How Many Cups Do I Sell To Make A Profit

Frenchgirl

Hi I am trying to work out if my coffee shop/ /fair trade shop will work. I am trying to work out how many cups of drink I need to sell. Is there a format I can use? Any help would be appreciated.

I know I have to total all the outgoings and incomings but dont know how to judge the drinks lol

Annisele

It's not just "how many cups should I sell", it's also "how much should I charge for each cup".

If you sold each cup of coffee for £1million, you'd probably only need to sell one per year - but knowing that doesn't help you, because you'd never actually sell one.

Similarly, if you sold each cup for 1p you probably wouldn't even cover the cost of the coffee, so you'd never make a profit.

Are there any other coffee shops in the area? If there are, that might tell give you an indication of what the market price for coffee might be (bearing in mind that you'll need to make all kinds of adjustments - some people will pay more for nicer coffee, coffee served in a quieter place, served in a busier place, with cake, without cake, near work, near home....).

You need to work out how much you'd need to take each day to cover your costs (remembering that your time is also valuable). Then work out how much extra it would cost you to provide one cup of coffee, in terms of the actual coffee/milk etc used. Then guesstimate how many cups of coffee you're going to need to sell.

I guess you're not just going to sell coffee though? You'll need to factor in other stuff too.

steve1980

Have you ever run a business before? It's not just a case of opening up, sticking the kettle on and boom, millionnaire by the end of the week.

Frenchgirl

Hi thank you both for your comments. Steve I know it takes more than what you are suggesting to make a successful business. I am going to work hard. I believe there is a place for a coffee shop with proper cups and saucers.

Annisele thank you for your helpful comments. You have given me a starting point and I am grateful for that. x

COOLTRIKERCHICK

I think you need to look at the bigger picture....

If i went into a coffe shop/cafe i would be tempted to have a piece of cake too, or a nice luxury homemade biscuit..

First of all you need to work out exactly waht your outgoings are going to be..

rent
rates
insurance
wages
tax and N.I Insurance
cleaning products..
Advertising
waste disposal costs
renewing crockery/tablecloths
etc

then I would do a 'mock' menu, and work out the actual cost of each item on the menu.. and work out how much you need to take to cover your expenses..

dont forget.. things are getting tighter.. and people are cutting back on those cups of takeaway coffee's etc... so just be realistic with your ideas

McKneff

nice white cups and saucers, nice white coffee pots, nice white hot water pots,nice white bowls and jugs,
little white doylies(with company name on of course) if you are serving anying in coffee mugs.
civilised cups of tea and coffee and you cant go wrong.

Hell, that sounds nice, i want to be your first customer.
Annie


And i would definitly order a large chunk or coffee cake or coffee and walnut cake or chocolate sandwich cake or Victoria sponge, ooooooooooooh but dont go overboard on prices for cakes.

Sainsburys are about £1 a slice in the shop, they get 25 slices out of the cake - now that is definitly rip off.

Fruit_and_Nut_Case

Frenchgirl wrote: »

[...] proper cups and saucers [...]

YES YES YES I hate cardboard and styrofoam cups and happily pay a premium* to avoid them. Good luck with your project!


*Not true moneysaving mode.

real1314

Split your costs into categories:-

Fixed Costs - e.g Rent, Rates, Insurance, Wages, Electricity (not absolutely fixed, but likely to be near as dammit) etc.

Variable Costs - e.g Coffee, Water, Milk, Sugar, Breakages etc.

Once you've gathered all that stuff, you need to work out the variable costs per sale. Then estimate potential sales. Then divide your total fixed costs by the number of sales, and add that on.

That should give you a break even charge per sale. Add the profit you want.....

McKneff

Dont try to make a quick buck though and think yur customers are happy to pay thry the nose, they arent.

Coffee shop opened around here not so long since.

£2.75 for a coffee
£2.20 for a cup o' tea

Now I personally wouldnt pay £2.20 for a cup of tea.
Wont last long, they will be close by Christmas or soon after.

Sun parlour in a local park, you get a tray, 2 cups and saucers pot of tea for 2, pot of hot water, milk, sugar, lovely service
lovely look out £2.. Now if there is a profit in that then £2.20 x 2 £4.40 is a complete rip off.

You could also sell bags of the coffee you are selling in cups, or even bags of freshly gound coffee of the coffeee you are selling. (think of the smell in your coffee shop)

Somewhere in the middle is fine, good luck with your dream.

soolin

Depending on your town you might also want to checkout department stores etc as well as potential competitors. Whilst we have lots of Costa and Starbucks type shops we also have a BHS and M and S using proper cups and saucers and keeping their prices to around £1.50 ish a cup. If people can't afford that then we have two churches in town that run small coffee shops and keep their prices to less than a pound, again proper china and a tray of tea rather than plastic cups.

paulwf

As a very rough and ready guide in catering aim for your turnover to be split into 1/3 staffing costs, 1/3 cost of goods and 1/3 for everything else (inc a bit of profit). For example if you take £900 in a week expect £300 of that to go in wages, £300 to pay suppliers for ingredients and £300 towards rent, electric etc.

The first rule to making money in catering is to strictly control your cost of goods so that your gross profit margin is high enough...portion control and wastage control is key. Although coffee is high profit cake and crisps and canned drinks etc aren't so high so will bring your margin down.

The second rule is to control your staffing costs, every week have a rota and log your wage bill against takings. This is hugely important, catering is very labour intensive and wages will really eat into profits. If you are paying someone £6 p/h you need to be taking £18 or even £24 per hour for every staff member. Therefore you need to be ruthless, longer opening hours might bring in a bit more cash but unless it's 3x or 4x your extra wage spend it isn't really worth it.

Remember some food items incur VAT and some don't, think this through (perhaps with help from an accountant) as it can make a 20% difference (from Jan) to your projected figures.

Also remember how massively seasonal food and drink items are, you might sell a case of bottled water in a month in the winter and in a day in the summer, similarly coffee sales may be a tenth on a hot day of what you would sell on a cold day.