Numbers check... new shop

[ryanonthebeach]

I'm reopening a coffee shop that did well for 15 years but closed due to mismanagement (unpaid taxes).
It seems pretty viable but wanted to check my numbers for break even analysis to start building a business plan.
You experience and thoughts would be appreciated
The store has much seating space (40) and patio people do lounge & did buy many food items, pastries, breakfast and lunch.

Please tell me if you think these projections are off

Food: 30% of revenue, average ticket 7 average gross profit $4.2
Drinks: 70% of revenue, average ticket 2.13 average gross profit $1.39

Break even is around 7/8 tickets per hour (does that sound close to reality?)
That's

Fixed costs: $7,700 per month
[TABLE="width: 153"]
[TR]
[TD]Rent[/TD]
[TD="align: right"]1,300[/TD]
[/TR]
[TR]
[TD]Equip lease[/TD]
[TD="align: right"]580[/TD]
[/TR]
[TR]
[TD]Water[/TD]
[TD="align: right"]100[/TD]
[/TR]
[TR]
[TD]Elec[/TD]
[TD="align: right"]300
[/TD]
[/TR]
[TR]
[TD]Internet[/TD]
[TD="align: right"]200[/TD]
[/TR]
[TR]
[TD]Labor[/TD]
[TD="align: right"]4,214[/TD]
[/TR]
[TR]
[TD]Cleaning[/TD]
[TD="align: right"]607[/TD]
[/TR]
[TR]
[TD]Maint/Repair
[/TD]
[TD="align: right"]200[/TD]
[/TR]
[TR]
[TD]Other
[/TD]
[TD="align: right"]200[/TD]
[/TR]
[/TABLE]

 

[eldub]

Why didn't the previous owners pay their taxes?

 

[CoffeeJunky]

Electricity seems very low. Also I would put others at around 1,000. I don't know how much of equipment you are leasing but your repair will cost more then 200 per visit. If something like compressor goes,it would be in thousands. Also internet cost seems to be really high and also how many people are you employing? How about advertizing, Insurance, donations, yearly inspections(fire, health dep. and etc...) and credit card processing fee. I can't think of anything else. Please add if someone can think of anything more.

 

[namballe]

also need to state your operating hours to do the math more precisely.

 

[ryanonthebeach]

also need to state your operating hours to do the math more precisely.

Hours will vary, it's very seasonal and I'll be working some of those.
On average will want to hire someone 14 hours per day x 5 days per week

6 am to 8pm in the summer

 

[ryanonthebeach]

Why didn't the previous owners pay their taxes?

The spouse was doing the books... he also had a taste for flashy cars and vacations.. they are no longer together.

 

[ryanonthebeach]

Electricity seems very low. Also I would put others at around 1,000. I don't know how much of equipment you are leasing but your repair will cost more then 200 per visit. If something like compressor goes,it would be in thousands. Also internet cost seems to be really high and also how many people are you employing? How about advertizing, Insurance, donations, yearly inspections(fire, health dep. and etc...) and credit card processing fee. I can't think of anything else. Please add if someone can think of anything more.

The $200 for repair/maint is averaged monthly
$1000 for electricity a month?
What are your monthly averages for Insurance, inspections, cc processing?

 

[eldub]

Also add pest control.

 

[CoffeeJunky]

1000 is possible repair cost. Always good to save up few dollars and for the rainy day.
Insurance is about 500-800 and works comp also need to be there. Credit card processing could be up to about 2.5 percent of sales. It really depends on your average sales volume.
Your payroll taxes, and lastly you legal service cost. CPA, Attorney, etc... Yeah Pest control.

 

[icetzou]

Put cleaning into labor, there's no reason why your baristas can't also clean.

 

[PoetGrant]

Don't forget advertising. A lot of that can be free or fairly cheap. I like Google AdWords and AdSense because they don't charge unless someone has clicked your ad.

 

[John P]

Rent is reasonable.

Lease equipment??? Not a good move. If the previous owner did not know how to manage their business successfully and can pretty much guarantee they did not know how to choose proper equipment. Return whatever it is and buy proper equipment and be responsible for maintaining it. You will invest much more thought into it that way, and you will likely end up with something better. .. And don't skimp. Grinder, espresso machine, etc. not a place to cut corners.

Electricity seems very low. I'd probably double that.

Internet is way too high, unless that includes phone as well.

CoffeeJunky and Icetzou are spot on with their comments.

And what's with this $2.13 avg drink ticket? Are you running a gas station? The time for anything even remotely below $2.50 per cup is long gone. If you are anywhere near those numbers, it will be impossible to survive. Raise the quality of your product, training, and customer service. Charge accordingly.

 

[CoffeeJunky]

You know what bugs me?
Someone comes to the forum and asks serious questions and never comes back to check for the advise.

Hate when people do that.

 

[PinkRose]

I can certainly see why it bugs you.

Let's hope that he (or she) went online and looked at all of the responses without logging into the Forum. The last visit was a couple of weeks ago, when this thread was started.

I'm sure eventually other people will gain some benefit from all of the advice and answers to his (or her) questions.

You know what bugs me?
Someone comes to the forum and asks serious questions and never comes back to check for the advise.

Hate when people do that.

 

[coffeeshoptheologian]

Well, for the record, I am really grateful for those of y'all (am from E TN) who clearly troll (I mean this positively, like fishing and not à la the current negative sense) just about every thread and share your wisdom, regardless of someone else not returning to hear the advice. I'm part of a Board of a 501(c)(3) that is opening a shop in about 3 weeks and what I read (albeit not enough) has been really helpful.