Projecting sales for a new shop? HELP.

[sovereignwealth]

Hello all. This is my FIRST post as a new member on this site. I am looking for the opinion of any shop owners out there how they feel about projecting sales for a new shop. $100k in first year? $50k? Did you base yours on shop size? Location? How did you project? And how do you feel about opening a shop in this tight consumer environment? ---Thanks much.
:coffee1:

 

[John P]

The honest answer is:

There are many metrics out there for guesstimating sales. All of them are wrong.

You need to have an understanding of your menu pricing, what will be your primary sellers, your ability to compete in the marketplace, and many other factors that are all specific to your store. There are too many dynamic factors involved to say anything beyond, "The true number is somewhere between $1 and $1,000,000. WHERE that number lies is really up to you."

 

[sovereignwealth]

Sure, understood....but how did you project YOUR sales? I saw your website. (nice by the way, looks like you have a nice operation.) How do others? Does higher traffic areas mean larger drip coffee sales? What if you wanted to have a siphon coffee bar for example? Not possible in a high traffic environment? Thanks again.

 

[John P]

For us, we were going to be doing things that didn't apply to any other shop in the area. Still doesn't. So while we had numbers that looked pretty for our business plan, it was all fictional. We visited places for a host of reasons to understand design (good and bad), need, product mix, and potential for filling a void that didn't exist.

Visit local shops off and on for a month. Go on different days. Go at different hours of the day. Count people. Count what they buy. Do they math based on each shop's menu prices. Extrapolate. Get an average.

Now that you understand the lay of the land, take a hopeful guess at how many customers you can get, allowing for 10 to 12 % increase per month. Run that for a year and you have a fairly good guess. Now multiply that number by about 30 to 40%, and you will have a number that's closer to reality.

Bottom line: Either you know you have the necessary skills to pull it off or not. In the end, numbers on paper are nothing more than numbers on paper. Projections meant little to me. They're good fodder for conversation. It's about the reality of what you do that first month, and how to continually increase sales throughout the year.

Siphon coffee (or any by the cup brewing method) is possible in any environment. The store sets the pace, not the number of customers or traffic, etc. Any good by the cup shop does not serve drip coffee. They are two completely different concepts. Either you want to try to please everyone and do a "numbers through the door" thing, or you want to create a niche at a higher average ticket, less need for high numbers. Apples and oranges.