If you’re new to the world of restaurants and want to dive in head first, you need to do some homework. After all, not every concept is the same, and without the proper experience, you risk failure. While we can’t tell you what type of business to run, we can offer advice on profitable types of companies with which you can more easily break into the market.
So, without further ado, what are the most profitable restaurant models of the upcoming year?
We’re going to break this list down into two sections: brick-and-mortar (traditional) restaurants and non-traditional concepts like ghost kitchens and food trucks.
First up are the usual suspects.
Pizza is a classic low-overhead restaurant concept. It takes advantage of the same concepts of ramen and pasta (cheap ingredients, easy preparation, high demand) and brings it into a style of business that can be adapted to accommodate a broad range of secondary goals.
If you want to be a hip, comfortable spot to grab a late-night slice, building a bar and selling pizza by the slice is a straightforward process with a lot of room for wages and profit even after the cost of the food.
Think about it - pizza is what: water, flour, yeast, cheese, and some tomato sauce with one to two extra toppings? Even if you’re going for an elevated style, an eighteen-inch (or “large”) pie costs you maybe $.50 to make the dough, with an additional $2.00 per pizza on average. That means that if you sell eight slices per pie at $4.00, you’re clearing $32 on something that cost you roughly $2.50 to create.
With a general profit margin of fifteen percent, low-cost main menu items, and only a few pieces of (admittedly expensive) equipment, pizza is an excellent option for 2023 no matter how you slice it.
Pasta and ramen each fall under the “low-cost food” category - though, surprisingly, they’re always in demand. And a recent study from Fortune Business Insights reveals that the pasta market is expected to nearly double in volume in the next six years.
And, just like with pizza, both pasta and ramen make use of incredibly affordable ingredients, often relegated to flour and eggs. When you’re able to sell a bowl of ramen or plate of well-made pasta for over $30, you’re going to see a lot of room for growth in your future.
The truth is that even if you opted for a budget-friendly option, say near a college campus, hot noodles are always going to be on the mind of any living, breathing person.
Boba tea is another surprising entry in this list for the inexperienced, but those who know boba understand. Boba pearls, syrups, and tea powders (or loose tea) are quite simple to manage, easy to make, and follow a straightforward formula that’s difficult to mess up. This means that you:
After you’ve taken a peek at rent prices and the market of your city, you’re likely to be looking for a lower-cost alternative to spendy rent downtown. This is where our other two concepts come into play - food trucks and ghost kitchens.
The former has boomed in popularity over the past two decades thanks to names like Kogi and Oink & Moo. And the latter is a more modern concept, but it takes advantage of the same basics - low overhead, a larger market, and (potentially) less competition.
Now, if you’ve thought of opening a restaurant, a food truck was also likely on your mind.
They’re a super-popular option for many new restauranteurs and operators because they’re incredibly cheap to open (in comparison to a full restaurant) and provide a bit more freedom than their standard counterparts.
You’re going to be limited by what you can make due to space, but with that limitation comes the freedom to pick up and go anywhere at the drop of a hat. If you hear that a bar downtown is popping off, you can grab the keys and swing through for two hours and, more often than not, sell out!
And if you notice that business for other trucks is better on the other side of town, you’re not stuck to a single location - you can move to find a new market.
Ghost kitchens are a newer concept that has taken advantage of the boom in delivery and to-go orders over the past two years (thanks, COVID). They use commissary kitchens to prepare food and take to-go and delivery orders exclusively. This makes labor drastically cheaper than a brick-and-mortar due to the fact that you only need cooks.
And, perhaps even better, commissary kitchens come pre-stocked with equipment, meaning you don’t need to drop five or six figures on new and gently used kitchen machinery.
What many restauranteurs are discovering, too, is that ghost kitchens allow a bit of freedom to modify their menus. If you want to make fried chicken and operate a pizza ghost kitchen, just… open delivery for your new fried chicken business and get selling! You don’t need to separate spaces, as customers don’t need to enter - so you can kinda just do as you please.
While ghost kitchens aren’t for everyone, they’re a great option if you know what you’re doing and want to try something a little bit more modern.
Ultimately, there are a lot of paths toward ownership of your own restaurant. While some will undoubtedly take a bit more love and attention to run than others, knowing which options are the most profitable can’t hurt. Anything that can remove the costs of labor, space (rent), and inventory will be a boon, so give these concepts a quick thought - you may be surprised by what you find.
And, as always, swing through Cuboh for helpful tips and tricks on restaurant management, operation, and ownership - we’ll be waiting.