How Many Cups Do I Sell To Make A Profit

redned_2

ok. So first you need to work out how much your coffee costs you (rough guide 20-30p a cup) and what you will sell it for. You also need to do this with anything you plan to sell. Then what you plan to sell it for. Which depends a lot on your location and who you think you're customers will be. Then you can work out how much you're making per cup. Then you need to work out how many you will sell. Thats the hard part! You need to work out footfall, ie. how many potential customers walk past (sit outside for a day and count) and how many you think will buy. This will likely be more at weekends.

Once you work this out you then need to allow for all your other overheads, staff, rent, rates etc. I reccomend the book "wake up and smell the profit" by the coffee boys this is a fantastic book for any business, but is aimed at coffee shops.

redned_2

paulwf wrote: »

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.

Sorry should have read this first:o:) agree 100% - good points!

Frenchgirl

You are all amazing! Thank you soooooooooooo much for replying and giving me answers. I now know where to start. Keep the good advice coming.x

paulwf

Frenchgirl wrote: »

You are all amazing! Thank you soooooooooooo much for replying and giving me answers. I now know where to start. Keep the good advice coming.x

Never underestimate how much the average customer is swayed by the branding, advertising and marketing that the big boys use. Costa opened a big coffee shop in town and it was instantly packed. As they are expensive the students get their takeaway coffee from McDonalds, between them they have the market sewn up. Every other shop in town has to put a lot of effort in to sell coffee and that's without a Nero or Starbucks.

My advice would be to try and do something a bit different, a unique selling point if you want to use marketing jargon. Costa etc are very good at providing the middle of the road sanitised coffee shop experience, if you go down the same route with brown tables and chairs, jazz music in the background, free wifi and newspapers they'll beat you.

COOLTRIKERCHICK

thinking about paulwf has said in his above post... your coffee shop, unless you are going to try and appeal to a certain type of customer..( ladies that lunch etc) then you have to be VERY clever in the design and decor of the shop... as you might alienate a certain age group etc...which could have been your biggest customer...

vintage_beanpole

I'm sorry, but this is all ridiculous. Talking about shop design before talking about the hard figures is the wrong way round. By all means have a basic concept, but it's very likely that once you have a cursory look at your projected overheads it may well be a non-starter.

First things first - is there a reason why your area doesn't have a cups n' saucers cafe already? It's not exactly a novel idea; if you look about Covent Garden for example there are quite a few. There aren't any in the East End and there's a reason for this. This is just London, but you still have to ask - is the demand there in that area? What are the population like?

What are the rates and the rent like? Paulwf has neglected this point - this is going to be one of if not your biggest cost. Coffee is unbelievably cheap to buy in bulk. Around 2p to make a cup (although this is the cost spent per cup by a chain - which obviously would negotiate a lower price than you would be able to).

The problem is, that the kind of area which would have the customer base for a sweet cups and saucers cafe (a bit higher end) is going to have higher rents and rates.

That's why larger chains are thriving in particular in these types of area (Paul, Patisserie Valerie etc) because they have the favourable initial credit facilities, cheap (because they mass-purchase) and ready-to-assemble shop fittings and produce, and because as they have other cafes making profits they can afford to take a punt. Independent coffee shops are much more common in less up-market areas, and as they have very tight profit margins and low pricing they don't have the expenditure (nor indeed the client base) for nice cups, saucers and twee furnishings.

There's a reason why these places are closing down and why they perhaps didn't already exist in your area.

Saying that, if you've found an appropriate area with low rates, rents etc... then you need to do a proper business plan, not just a guess at how many cups of coffee you need to sell. Without the business plan you can't get a quote on the cost of credit, so you won't know how much the venture will cost (assuming of course that you will borrow to start off - if you're self-funding there are other issues).

Savvy_Sue

I don't know if I've asked this question of you - it's one I do raise from time to time.

Do you have ANY experience in this field?

If not, honestly I think the best thing you could would be to go and get a job in a coffee shop. doesn't have to be one like the kind you want, might even be better if it wasn't, one of the chains would do fine.

show up, act keen, and learn absolutely everything you can about food hygiene, portion control, budgeting, waiting at table, customer service, managing staff and organising the rota.

if, after 3 months, you still want to do this, you will at least have half an idea of what's involved.

paulwf

vintage_beanpole wrote: »

The problem is, that the kind of area which would have the customer base for a sweet cups and saucers cafe (a bit higher end) is going to have higher rents and rates.

That reminds me...a traditional sit down cafe means you will be limited by the number of seats you have. My local Costa charges £2.05 for a medium black coffee - expensive for a takeaway coffee but ridiculously cheap if you are in effect buying half an hour of free heat, newspapers, wifi and a comfy chair.

If you can only seat 30 people who all stay 20 mins (90 covers an hours) and you need 100 covers an hour to break even it isn't viable unless you do takeaway. A lot of tables with 4 chairs may only be filled by 1 or 2 customers so halve your maximum capacity to get a meaningful number of covers.