Hook
Two businesses can sell the exact same thing to the exact same customer, and one of them makes three times the money.
I've helped hundreds of people pick the right business to buy, and the money is almost never in the version everyone opens.
So today I'm taking 8 businesses people open every day, showing you the other way to run each one, and which one I would put my own money into.
Talking Point #1
1.Sub-Hook
•Number 1, a sit down restaurant needs 45 employees, a kitchen, and a dining room to feed people, and the version I would open instead feeds those same people out of one window.
1.Immediately dive into an insane story, a psychological study, a compelling thought experiment, a banger quote from a famous person, etc.
•Dan shares how a Black Bear Diner runs about $1.5 to $2.2 million to open and averages roughly $2.8 million a year in sales, and how Del Taco discloses that each restaurant employs about 20 to 45 people, so the biggest sales number on this whole list also comes with the longest payroll.
1.Reveal a deeper layer, higher stakes, a problem or unanswered question, etc. relating to the framework.
•Dan explains how Dunkin's own numbers show restaurants with a drive thru averaging about $1.55 million a year against $1.12 million for the ones without, a difference of roughly four hundred thousand dollars from one feature, and how a small drive thru coffee brand averages about $1.25 million a year on an average order of $10.07 and around 125,000 orders. He is careful to say those are sales figures, not what the owner keeps.
1.Tell the viewer EXACTLY how they can use this information in their real life OR EXACTLY why this information is so important for them to know
•Dan highlights that the diner brings in more money and needs far more people and far more building to produce every dollar of it, so the question to ask about any business is how many employees and how many square feet it takes to make one dollar here. He also points out that a coffee place is a good example because the same customer comes back four or five times a week instead of four or five times a year.
Transition
But a restaurant makes money the day it unlocks the door. The next one can take a down payment before anybody has paid you a dollar.
Talking Point #2
1.Sub-Hook
•Number 2, buying one rental means everything you own is riding on one address in one town, and there is a way to make money off thirty houses without buying any of them.
1.Immediately dive into an insane story, a psychological study, a compelling thought experiment, a banger quote from a famous person, etc.
•Dan shares how owning one short term rental means a down payment, furniture, a renovation, insurance, taxes, utilities, cleaning, the platform's cut, and a mortgage payment every month, all riding on one house in one town, and how the business that manages those houses for other owners opens for around $105,000 to $154,000 and can run out of a spare bedroom.
1.Reveal a deeper layer, higher stakes, a problem or unanswered question, etc. relating to the framework.
•Dan explains how one of these management companies reports about $2,069 a year per long term rental it manages and about $12,400 a year per short term rental, with newer offices managing around 15 properties and experienced ones around 38, and warns that the revenue figure includes money collected on behalf of the owners, so it is not what the management company gets to keep.
1.Tell the viewer EXACTLY how they can use this information in their real life OR EXACTLY why this information is so important for them to know
•Dan highlights that in this version the customer is the homeowner and not the guest, so the numbers that matter are the management fee, how much a house books in a year, how long an owner stays before firing you, and what it costs to sign the next owner. He points out that adding your thirtieth house becomes a sales problem instead of another down payment, and one city changing its rules stops being the thing that ends you.
Transition
So owning nothing sounds safe until you see the other side of it. The next business puts half a million dollars into one room and then needs strangers to keep showing up for it.
Talking Point #3
1.Sub-Hook
•Number 3, a group fitness studio has to fill the room again every single class, and the version I would rather own bills 438 people every month whether they show up or not.
1.Immediately dive into an insane story, a psychological study, a compelling thought experiment, a banger quote from a famous person, etc.
•Dan shares how across 1,005 Club Pilates studios the average studio has 438 members paying every month, signs 38 new ones, and loses 6.4% of them, and averages about $988,000 a year in sales with a median right next to it at $978,000, which tells him the average is not being propped up by a few huge outliers.
1.Reveal a deeper layer, higher stakes, a problem or unanswered question, etc. relating to the framework.
•Dan explains how those are sales and not profit, how the studio costs roughly $400,000 to $1.1 million to open, how about 10% of every dollar goes back to the franchise before any local advertising, and how instructors have to be certified before they teach a single class. He also points out that on the class studio side he cannot put a number on the screen at all, because nobody publishes one.
1.Tell the viewer EXACTLY how they can use this information in their real life OR EXACTLY why this information is so important for them to know
•Dan highlights that the number that decides this business is what an average member actually pays each month multiplied by how many months they stay before quitting, and that a studio packed at 6pm with empty equipment all afternoon still pays rent for every empty hour.
Transition
And the same customer can be worth ten times more somewhere else. The next business sells to the exact person getting a twenty dollar haircut, except it charges a thousand dollars a visit.
Talking Point #4
1.Sub-Hook
•Number 4, a haircut only makes money while a licensed stylist is standing there cutting, and there is a beauty business where that same customer pays every month without ever sitting in the chair.
1.Immediately dive into an insane story, a psychological study, a compelling thought experiment, a banger quote from a famous person, etc.
•Dan shares how a Great Clips opens for about $188,000 to $420,000 and its salons average around $411,000 a year, and how the company's own reporting on the haircut model shows roughly 46% of the money going to payroll and another 14% to rent before the owner sees anything.
1.Reveal a deeper layer, higher stakes, a problem or unanswered question, etc. relating to the framework.
•Dan explains how a med spa averages about $1.25 million a year in sales, roughly three times the salon, and then lists what comes attached to it: a medical director, rules about who can even own a medical practice where you live, the cost of the product going into people's faces, malpractice exposure, and prepaid packages the business still owes service on. He notes one med spa brand disclosed a claim that a franchisee closed without refunding customers' gift cards and prepaid packages, which is an allegation with no outcome yet.
1.Tell the viewer EXACTLY how they can use this information in their real life OR EXACTLY why this information is so important for them to know
•Dan highlights that a $1,000 treatment is nowhere near $1,000 in the owner's pocket once you subtract the product, the licensed provider's time, the supplies, and what it cost to get that customer through the door, and that anyone looking at this needs the ownership rules where they live, the list of providers actually available to hire, the medical director's real cost, and the insurance quote before they sign anything.
Transition
But a bigger ticket buys you bigger problems. The next business is the one everybody calls recession proof, and almost nobody looks at what it takes to get in.
Talking Point #5
1.Sub-Hook
•Number 5, a daycare needs a million and a half dollars, a license, and a teacher for every few kids, and there is a business selling to those exact same parents that opens for under two hundred thousand.
1.Immediately dive into an insane story, a psychological study, a compelling thought experiment, a banger quote from a famous person, etc.
•Dan shares how a daycare runs about $806,000 to $1.56 million to open while the other one runs about $127,000 to $166,000, and walks through what that extra million buys: the building, the buildout, the license, the required number of teachers per child, food service, and staff covering a full working day.
1.Reveal a deeper layer, higher stakes, a problem or unanswered question, etc. relating to the framework.
•Dan explains how the daycare also brings in far more, averaging about $2.19 million a year against roughly $385,000 for a tutoring center, and that the bigger number is buying the owner a bigger set of obligations rather than a bigger paycheck. He also points out that the tutoring franchise holds its owners to a target starting in month 16, keeping 75 students enrolled and staying out of the bottom 8% of the system.
1.Tell the viewer EXACTLY how they can use this information in their real life OR EXACTLY why this information is so important for them to know
•Dan highlights that the smaller business never has to match the bigger one's revenue, it only has to make an acceptable return on a fraction of the money, and the numbers to demand before signing are the monthly price per student, how many students one teacher covers at once, how long a student stays, and what the fixed fees cost a location sitting at the bottom of the pack.
Transition
Now, there is a business people buy specifically because it looks like it runs itself. It barely has employees, and that turns out to be the problem.
Talking Point #6
1.Sub-Hook
•Number 6, a laundromat costs over a million dollars and then waits for whoever wanders in, and there is a version of it where the customer never sets foot in the building and pays every week.
1.Immediately dive into an insane story, a psychological study, a compelling thought experiment, a banger quote from a famous person, etc.
•Dan shares how one laundromat franchise costs about $1 million to $1.87 million to open and its locations average around $538,000 a year with an average profit before debt of about $119,000, and the worst one in the group lost about $51,000, which is the range you have to be willing to land in.
1.Reveal a deeper layer, higher stakes, a problem or unanswered question, etc. relating to the framework.
•Dan explains how the same customers exist without the storefront: gyms, salons, spas, short term rental managers, restaurants, and households that will pay every week to never do it themselves. He then shows the trap, that a drop off location averaging about $548,000 looks cleaner than a full plant averaging $1.23 million only because the washing actually happens at the plant, and that the cheap format is usually not something a new owner can buy on its own.
1.Tell the viewer EXACTLY how they can use this information in their real life OR EXACTLY why this information is so important for them to know
•Dan highlights that the route is the business and the machines are just where the work gets done, so the numbers that decide it are what you charge per pound, how many pounds come off each stop, how many stops a driver makes in an hour, what it costs to wash a pound, and how long an account stays. He warns that one big account carrying the whole schedule is one phone call away from taking the business with it.
Transition
And everything changes the moment you stop waiting on customers and go get them. Both versions of the next business pull into the same driveway, and only one of them still gets paid in December.
Talking Point #7
1.Sub-Hook
•Number 7, a landscaping crew has to sell the whole week over again every Monday, and there is a version where 88% of the customers are already booked before anyone shows up.
1.Immediately dive into an insane story, a psychological study, a compelling thought experiment, a banger quote from a famous person, etc.
•Dan shares how a lawn care franchise opens for about $61,000 to $160,000 and averages around $457,000 a year with a median closer to $353,000, and how the version he'd rather own opens for about $150,000 to $192,000, so the recurring one is not automatically the cheaper one to start.
1.Reveal a deeper layer, higher stakes, a problem or unanswered question, etc. relating to the framework.
•Dan explains how that business averages $92.68 per visit, keeps 76.2% of its customers, and has 88.2% of them on a repeating schedule, but that its sales split hard by age, with owners in their first five years averaging about $208,000 a year and owners past six years averaging about $444,000, which means the route takes years to fill and somebody has to fund those early years.
1.Tell the viewer EXACTLY how they can use this information in their real life OR EXACTLY why this information is so important for them to know
•Dan highlights that a smaller truck proves nothing by itself, and this only wins when the stops are close together, the visits repeat, the licensing is handled, and the customers renew, so the two questions to ask a current owner are how many stops one person makes in a day and how many customers come back for a second season.
Transition
But all seven of those went the same direction, and the last one is where I go against everybody. The business people call automatic is the one I would stay away from.
Talking Point #8
1.Sub-Hook
•Number 8, the popular answer here is the car wash with the monthly membership, and it costs three million dollars more to open than the business I would pick instead.
1.Immediately dive into an insane story, a psychological study, a compelling thought experiment, a banger quote from a famous person, etc.
•Dan shares how the express tunnel wash everyone points to opens for about $3.5 to $4.2 million, while the detailing and paint protection shop across the street opens for about $495,000 to $969,000.
1.Reveal a deeper layer, higher stakes, a problem or unanswered question, etc. relating to the framework.
•Dan explains how the wash's first year locations average about $1.14 million with a median closer to $937,000 and the worst one at $441,000, while the locations open five years or longer average about $2.2 million, and the loan payment starts the month the tunnel opens instead of the year the good numbers show up. The detailing shops, meanwhile, average about $1.4 million with a median right around $1 million on a fraction of the money to get in.
1.Tell the viewer EXACTLY how they can use this information in their real life OR EXACTLY why this information is so important for them to know
•Dan highlights that the automated business took the people off of every car and replaced that with a building, a location, the traffic driving past it, the equipment, and the debt, so the risk moved instead of disappearing, and the reason he'd look at the smaller shop first is that a lower price to get in leaves an owner room to be wrong. He tells the viewer that every number he just used is public and anyone can read it before they wire a deposit to anybody.
Outro
CTA
•Dan CTAs to a related video on the channel
