I need help with these questions

[kpc]

1. I figure that it is going to take around $7000 a month to operate a shop including labor if I work a lot myself. Is this a fair number?

2. There is a Starbucks in the grocery store in the same strip mall I want to open. Do you thinkthis will provide to much competion for me? Ithink that people are not going to want to park there car and go into the store for coffee, and I dont think people would come to my shop before getting groceries so it might be a wash.

3. What is your average total customers for the week? I know answers would vary greatly I am just curious about different places.

Thanks for all the help.

 

[janie1963]

$7000 seems a bit high, though that depends a lot on your rent. Star Bucks probably has a lease that gives them the exclusive right to sell, which won't allow anyone else to move in and sell coffee. There used to be a coffee cart outside our local WalMart until the McDonalds inside complained...McD's had exclusive vending rights.

As for competing with SBucks, we have one about 5 miles away (inside a grocey store) and they are moving into a large place where they'll have a huge sit down shop. We have a lot of SBucks' former customers; they get tired of the dark, bitter coffee and once they try something smooth and less acidic they realize what they've been missing.

Good luck to you

 

[Tartbird]

I don't think $7000 a month seems high. It depends on your rent, we pay about $3000 and then labor is another chunk, electric can run $700 to $1000 and none of these figures include product you're buying or workmans comp insurance, or regular insurance etc...


It may even be a low estimate, depending on your rent and labor.

Tartbird

 

[jpscoffee]

KPC,
There is no way to answer your question. Our expenses are more than $7000/month, but it is all relative to gross revenues. One is better to look at specific ratios concerning the specific expenses in relation to sales.

Average specialty coffee retailer income percentages (according to older SCAA study):
Average store sales $825-1600 per day
COGS 23-70% (depending on product mix)
Gross Profit 77-30%
Labor (including owner/manager) 26.5%
Rent 7%
Utilities 2%
Maintenance 1%
Advertising 2%
Insurance 1%
Outside Services .5%
Taxes .5%
Misc 4.5%
Equipment leases .4%
Depreciation 2.9%
Interest 1.5%

Net Profit or Loss 28%/(-19%)
Total 100%

Starbucks, Schmarbucks. Take 'em on at their own game, but make sure you do it right or they'll kick YOUR butt.

We average about 700 customers per day. On a really good day up to over 1000.

Hope that helps!