How much would a small coffee shop owner actually earn?

[Whenismumhome]

Me and DH were discussing this.

We have no serious intentions of opening a coffee shop but we discussed it.

Say a small local coffee shop in a village/town that sells breakfasts, lunches, snacks and afternoon teas , how much money would the owner have left over for themselves to take home every month?

The average turnover is between £100,001 and £150,000, with 22% of all cafes and coffee shops achieving this.

5% of cafés and coffee shops have a turnover of up to £25,000 while 12% are making upwards of £250,001 every year

As for the rest, 8% make £25,0001 to £50,000, 18% are turning over £50,001 to £75,000, 12% are generating between £75,001 and £100,000, 14% have a turnover of between £150,001 and £200,000, and finally 4% are turning over between £200,001 and £250,000.

Got that from here. www.mybizdaq.com/blog/how-to-buy-a-cafe#:~:text=The%20average%20turnover%20is%20between,and%20coffee%20shops%20achieving%20this.

My friend had a coffee shop and she walked away with less per week than the waitress.

@FortunesFave

The average turnover is between £100,001 and £150,000, with 22% of all cafes and coffee shops achieving this.

5% of cafés and coffee shops have a turnover of up to £25,000 while 12% are making upwards of £250,001 every year

As for the rest, 8% make £25,0001 to £50,000, 18% are turning over £50,001 to £75,000, 12% are generating between £75,001 and £100,000, 14% have a turnover of between £150,001 and £200,000, and finally 4% are turning over between £200,001 and £250,000.

These figures are turnover not profit.

By the time you’ve paid staff, rent, rates, VAT, utilities, cleaning, ingredients, equipment, insurance, marketing, repairs, music licence, decor, accountant, etc etc etc very little of that is left to take as profit

I think coffee shops are an excellent business. I use to work in one. Location is key as there’s so many now competition is stiff.

www.rightbiz.co.uk/
There’s this website that sells small businesses in the U.K. Some include their annual turnover or profit. Might give you an idea of how much.

www.rightbiz.co.uk/buy_business/for_sale/267240_hampshire.html

This one has a net profit of £62,000
Most of them on the website don’t put their profit. They mostly say available upon request.

The little hot chocolate van in Winter wonderland in Hyde park, on average sold 700 hot chocolates in the 10 hours they were open..
One particular day, over a thousand

I know that doesnt help you, but found these figures amazing!

The hot chocolate is about £3 there tooo...

www.rightbiz.co.uk/buy_business/for_sale/233863_hampshire.html
This one makes £48,000

@HotToCold

Winter wonderland and those sort of places are a complete rip off. I’ve seen them sell things like waffles, pancakes and fruit skewers for nearly £10. I don’t know how anyone buys them!

Your average coffee shop in a village/small town? Owner will make about £12,000 to £15,000 a year, if the shop is pretty busy and having a decent year.
That hot chocolate van in Hyde Park will be paying around £1000 a day for the pitch fee inc electricity, pluss staff, insurance, equipment etc etc. You can make good money but profits are always a fraction of turnover. Plus the good days have to help even out the bad days.... a rainy day or a very hot day can see your turnover halve from one day to the next.

Its the average place of events like that tho
And that event goes on for over a month.
Imagine £3000 a day selling hot chocolate
@Alwaysultraprotect

#Average price

One of the most brutal small businesses out there. Be prepared to work 6-7 days a week and all public holidays, all year round and miss out on family life. Staff wages can simply be unaffordable on weekends and public holidays so the owners work. I guess some owners see their families though- a large number of coffee shops have their teenage children and parents working there too, as they can pay them less to try and stave off failure.

My DH is an insolvency practitioner and coffee shops, cafes, restaurants and quirky little gift shops are his bread and butter.

And while I am on my regular saving people from the horror of the coffee shop business rant, remember, most coffee shops can’t set their hours. This is set by the lessor who owns the shopping centre or shopping strip where the coffee shop is located. So you simply would never be allowed to put up a “Closed for Afternoon” sign to go to your child’s sports day. You would be fined severely by the lessor.

You have to cover the fixed and variable costs before you make any money yourself, so the key will be getting a good combination of low outgoings and a site with sufficient trade to be profitable.

The Hyde Park example above of 700 to 1000 drinks in 10 hours is an average of 70-100 an hour or 1 to 2 per minute, although some sales will be multiples but then you have to consider toilet breaks etc. That would be a full on working day, and those sorts of places usually only have one person working at a time.

In any business like this, trade will be variable and unpredictable and there will be many days where the owner earns nothing.

You have to cover rent, rates, staff, food and drink supplies, utilities, purchase and maintenance of an expensive coffee machine, VAT, banking costs and probably other costs I've forgotten. A lot of these will be fixed whether you serve one customer or one hundred.

I suspect many are making nmw at best, some not even that, although there might be the odd 'little goldmine' I suspect they might be in the majority.

There was an interesting insight into costs in a trip advisor owner response to a bad review by a customer who was charged for hot water in a cafe.

www.google.com/amp/s/www.independent.co.uk/news/uk/home-news/tripadvisor-manager-leaves-searing-response-rude-customer-who-left-bad-review-york-restaurant-a6811386.html%3famp

First you need to work out fixed overheads.
Say it's
£2000 rent and business rates a month .
£1000 wages for staff.
£500 utilities.

Plus some other bits so round it up too £4000.
Or a £1000 a week fixed overheads.
Or if you open the shop 5 days a week you need to take £200 to fixed cover costs... each day.

If your food is marked up at three times the Cost.
Your drinks are five times the cost...

If you take £500 a day..
£300 food...cost £100
£200 drinks. ....cost £40.
Plus overheads....£200.
Your profit is only £160 a day.

I know this would give £42000 profit a year, but plates get broken and things need fixing all the time.

To take £500 a day, say 100 customers each spending an average of £5, some will only have a drink, some will have cake and/or a meal too.

Cafe open for 7 hours, thats nearly 15 customers an hour, or one every 4 minutes.

You don't have to spend long in such an establishment to know that the customers per hour rate will be nowhere near that for much of the day.

Plus you have risks like your trade dropping significantly if McDonald's, Gregg's or a coffee chain opening up in the vicinity.

Most of Mumsnet will wax on about always picking the nice independent coffee shop, but a large section of the general public don't do this.

My friend had a coffee shop and she walked away with less per week than the waitress In some locations I can believe this sadly. Surely location and differentiation is everything here. How long is a piece of string?

@Serengetiqueen

My friend had a coffee shop and she walked away with less per week than the waitress In some locations I can believe this sadly. Surely location and differentiation is everything here. How long is a piece of string?

I reckon a full time waitress at a coffee shop would take home more than the owner 4 out of 5 times. And it is not a business that can grow- it is limited by floor space, foot traffic and room for coffee machines. So for most owners, it will never get to be a profitable, family-supporting business.

This is how people generally make money in a coffee shop, restaurant or bar. Set it up really well. Make it funky and edgy and cool. Make it ‘the place to be’. Get 6 months of good turnover figures and sell it for an inflated price to some poor mug who has “always dreamed of running a coffee shop”. Preferably a mug who doesn’t understand the difference between turnover and profit. The fickle market would have moved on the another establishment by then and the mug is left with a failing business. Original owner rinses and repeats elsewhere and makes a killing.

Its a brutal business. My mum used to work for a guy who was a very successful businessman, owning quite a few lucrative local businesses in the area. The coffee shop was the only one that failed.

It really depends, my friend used to run a coffee shop, it was always fairly busy, but after paying a fair wage to staff and using top quality ingredients and creating a wonderful cafe space she was often taking next to nothing home for herself. It wasn't sustainable. If she had done a more basic one and paid staff min wage probably would have been viable.

Re: the hot chocolate van at Hyde park, my brother once told me he’d got talking to a guy in the pub who had a food van and a pitch at Glastonbury (he’d had the pitch for years and they were impossible to come by now) and he said he can make £50,000-£60,000 over the course of the festival, him and 3 workers go down and work on rotation with a big mark up on the food. This was a few years ago now and, of course, completely anecdotal

Tax is favourable as a new business but a killer the second year of you have built the business well and hit the thresholds. I understand from friends who did it.

I can well believe that the small coffee vans make a lot of money, especially at the moment when everyone is meeting outdoors. I was at the park with DS on Sunday and we there for a few hours, there was a coffee van there and it was never without a queue of at least 8 people. Shops I would have thought not so much.