  • The cost of goods is also not very high.
  • The cost of goods sold are around 15% to 20% indicating high demand.
  • Average ticket cost will also not disappoint you.
  • It has less risk involved so you can easily get your ways in the restaurant industry.
  • There are so many ways you can market your business.

Cons

  • A full-kitchen and high skilled labor is required.
  • The investment required is also a bit high.

5. Pizza Shop
It is the last most profitable food business idea according to our research. In 2019, Pizza shops generated 46 billion US dollars in sales. Chain restaurants contributed around 27.81 billion U.S. dollars to the total sales, compared to 18.53 billion U.S. dollars from independent restaurants. There were 78000 pizza restaurants in the United States in 2019, around 53 percent of which were independent pizzerias.
Pros

  • It is super profitable because you are mixing dough and water.
  • We are talking about 10% to 15% in cost of goods sold.
  • When it comes to pizza, the skill required to make pizza is lower than a full-on restaurant as well.
  • You can avoid hiring extra staff if your shop is cafeteria style.
  • Your cost of goods sold will be higher depending on what type of pizza you serve.

Cons

  • The overall investment required is a bit high but the return is also good.
  • Poor hiring practices, unrealistic expectations on marketing, and bad business fundamental are common reasons of pizza shop failure.
  • It is not a walk in the park kind of business.

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