Projecting revenue for business plan

[lisalisa]

Hi! I am new to the forums. My husband and I are putting together a business plan, and are having trouble projecting revenue for it. We live in a small town-about 7,000-but it is GROWING. The location (which we are going to buy/an old house on the historical register) is a great location-on the main street in town. Traffic count is 7600. No real coffee shops in town. ours will be a small bakery as well. Community high school is one block away and has about 2500 kids. How do I go about projecting revenue? Any help would be appreciated!!!!! Thanks, Lisa

 

[davidwhatley]

.5

Use .5% of the traffic count so that means 38 cars will stop. I would use 1.5 customers per car so that means 57 sales and I use 3.25 per sale.
$188.50 in sales per your traffic count. What to expect from teh school? Pick a number, I would say less than .5% of the school kids, unless yhey are across the street.

 

[ElPugDiablo]

Is the traffic count car or foot? Is it easy for car to turn into your shop? What about parking? Is the small town spread out rural area? or relatively dense. 7K is a bit on the low side. High School across the street will help if you design the place to be their hang out place, but you might lose some adult business, plus some kids come in for water so you end up losing a cup. Also, what will you do during Summer vacation? Lastly how do food places in your town do? Are they prospering or struggling?

 

[businessplan]

There are two main methods to project revenue for your retail store when creating financial projections for your business plan: a top-down approach and a bottom-up approach. It is advised to use both methods to make sure that your projections are reasonable to readers.

 

[John P]

In my professional opinion, if you are looking for a viable business, I would look to relocate. We are small, but I wouldn't advise doing anything with less than 15K. Counting on high school kids as your base will create headaches. If you create a shop that appeals to kids, you will ONLY attract kids. So if you can eliminate them from the equation and see them as a bonus, then "maybe". Honestly, I think the investment may be far greater than the return.

Proceed with caution.

 

[JJohnson0731]

lisalisa,

Welcome to the forum. I am also interested in the coffee business and am curious as to what your business entails. I wish you the best of luck.

 

[wmark]

Having gone through this recently.

7,600 is tremendous traffic BUT

1 What is the pedestrian traffic ?
2 Normally (in the city) your primary business is from a 3 block radius
3 What is the parking like for any cars that want to stop ?
4 What is the speed of that traffic ? Fast traffic is less likely to stop
5 How much product do you need to sell every day that you are open to break even ?
Is that realistic ?
6 How much product do you need to sell every day to make a living ?

 

[usstommy]

Get the demographics for your location. 1 mile radius is sufficient. This is your target area. ~54% of the population drink coffee and ~19% drink gourmet coffee. Using the population within your target area, crunch the numbers. This is your target market. A realistic number is 30% of this number. This is your goal. Base your calculations on this number. If you're lucky, you'll get more than this but don't count on it. Always err on the low side and be happy if your numbers exceed that. If you can make a profit in a worst case senerio, you'll be fine, if not seriously consider not entering into the venture.