Coffee Shop costs breakdown

sscoffee

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Mar 17, 2011
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Hello i'm a college student and aspiring coffee shop owner. I was wondering if any other coffee shop owners could give me a general break-down of their revenue. Im very curious to see what percentages go to what. Thanks!
 

John P

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Jan 5, 2007
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Salt Lake City
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.
 
OP
S

sscoffee

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Mar 17, 2011
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...

Thanks for the help thats def some great info. Would you say other shops run about the same for COGS? My big question is am I going to be able to make enough money selling coffee alone to make this worth it?
 

Mr Shave

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Jan 24, 2011
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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.
 

tinninches

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Mar 24, 2011
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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.
 
OP
S

sscoffee

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Spread sheet...

Yeah Mr. Shave, that would be great! Anything to help me get a grasp on cogs breakdown and profits.
 
OP
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sscoffee

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Great info!

Thats a great tool thanks! So far this has all been a great help... any other shop owner inputs would be greatly appreciated. Im trying to get a broad range of shop demographics... thanks!
 

Mr Shave

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Jan 24, 2011
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Did you email me as well?

You need to open the file in excel. If you don't have excel open it in google docs.

Let me know if you are still having issues.
 

wmark

New member
Nov 12, 2008
475
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Canada
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
 
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