 Hello friends welcome back to module 2 lesson 2.1. Today we're going to be talking about how to choose a concept that matches your unique lifestyle. If you haven't gone through the previous lesson make sure you go back so then you understand because that lays the foundation in the context of what we're talking about today. What you're going to be learning today are the four money-making concepts that you can choose from and their pros and the cons. First you need to put on your entrepreneurial hat on and this entrepreneurial hat is something we covered in our previous lesson about the three altered ego. Today we are on a visionary mode. Every part of the lesson and every part of the modules moving forward we need to put on different hats. We need to think a little bit differently because we're in different positions. Now we're thinking like entrepreneurs we're visionaries and we need to foresee into the future. So as we talked about earlier the golden trifecta. Today we're focusing specifically on the concept and moving forward once again we're going to cover customers and locations so then that way you can work your way down and in order for you to find that golden trifecta that three overlapping points to ensure the best success chance for your restaurant. So why is it important to know your business type and the way you want to function though you want to be able to choose the type that fits your specific budget okay. One that fits your ideal lifestyle and your risk tolerance and the reason why I say that is because I have it's crazy. I have a friend that spent more than two million dollars creating his restaurant and at the end of the day all he was wanting was just a normal cafe. He wants a normal cafe because he wants to feel important because he wants to be able to do something. He wants to be able to have his creation out there in the world. He's not looking to make big money so it really doesn't really align because he can easily spend two hundred thousand dollars over two million dollars creating a full-fledged restaurant. Understanding the type of restaurant and the concept that you have to work within your own preference is super crucial to your success because at the end of the day what we're building right now is a vehicle that brings you happiness a vehicle that gives you the freedom of time and financial freedom as well and like I said last thing you want is to be in five hundred thousand dollars in debt all just to build a fine dining experience when an ice cream shop with minimal risk would do much much better for you. So understanding the four different concepts and the risk levels and what they really entail the pros and cons is really essential to identifying the type of restaurant you want to be able to open. Now without further ado let's dive right in. The four food and beverage types okay and once again there are many many different types out there everyone has their own lingo and today I'm just going to explain to you about these four types because they're the most generic out there. The first type is the fast concept, second type is the quick service restaurant and then casual dining and lastly fine dining. Let's dive right in. Fast concept what are fast concept restaurants? They're fast concept that means that they're little to no servers involved. They're really small shop concepts okay average order of amount is five to seven dollars. Location, high traffic area that is easily accessible. The reason why it has to be in a high traffic area is because your average order amount is low. So when the average order amount is low five to seven dollars you need to be able to make that in volume okay. You need people to walk through the doors, buy a coffee, buy a sandwich, buy this and that, grab and go right away. It needs to be in a convenient location. No one's going to drive all the way to your place just to buy a coffee and leave right. So ideal size we're looking at 500 to 900 square feet, capacity around 300 orders per day. These are the projections and you're looking at roughly $50,000 a day. So once again this projection, sorry not a day, a month. These projections are just simply for reference purpose only. Of course there are other fast concept that makes substantially less and substantially more. I'm giving and providing to you this to you as a projection so then that way it allows you to dig in deeper yourself okay. So don't take this for, don't quote me on this is what I'm trying to say. So an example of a fast casual would be an ice cream shop. I used to run seven locations of an ice cream shop. So precisely the reason why I chose to run an ice cream shop is because it was easy. Now I'm going to elaborate a little bit more later on when we talk about the pros and cons. Bubble tea shops are simple as well. Coffee shops are simple. Dessert shops. They're all simple locations, simple concepts versus a full dining one. Now the pros of running these fast concepts, these ice cream shops, first of all, it is much lower investment that is needed. Lower skill required to make the food little to none I would say in comparison. And by the way, everything that I'm talking to you about and sharing with you is relative to other concepts within the industry. Just because I say it's lower skill required to make the food doesn't mean that when we make our ice cream, it's easy. It is not easy by any means. We had to pay thousands of dollars for research and development to create all the mixes. But now that's a story for another time. Easy setup, much easier to set up for renovations, much easier for you to get the shop up and running. If you're looking into this fast concept style, less labor issues, much less labor issues because you have little to no servers and you don't need to deal with all the dramas of running a full-fledged restaurant. However, the cons of that, the negative with this is that you only can have limited product offering because of the fact that you're running a fast concept. Oftentimes you don't need and you're not going to be installing a full-fledged kitchen. You're not going to be installing friars. You're not going to be installing stoves. You're not going to be installing a hooded fan with exhaust and everything. Those are like the whole nine yard. We're focusing on the fast concept, which is the reason why we limit our product offering and especially because we want to run it lean. And on top of that, because we have limited product offering, we are also capped in the amount of money that we can make with this type of concept. So if you're trying to make millions of dollars, then probably this would not be the case. Now, the second type of concept would be the quick service restaurants. No servers or limited servers, very similar to a small shop concept. However, the average order amount is slightly higher, actually a little much more higher, I would say eight to fifteen dollars. And oftentimes this would include a quick bite, a sandwich, so on and so forth. Location, once again, has to be a high traffic area that is easily accessible. It is because you're looking once again, average order value of eleven dollars. That is not a lot. You definitely need the volume to come through the doors in order for you to be able to make up enough for your rent and all your labor and so on and so forth, right? Ideal size, same thing, 500, 900 square feet is ideal as well. Capacity would be a little bit less than the fast concept. 250 orders per day. Projection, we're looking at around 77,000 dollars per month, okay? Once again, these are just really, really rough projections that I'm submitting to you. It really fluctuates depending on where you are and your concept. So use this only as a guideline, guys. So examples of this type of concept would be like a Donair shop or a Bami shop. So something small, something quick and grab and easy to go. But the focus is really more on the food aspect, not necessarily the desserts, not necessarily the drinks. Now, the pros of running a quick service restaurant is that you have a little bit more revenue opportunity versus the fast concept. You also require a low skill level to make the food. So making a Bami, making a Donair, it is much more lower skill required to make that versus some, if you're to run a fine dining shot, a restaurant that has someone that needs to be super skillful to create that, that's what I'm referring to. Easier set up once again. And on top of that, once because of the fact that you don't have that labor, you don't need to deal with the drama of running your labor as well. The cons is that this would require a decent size investment. I would say it's around 20 to 30% more than your fast concept restaurants. On top of that, you also have more controls over your cost of good souls and your profitability. You need to manage it better because as you have more food items, when you have more offering, then you would be buying more ingredients. When you buy more ingredients, the chances of it going lost, the chances of spoilage, the chances of theft all has substantially, not substantially, but relatively, it would increase as well versus your fast concept. Third type of dining is the casual dining service will be included. It is a small to medium sized shop. Average order amount would be 10 to $20, $16 in average location. It could be in a high traffic area or a destination location. Destiny destination location means that people have to drive there specifically go to that location for your food. Whereas a high traffic area, people could be walking by down the street to make their errands, and they see this shop right there, and then they would just be dining there. So that's the difference between the two. The reason why it could be either or is because the services that we're looking at per day and on top of that, people would actually drive out just to have a meal. That's okay. Ideal size, we're looking at around 1000 square feet, 200 servings per day, roughly around $90,000 in revenue is what you should be expecting if you're running a casual dining. Now examples of this type of shop would be a grandma's recipe shop and a hole in the wall kind of shop. So any of these concepts, specialty concepts, there's a ton of them out there are considered as casual dining. Now the pros of running a dining casual dining is also once again, more revenue opportunity over the quick service restaurants, more fulfillment in creation. And this is something that I see a lot of people have successes in is casual dining because a lot of people who are in the industry of restaurant, they have passion. They're usually chefs, they're usually someone that enjoys making food. And part of why they're doing what they're doing is because they want to have their creation in the hands of people that enjoy their food. And that's the reason why casual dining is one of the more popular concepts out there. Now what the cons is that it is higher investment in comparison to the previous two that I was sharing with you, because you need a you need a more of a of a better kitchen, you need your hooded fans, you need your deep fires, you need your grills, all those different equipment. So definitely higher investment. And on top of that, once again, more controls over your cost of good souls and profitability as I was mentioning earlier. And because of the fact that now you have more labor, you're going to have labor issues. And this is something that you cannot get away from it, it just comes as part of the package. And on top of that, you do require higher skill level to make the food because now you're actually making dishes for people to enjoy, you need to be able to have that talent. And a lot of times, if you don't have that talent, this becomes a really big issue for entrepreneurs, right? Entrepreneurs that don't know how to make food, they need to go out there and hire someone that is skillful to create the creation that they have in mind. Last concept is the fine dining one, it's a full service experience, average order amount is $50 because we're talking about let's say an entree and appetizer and a glass of wine location that most likely it would be in a destination location, people that have and they go to fine dining, they usually don't mind driving or commuting just for a night out or it is something that's for celebration milestones, etc. Ideal square footage is going to be 1000 square feet plus around 130 service per day and you're looking at $182,000 in revenue per month. Now mind you, this number might be over exaggerated or under once again, reference purpose only, but it's not something to note for is the fact that the $180,000 it might seem very, very attractive over the other concepts. However, you have much more cost involved, much more cost of good solds, much more labor that you need to account for. So we're not talking about profits guys. Some examples, full service with wine restaurants typically would be fine dining, okay? The pros of running a fine dining restaurant is much more revenue opportunity. Guys, key thing here is to look out for that. I'm talking about is the revenue, not profits, okay? More satisfaction in creation as well. Once again, fine dining experience is all about being able to have your creation out there in the world and once again, fine dining is one of the best ways to be able to do that and we oftentimes we see chefs as the owners. Once again, highest investment out of all four different concepts, okay? Because you need to have a full on kitchen, okay? And on top of that more controls, even more controls on your cost of good solds and your profitability, way more labor issues and it's the highest skill level to make food. So if you're not at that level, I would highly recommend not to start with a fine dining restaurant. Definitely go with something simpler. You need to choose a concept that best suits your needs guys. Just because I enjoy running an ice cream shop doesn't mean running an ice cream shop is the way to go for you. If you're a chef, if it's something that you enjoy having your creation out, then maybe perhaps consider a casual dining experience. Nonetheless, it is something that is all reliant on you and yourself only, okay? So don't let the money factor be the factor that drives you. It has to, you have to consider a few things which we'll get into very shortly. Today we have learned the four money making restaurant concept to choose from in the pros and cons. Next up, we're going to be talking about how you're going to be able to choose the winning restaurant concept that best fits you. I'll see you guys in the next lesson.