I Built a $100M Frozen Yogurt Empire in 11 Minutes
Summary
- I learned that frozen yogurt stores can make an average of $2,100 a day by selling 500 cups at 8 ounces each, but it's not as profitable as it seems.
- The average frozen yogurt store earns between $750,000 and $800,000 annually, with owners taking an average of $93,000 home, not accounting for the challenges and overheads.
- The margin in frozen yogurt typically runs between 10-15%, with franchises taking around 6% of the top line revenue, which can be substantial when margins are tight.
- Buying equipment from business foreclosure sites like rasmus.com can significantly reduce startup costs; you can get franchise-level equipment for a fraction of the price.
- The frozen yogurt industry is commoditized, so exceptional customer service, a clean store, and word-of-mouth can be major differentiators.
- Yogurt shops strategically arrange their toppings with higher-margin items like yogurt first and more costly toppings like fruit at the end, maximizing profits.
- Larger serving cups lead customers to serve themselves more yogurt, inadvertently increasing store sales, demonstrating the power of default options.
- Effective customer acquisition for low-ticket items like yogurt often relies on referrals, partnerships, and word-of-mouth rather than expensive pay-per-click advertising campaigns.
- By offering more variety, you encourage customers to consume more, which can be beneficial if you're offering high-margin items.
- Ultimately, you can stand out in any industry by creating a better customer experience and being attentive to the lessons learned from observing other businesses in the space.
Video
How To Take Action
I would suggest implementing cost-saving measures like purchasing equipment from business foreclosure sites such as rasmus.com to reduce startup expenses for small businesses. You can get top-notch gear at a bargain; this is especially useful for restaurants or gyms.
For entrepreneurs looking to differentiate in a commoditized market, focus on offering exceptional customer service and a clean environment. This is even more crucial than the product itself. Pay attention to the details and ensure the business space is inviting and well-maintained.
Make sure to arrange products strategically. Start with high-margin items and end with more expensive options. This encourages customers to fill up on the profitable items first, boosting your overall margins.
Increase sales by leveraging the power of default options. For instance, offer larger cups to induce customers to serve themselves more, which, in turn, leads to increased sales without making them feel overcharged.
For personal growth or small business marketing, word-of-mouth is key. It's low-cost and effective. Build partnerships and create referral programs. If your budget is tight, skip pay-per-click advertising. Instead, form alliances with organizations or groups, like colleges or community clubs, to promote your business. Offer incentives to bring people through the door.
Remember, variety drives consumption. By offering more choices, you enable customers to indulge, which is great if your margins are high on those items.
Lastly, always remind customers of your business and encourage sharing. Even simple requests for reviews or shares can significantly boost your businessās visibility and growth. Implement these strategies thoughtfully and watch your business thrive.
Quotes
"The underlying lesson is that if you look at any industry there's the potential to have an amazing business inside of it even if it is a commodity today"
– Alex Hormozi
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"It doesn't take a lot to win, most times just to beat everybody you got to be better than the bottom 25% and you make money"
– Alex Hormozi
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"The power of the default option is why assumed closes and things like that are so powerful"
– Alex Hormozi
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"When you have the option to give a customer the ability to pick their own pricing by usage, do it"
– Alex Hormozi
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"If you don't have tons of cash and you're not funded, then the two most profitable strategies for acquiring customers: you get Word of Mouth"
– Alex Hormozi
