Coffee Shop costs breakdown
- Thread starter sscoffee
- Start date
John P
Active member
- Jan 5, 2007
- 1,057
- 4
sscoffee,
We're small. In fact, we are the smallest successful shop in the US. So much of what we do doesn't translate to the typical shop, however, it shows that it can be done on any scale.
Let's assume monthly revenue is $1.00
An average monthly expense for us would be:
.16 rent
.15 espresso/coffee/tea (Cost of green, and all other associated COGS)
.08 Food/pastries
.08 Business Loan Payment
.08 Taxes
.07 Utilities+phone,internet, and cell.
.05 Insurance (health & property)
.05 Owner's Draw
.03 Business Travel
.03 Misc
.02 Company Car Expenses
Total $0.80
Of course month to month this varies and how cash flow figures out in the picture is important as well. We also do upgrades and improvements each year, which may fall somewhere in misc.
Many will say rent is high, (Most would say to stay around 7-10%) and it is if other expenses are as high as your typical shop... but efficiency in store design, electrical, hours of operation, and product sourcing makes "rent" just another expense. At the end of the day, you have to look at your total revenue and your total expenses. If one is high enough and the other is low enough, that's a good thing.
We're small. In fact, we are the smallest successful shop in the US. So much of what we do doesn't translate to the typical shop, however, it shows that it can be done on any scale.
Let's assume monthly revenue is $1.00
An average monthly expense for us would be:
.16 rent
.15 espresso/coffee/tea (Cost of green, and all other associated COGS)
.08 Food/pastries
.08 Business Loan Payment
.08 Taxes
.07 Utilities+phone,internet, and cell.
.05 Insurance (health & property)
.05 Owner's Draw
.03 Business Travel
.03 Misc
.02 Company Car Expenses
Total $0.80
Of course month to month this varies and how cash flow figures out in the picture is important as well. We also do upgrades and improvements each year, which may fall somewhere in misc.
Many will say rent is high, (Most would say to stay around 7-10%) and it is if other expenses are as high as your typical shop... but efficiency in store design, electrical, hours of operation, and product sourcing makes "rent" just another expense. At the end of the day, you have to look at your total revenue and your total expenses. If one is high enough and the other is low enough, that's a good thing.
Mr Shave
New member
- Jan 24, 2011
- 238
- 0
John +1
SSC - The COGS can vary greatly based on the product mix. If one coffee shop only sells beverages they will have a higher contribution margin. On the other hand, if another coffee shop sells a mix of drinks, food, whole bean, and merchandise, their CM will be lower. In my eyes, the first example is missing opportunities to take care all of their customer's needs.
I ran a corporate coffee shop and our COGS averaged 34% (with a lot of wasted product)
Selling coffee alone is "worth it" from a business stand point if your contribution margin (sales - cogs) exceeds your fixed costs (rent, insurance, wages, etc).
I have a spreadsheet that I found a long time ago that helps break down cogs per drink if you are interested.
SSC - The COGS can vary greatly based on the product mix. If one coffee shop only sells beverages they will have a higher contribution margin. On the other hand, if another coffee shop sells a mix of drinks, food, whole bean, and merchandise, their CM will be lower. In my eyes, the first example is missing opportunities to take care all of their customer's needs.
I ran a corporate coffee shop and our COGS averaged 34% (with a lot of wasted product)
Selling coffee alone is "worth it" from a business stand point if your contribution margin (sales - cogs) exceeds your fixed costs (rent, insurance, wages, etc).
I have a spreadsheet that I found a long time ago that helps break down cogs per drink if you are interested.
tinninches
New member
- Mar 24, 2011
- 37
- 0
A tip of the hat to all of you entrepreneurs. Both of my parents were. I'm just not as brave and so willing to take the risk. Best of luck to all of you and of course, the OP.
Mr Shave
New member
- Jan 24, 2011
- 238
- 0
SScoffee
Take a look at this Coffee COGS Calculator | Mobile Adventure
Hope that helps answer some questions and create some new ones.
Enjoy!
Take a look at this Coffee COGS Calculator | Mobile Adventure
Hope that helps answer some questions and create some new ones.
Enjoy!
TonyDiCorpo
New member
- Apr 18, 2011
- 12
- 0
the proper people demographic in your targeted area should be 18-55, with an avg income of $40k/yr.
MrMarcusB
New member
- May 19, 2011
- 2
- 0
How do I run the program after downloading the .csv file? All I get is a bunch of text.
I don't have owner's draw nor car expense but labour costs.
This is mainly because if you are an old round guy, it tends to be less appealing than a young lean girl.
What about initial (capital) costs ?
1. leasehold improvements
2. furnishings
3. equipment
4. small wares
This is mainly because if you are an old round guy, it tends to be less appealing than a young lean girl.
What about initial (capital) costs ?
1. leasehold improvements
2. furnishings
3. equipment
4. small wares
