Are coffee shops actually viable?
Discussion
Afternoon all!
I was chatting to a friend last night about my own career change plans when she mentioned that she was considering opening a small coffee shop in the town (a small town, middle England, fairly posh area)
I was a bit skeptical about her figures so wanted to see if anyone here had any experience in this sector, is it at all profitable?
The details/numbers:
- It's a small place, just off the highstreet, rent is just £300 pm, could maybe seat 6x 4-person tables.
- As its so small business rates will be zero.
- Running costs unknown at this point, she doesn't want to pay for extra staff if possible, maybe one person for 3-4 hours a day, opening probably 5 days a week.
- There is one local cafe as competition, but its more of a greasy spoon than a coffee house.
Based on purely selling coffee, She estimates selling circa 40 cups a day (Breakfast and lunch service) at an aproximate profit of £2 per cup, maybe 20x cakes at lets say £1.50 profit each. Now by my maths that's an estimate of £110 gross a day before staffing and costs.
Are coffee shops in any way viable???? sounds like a massive investment for little return...
She looked a bit worried after we'd gone through the numbers.
I was chatting to a friend last night about my own career change plans when she mentioned that she was considering opening a small coffee shop in the town (a small town, middle England, fairly posh area)
I was a bit skeptical about her figures so wanted to see if anyone here had any experience in this sector, is it at all profitable?
The details/numbers:
- It's a small place, just off the highstreet, rent is just £300 pm, could maybe seat 6x 4-person tables.
- As its so small business rates will be zero.
- Running costs unknown at this point, she doesn't want to pay for extra staff if possible, maybe one person for 3-4 hours a day, opening probably 5 days a week.
- There is one local cafe as competition, but its more of a greasy spoon than a coffee house.
Based on purely selling coffee, She estimates selling circa 40 cups a day (Breakfast and lunch service) at an aproximate profit of £2 per cup, maybe 20x cakes at lets say £1.50 profit each. Now by my maths that's an estimate of £110 gross a day before staffing and costs.
Are coffee shops in any way viable???? sounds like a massive investment for little return...
She looked a bit worried after we'd gone through the numbers.
Bare in mind guys she's only in the very early stages of said "considering", like she saw the premises was available last week and hasn't viewed it yet.
I don't know where the 40-a-day figure came from, again probably a wild guess.
This isn't central London, not even central city, this is a small town (Melbourne Derbyshire to be specific) so you can't expect a queue out of the door every morning and evening.
I've said that what she really needs to do is find a similar shop (well several), go in, sit in the corner drinking coffee and watch, count, take down prices. Then really think through the numbers: How long will that £2000 coffee machine take to pay for itself? how much will maintenance cost? How much will fit-out cost.... etc etc etc
As I said... very early stages - We've all been there, get all excited then figure out it's not viable.
I don't know where the 40-a-day figure came from, again probably a wild guess.
This isn't central London, not even central city, this is a small town (Melbourne Derbyshire to be specific) so you can't expect a queue out of the door every morning and evening.
I've said that what she really needs to do is find a similar shop (well several), go in, sit in the corner drinking coffee and watch, count, take down prices. Then really think through the numbers: How long will that £2000 coffee machine take to pay for itself? how much will maintenance cost? How much will fit-out cost.... etc etc etc
As I said... very early stages - We've all been there, get all excited then figure out it's not viable.
snuffy said:
Mandarin VX said:
Based on purely selling coffee, She estimates selling circa 40 cups a day (Breakfast and lunch service) at an aproximate profit of £2 per cup, maybe 20x cakes at lets say £1.50 profit each. Now by my maths that's an estimate of £110 gross a day before staffing and costs.
Have you not just included costs twice there ? You say the profit is £2 a cup/£1.50 a cake. You have said "profit", i.e. after costs. But then you say still need to account for staffing and costs. So you have included costs twice.From that gross profit I then deduct running costs (fixed costs) to get to net.
I know what I mean anyway!!!
Evening all!
So we've been progressing the idea, working through the numbers.
As stated previously the 40-a-day figure is realistic for a small independent cafe, as depressing as that sounds, it may well be the truth, lets call it a baseline.
This location isn't on a busy highstreet, its off the main drag so visitors will need to intentionally aim for it, which is fine once established as a "destination" rather than "lets nip into this generic big brand shop for an overpriced coffee" on the way past.
Its strong points are that it's in a quiet area, family/kids friendly, has an actual garden with grass and a tree, so in summer would be 10x more attractive to a lot of people that really want to sit down and enjoy a coffee than the soul-less generic costabucks. Its just getting them in, and getting established regulars.
Going back to the rent etc, it turns out the ad was wrong.... sigh, its £560 a month but its worth it we think, its just a matter of making the business pay for it.
We've estimated fit-out at circa £6k with some savings from used equipment initially.
we're viewing it this weekend.
I seem to have been sucked into this don't I...!!!!!!!!!
As for turover, of course it cant only be based on coffee sales, so we need to figure out a menu and other drinks, and other added value things to do.
Lots of interest from local arts groups too, but they may be the types to fill the place for 4 hours and only buy 1 drink/cake each....
So we've been progressing the idea, working through the numbers.
As stated previously the 40-a-day figure is realistic for a small independent cafe, as depressing as that sounds, it may well be the truth, lets call it a baseline.
This location isn't on a busy highstreet, its off the main drag so visitors will need to intentionally aim for it, which is fine once established as a "destination" rather than "lets nip into this generic big brand shop for an overpriced coffee" on the way past.
Its strong points are that it's in a quiet area, family/kids friendly, has an actual garden with grass and a tree, so in summer would be 10x more attractive to a lot of people that really want to sit down and enjoy a coffee than the soul-less generic costabucks. Its just getting them in, and getting established regulars.
Going back to the rent etc, it turns out the ad was wrong.... sigh, its £560 a month but its worth it we think, its just a matter of making the business pay for it.
We've estimated fit-out at circa £6k with some savings from used equipment initially.
we're viewing it this weekend.
I seem to have been sucked into this don't I...!!!!!!!!!
As for turover, of course it cant only be based on coffee sales, so we need to figure out a menu and other drinks, and other added value things to do.
Lots of interest from local arts groups too, but they may be the types to fill the place for 4 hours and only buy 1 drink/cake each....
Sambucket said:
You won't make much money but don't let that put you off if its the life you want.
Have you considered a trial shift in a similar cafe to get the gist of the day to day? In best case scenario, you will be doing every job more often you might expect. Staff get ill etc.
Its not me, I'm just the friend in this, were viewing the place on saturday, so will be discussing options/ideas etcHave you considered a trial shift in a similar cafe to get the gist of the day to day? In best case scenario, you will be doing every job more often you might expect. Staff get ill etc.
citizensm1th said:
you need a usp, how about a kids play area outside in the summer and a kids drawing/art area inside for the winter?
other than that you need to do the best cakes in the area something to tempt the yummy mommies to go out of the way to get to you
Not really enough space for either of those, but yes, needs a USP, and I think that might be it's location/quietness (which kids will quickly destroy but hey..!)other than that you need to do the best cakes in the area something to tempt the yummy mommies to go out of the way to get to you
yes, cakes, scones, toasties, "cream teas" all that shebang...
oddball1313 said:
Have a decent and creative kids menu rather than the usual run of the mill junk most places do, will definitely help pull punters in.
The problem there is that at what point do you just call it a cafe? I would say a "Coffee shop" was more about the sitting/chatting/coffee/snack than the full dining experience... Gassing Station | Business | Top of Page | What's New | My Stuff