Projected Sales Question

Mar 15, 2007
2
0
Hello all!
I am in the process of evaluating whether or not it would be profitable to open a coffee shop. I am attempting to estimate average daily sales, and from what I've seen on this site, a good estimate is $3.50 per customer visit. My question is whether or not this average includes sales tax. In my area sales tax is 9% and I'm wondering if I can tack this on to the $3.50 or if this estimate already factors in the tax. Any input on this would be much appreciated :p
Thanks so much,
Lola
 
Hi Lola,

I too am opening a coffee business, a cart. I can tell you what I am doing.

I am in the inital stages of preparing my financials and I am not including sales tax, that is a separate accounts payable that is covered by the customer. When figuring an average ticket price you don't need sales tax included because the customer pays that, not you. All of my figures do not include sales tax. The average ticket price is the foundation for every thing you will compute in your financial section. It is used for sales forecasting (which your initial financials will depend on.)

Are you working yet with a Small Business Development Center? They have lots of information on this and many of the other questions that you will have and they are FREE!! They are usually located on a local college campus. Good Luck!
 

ElPugDiablo

New member
Jul 16, 2004
991
0
Hartford and New Haven, CT
lmcginty2000@yahoo.com said:
Hello all!
I am in the process of evaluating whether or not it would be profitable to open a coffee shop. I am attempting to estimate average daily sales, and from what I've seen on this site, a good estimate is $3.50 per customer visit. My question is whether or not this average includes sales tax. In my area sales tax is 9% and I'm wondering if I can tack this on to the $3.50 or if this estimate already factors in the tax. Any input on this would be much appreciated :p
Thanks so much,
Lola
It depends on your menu, your pricing and your focus. Your best bet is to find a shop with a similar concept as your future shop, and see what are they getting.
 

cafemakers

New member
Nov 3, 2004
576
0
lmcginty2000@yahoo.com said:
My question is whether or not this average includes sales tax. In my area sales tax is 9% and I'm wondering if I can tack this on to the $3.50 or if this estimate already factors in the tax.

Sales tax is normally a pass-through; it will not affect your per-ticket average or projections unless you wish to absorb the cost of that tax in your pricing. Some will factor this cost into their pricing (as a convenience to customers); most tack it on.

You should check with your local tax authority to confirm how taxes are collected in your area; location, business model and projected volume of sales can change how it must be recorded and (sometimes, like in the case of California) if it must be withheld at all.

Additionally, at 9%, I'm guessing that you are in or near a major city; you should check to see if that $3.50 per ticket average is still appropriate - it may be higher for your market.
 
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