Brick & Mortar

Know your market.
Outrun your competition.

Small businesses make decisions without the market context that well-resourced companies take for granted. That seemed worth closing.

Our last report found $80,000 in annual upside for a two-location franchise. Everything from public data.

We are two brothers living in Highland Park, Saint Paul. Aidan studied Machine Learning at Columbia University. Zane works in AI enablement for an insurance company here in the cities. We are curious — and genuinely well positioned — to help optimize your business.

AI has taken us leaps. Yet no one consults with small business. Deloitte and McKinsey only consult with big business and governments because that's where the money is.

We only work with brick and mortars.

— Aidan and Zane  ·  Saint Paul, MN
Aidan and Zane
Real owners. Real numbers. Real outcomes.

From an ice cream shop in small-town Kansas to a physical therapy clinic in Minnesota, we work with independent owners across the country.

We already know your sector.

We've already dug into the benchmarks, competitive dynamics, and what separates the top operators across these sectors — and plenty more. Here's a sample of what we've worked on. Pick one to see it in action.

Café / Coffee Shop

Cafés generate revenue primarily through beverage sales (coffee, espresso drinks, tea, cold brew), which carry the highest margins, supplemented by food sales (pastries, sandwiches, light fare) and, increasingly, retail products…

Key BenchmarkTarget
Cost of Goods Sold (COGS) %25–35%
Customer Retention Rate (Monthly)60%+
Net Profit Margin7–20%
What Separates Winners

Premium product quality and specialty coffee positioning: Top-performing independent cafés differentiate on higher-quality product and greater commitment to social responsibility. Quality of the espresso/pour-over is…

Market Tailwind

Specialty coffee demand and premiumization: Nearly 60% of American consumers prefer gourmet or specialty coffee (NCA).

Watch Out For

Coffee bean cost inflation: Arabica coffee prices surged to $4.41/lb in 2025 (significantly above the five-year average), and the global coffee price benchmark averaged 354.32 US cents/lb in February…

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Full-Service Restaurant

Full-service restaurants (FSRs) generate revenue through three primary streams: (1) food sales (~65–75% of total revenue), (2) alcohol/beverage sales (~20–30% for concepts with a bar program, carrying higher margins), and (3) ancillary…

Key BenchmarkTarget
Food Cost Percentage28–35% (median 31% for operators >$2M sales)
Labor Cost Percentage (LCP)25–35% for profitable operators; industry median 36.5%
Prime Cost55–65% of total sales for FSR (vs. 55–60% for QSR)
What Separates Winners

Prime cost discipline at or below 62%: Top-quartile FSR operators demonstrate rigorous prime cost management.

Market Tailwind

Experience-driven dining and occasion value: Guests who feel the experience justified the price are the strongest promoters.

Watch Out For

Elevated labor costs squeezing margins to unsustainable levels: Operators cite labor as the dominant P&L risk.

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Restaurant

Restaurants generate revenue through dine-in, takeout, delivery, catering, and private/sponsored events. Alcoholic beverages carry the highest margins, with markups up to 400%.

Key BenchmarkTarget
Prime Cost Ratio≤60%
Food Cost Percentage28–35%
Labor Cost Percentage20–30%
What Separates Winners

Disciplined prime cost management: Top operators reach upper-bound profit margins through disciplined labor scheduling and tight food-cost controls.

Market Tailwind

Digital ordering and delivery growth: The shift to digital channels is a durable tailwind.

Watch Out For

Labor shortages and rising wage costs: Operators face ongoing difficulty attracting and retaining staff, leading to increased wages and benefits spending.

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Bar & Grill

Bar & grills generate revenue from two primary streams: food sales (~60–65% of revenue) and beverage/alcohol sales (~35–40% of revenue).

Key BenchmarkTarget
Prime Cost Percentage60–65%
Food Cost Percentage25–35%
Beverage Pour Cost15–28%
What Separates Winners

Tight operational discipline and cost controls: Top-quartile operators obsessively track prime cost, pour cost, and labor scheduling.

Market Tailwind

Experiential and entertainment-driven dining: Customers respond strongly to live sports viewing, entertainment programming, and immersive atmospheres.

Watch Out For

Persistent labor shortages and wage inflation: 85% of operators increased wages to attract talent, yet still faced shortfalls. 82% of operators are short at least a few staff members, averaging…

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Bar & Café

Bars and cafés generate revenue primarily through beverage sales (alcoholic and non-alcoholic), food/snack sales, and ancillary streams such as events, merchandise, and loyalty programs.

Key BenchmarkTarget
Gross Profit Margin (Beverage)70–80%
Net Profit Margin10–15% (bars); 7–10% (cafés)
Pour Cost / Beverage Cost Percentage15–28%
What Separates Winners

Strong loyalty program driving repeat business: The Starbucks Rewards program had 34.6 million active U.S. members in Q1 2025, demonstrating the outsized revenue impact of structured loyalty.

Market Tailwind

Experiential dining and social gathering demand: Consumers strongly value the social and experiential dimensions of cafés and bars. 84% of consumers say going out to a restaurant with family and…

Watch Out For

Persistent cost inflation across food, labor, and insurance: More than 90% of operators said food, labor, insurance, and overall inflation continue to be significant challenges.

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Bar

General bars generate revenue primarily from the sale of alcoholic beverages (beer ~28.4% of revenue, wine ~25.6%, spirits ~21.6%), with food, cover charges, and entertainment as secondary streams.

Key BenchmarkTarget
Pour Cost (Beverage Cost %)15–28%
Liquor Cost % (Spirits)18–20%
Beer Pour Cost %20–24%
What Separates Winners

Tight Inventory & Pour Cost Control: Top-performing bars actively monitor pour costs and shrinkage.

Market Tailwind

Experience & 'Eatertainment': Venues that blend immersive social experiences, unique atmospheres, and entertainment (trivia, live music, themed events) drive strong word-of-mouth and repeat visits.

Watch Out For

Sober-Curious Movement / Declining Alcohol Consumption: Nearly half of Americans (49%) are actively trying to drink less alcohol.

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Italian Restaurant

Italian restaurants operate as full-service (FSR) or fast-casual dine-in businesses with supplementary revenue from takeout, delivery, catering, and private events.

Key BenchmarkTarget
Food Cost Percentage28-32%
Labor Cost Percentage34-36%
Pre-Tax Profit Margin2.8-5%
What Separates Winners

Daily house-made pasta and authentic sourcing: Top-quartile Italian restaurants differentiate on culinary authenticity—fresh pasta made in-house, imported DOP ingredients (San Marzano tomatoes, Parmigiano-Reggiano), and…

Market Tailwind

Authentic, house-made pasta and fresh ingredients: Reviews of top Italian restaurants consistently praise fresh, hand-made pasta and imported or high-quality ingredients as a primary differentiator.

Watch Out For

Slow service and long wait times: Industry data shows 76% of in-house diners become impatient after 15 minutes without being served.

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Mediterranean Restaurant

Mediterranean restaurants operate primarily on a dine-in full-service or fast-casual revenue model, supplemented by takeout, catering, and increasingly third-party delivery (at 20–30% commission cost).

Key BenchmarkTarget
Food Cost Percentage28–35%
Labor Cost Percentage30–36.5%
Prime Cost Ratio55–65%
What Separates Winners

Authentic menu with disciplined menu engineering: Top-performing Mediterranean restaurants use quarterly menu engineering (analyzing item profitability vs. popularity) to promote high-margin stars and eliminate…

Market Tailwind

Health & wellness positioning: Mediterranean cuisine is structurally aligned with the #1-ranked diet (Mediterranean Diet, named best diet for multiple consecutive years by U.S. News & World Report).

Watch Out For

Labor cost inflation: 80% of restaurant operators reported labor costs increased in 2024.

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Thai Restaurant

Thai restaurants typically operate as independent full-service or fast-casual establishments with revenue from dine-in, takeout, and third-party delivery channels.

Key BenchmarkTarget
Labor Cost Percentage25-30% (casual), up to 35-40% (full-service with specialized chefs)
Prime Cost55-65% of sales
Table Turnover Rate3-4 turns per meal period (fast-casual/family dining)
What Separates Winners

Employing chefs trained in authentic Thai cooking techniques and recipes is widely cited as a competitive must-have.

Market Tailwind

Authenticity is the most prized attribute: 'authentic' is one of the most frequent positive adjectives in reviews of Thai restaurants, often paired with 'delicious,' 'great,' 'fresh,' and 'tasty.'…

Watch Out For

Inauthentic, watered-down dishes—'bland, mild imposters of Thai dishes'—at touristy or Westernized locations are a major source of negative reviews, often combined with complaints about overpricing.

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Asian Noodle Restaurant

Asian noodle restaurants operate primarily on a food-and-beverage revenue model with occasional merchandise or catering add-ons. Revenue is driven by dine-in, takeout, and increasingly third-party delivery.

Key BenchmarkTarget
Food Cost Percentage (COGS %)25–30%
Labor Cost Percentage25–35%
Prime Cost55–65%
What Separates Winners

Signature broth / recipe differentiation — operators with a proprietary, time-intensive broth (tonkotsu ramen, pho, beef noodle) create a product that is difficult to replicate at home or by competitors, driving…

Market Tailwind

Authentic, flavorful broth and fresh noodles — reviews consistently highlight 'deep flavorful broth' and 'fresh noodles' as primary drivers of positive sentiment and return visits.

Watch Out For

Long wait times and slow service — the most common complaint in reviews; waits of 30+ minutes for a table and 45+ minutes for food are cited as primary reasons for negative ratings and non-return.

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Auto Repair

Auto repair shops generate revenue through two primary streams: labor charges and parts sales. Parts typically represent 40–50% of total job costs, with labor making up the remainder.

Key BenchmarkTarget
Gross Profit Margin (Labor)60-70%
Gross Profit Margin (Parts)40-50%
Effective Labor Rate (ELR)Within 10% of posted rate
What Separates Winners

Strong online reputation management (4.5+ stars, 100+ Google reviews): 70% of consumers rely on reviews and recommendations when choosing an auto repair shop (Meineke study).

Market Tailwind

Aging vehicle fleet driving sustained repair demand: The average U.S. vehicle age reached 13.1 years (BBB, 2025), creating durable, non-discretionary demand for maintenance and repairs.

Watch Out For

Technician shortage creating capacity constraints and wait times: The industry will need 470,000+ new technicians before 2028.

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Auto Body & Collision

Auto collision shops generate revenue through three primary streams: (1) Labor — technicians bill at a door rate (typically $55–$75/hr for non-DRP independents, negotiated lower under DRP contracts) multiplied by estimated hours; (2) Parts…

Key BenchmarkTarget
Keys-to-Keys Cycle Time8 days or fewer (top performers); industry average >11 days
Technician Utilization Rate85%+ (top performers); 70–80% typical
Billed Hours per Repair Order (RO)Target 150 hours per RO (aggregate); individual metal tech benchmark: 1.5 billed hrs per available hr; painter: 2.0 billed hrs per available hr
What Separates Winners

OEM certification and ADAS/EV repair capability — Shops holding OEM certifications (Tesla, Ford Pro, GM Collision, etc.) are approved to perform OEM-procedure repairs and can access proprietary repair data, parts…

Market Tailwind

ADAS calibration revenue uplift — vehicles with Advanced Driver Assistance Systems require post-repair camera, radar, and sensor calibrations that add significant revenue per RO.

Watch Out For

Declining claim frequency due to collision-avoidance tech safety improvements — collision-avoidance tech features (automatic emergency braking, lane-keep assist) are measurably reducing accident…

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Physical Therapy

Outpatient PT clinics generate revenue almost entirely through fee-for-service clinical visits billed to insurance payers (commercial insurance, Medicare, Medicaid, workers' compensation, auto injury) or directly to self-pay patients.

Key BenchmarkTarget
Revenue Per Visit$95–$130
Visits Per Day Per Therapist10–12 visits/day
Visits Per Patient Per Episode of Care10–12 visits
What Separates Winners

Optimized payer mix with high commercial, workers' comp, and auto-injury concentration — clinics specializing in workers' comp or auto injury routinely achieve net margins of 25%+, compared to 12–15% for Medicare-heavy…

Market Tailwind

Aging population driving structural demand growth

Watch Out For

Medicare reimbursement rate cuts creating sustained margin pressure — Medicare has cut conversion factors multiple times; average reimbursement hovers around $81–83 per visit in some markets…

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Personal Services

Personal services businesses (NAICS 812) operate primarily on a fee-for-service model: customers pay per appointment or session (haircut, nail service, massage, personal care assistance).

Key BenchmarkTarget
Client Retention Rate75–85%
Staff Utilization / Booking Rate70–85%
Revenue Per Visit (Ticket Average)$45–$120 (salon/barbershop); higher for spa/med-spa
What Separates Winners

Provider retention and team stability: Top-quartile personal services businesses retain their skilled staff, which directly preserves client relationships.

Market Tailwind

Growing demand for self-care and wellness: Customers frequently cite the psychological and physical benefits of regular personal care services ('I always leave feeling like a new person'; 'this place…

Watch Out For

Staff shortages and high turnover: The most operationally damaging complaint—both from operators and clients—is inconsistent staffing.

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Self Storage

Self-storage operates a real-estate-backed rental model: owners lease unit space (typically month-to-month) to residential and commercial tenants, generating recurring rental income from a largely fixed-cost asset.

Key BenchmarkTarget
Physical Occupancy Rate85-94%
Operating Expense Ratio (OER)25-40%
Revenue per Square Foot (Annual)$8-$15
What Separates Winners

Climate-controlled unit mix: Offering climate-controlled and high-security units is crucial for accommodating varied customer needs, commanding rate premiums, and preventing mold/pest damage that triggers negative…

Market Tailwind

Secular demand growth driven by urbanization and housing space constraints: The global self-storage market is projected to grow from $68.47B (2025) to $111.55B by 2035 (CAGR ~5%), underpinned by…

Watch Out For

Oversupply and occupancy compression in Sunbelt markets: New supply delivered post-pandemic has pressured occupancy, with some REITs reporting 230 bps year-over-year drops in same-store occupancy…

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Convenience Store

C-stores generate revenue from two primary streams: (1) Fuel sales — historically ~63% of total revenue but declining (62.9% in 2023, down from 66.2% in 2022), with razor-thin per-gallon margins (~47 cents/gallon gross for large operators…

Key BenchmarkTarget
In-Store Gross Margin25–45%
Average Basket Size (Transaction Value)$7.50–$9.00
Monthly Transactions40,000–50,000/month
What Separates Winners

Robust foodservice program with quality fresh/prepared food: c-stores with strong hot food programs compete directly with QSR and generate basket sizes 2–3x higher than snack-only trips; the top performers treat the hot…

Market Tailwind

Foodservice quality and freshness

Watch Out For

Theft and shrink

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Gas Station / C-Store

Gas station/c-stores operate two intertwined but economically distinct revenue streams: (1) Fuel sales — the dominant top-line contributor at ~67.3% of total revenues in 2023, but only ~38.6% of profits due to razor-thin per-gallon margins…

Key BenchmarkTarget
Fuel Gross Margin (cents per gallon)20–30 cents/gallon
In-Store Gross Margin25–35%
Pump-to-Store Conversion Rate27–44%
What Separates Winners

High-margin foodservice execution: Top-quartile c-stores have transformed their foodservice offering — foodservice accounts for 38.9% of in-store gross profit dollars at leading operators.

Market Tailwind

Foodservice quality and 'made-to-order' options: Customers praise c-stores that offer restaurant-quality hot food. 85% of U.S. shoppers have now sampled made-to-order food at convenience stores, and…

Watch Out For

EV adoption eroding fuel volume: Growing EV demand is expected to displace an additional one million barrels of oil per day by 2026, directly threatening fuel gallon volume at independent c-stores.

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Thrift Store

Thrift stores operate on a donated-goods or low-cost-acquisition model, generating revenue primarily through the resale of secondhand merchandise at 10–30% of original retail value.

Key BenchmarkTarget
Inventory Turnover Rate4–6x per year
Gross Margin per Item60–80%
Average Order Value (AOV)$12–$20
What Separates Winners

Strong community engagement and a clean, organized store environment: top-performing thrift stores actively cultivate community loyalty.

Market Tailwind

Sustainability and environmental consciousness: 85% of shoppers view thrifting as good for the environment; stores that market their eco-friendly and circular-economy credentials attract a growing…

Watch Out For

Declining merchandise quality due to fast fashion: the flood of low-durability fast-fashion donations is degrading thrift inventory quality, making it harder to find worthwhile items and eroding…

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02
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