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  • #16
    Re: Commercial machines

    Hello Michels,

    The value of a commercial esp machine differs depending on who is selling.

    A)
    If the vendor is a trader that either traded it in, or bought it for resale, he has to be able to make a profit dependent on what he paid, and what he spent repairing & servicing & cleaning to present well, plus a fair margin.

    B)
    On the other hand a machine being sold directly by its cafe owner can have far less value. The cafe owner can work it out by taking into account stuff like:

    How much money has it returned in turnover over the period in use, and how old therefore what advantage has the cafe owner gained by "writing down" its value every year.

    Example: A three year old machine that does an average of 10 kilos a week, with an estimated 90 cups per kilo actually sold for money (accounting for wastage & freebies to staff & friends etc) , $3.00 per cup, returns 3 x 90 = $270.00 per kilo = $2700.00 per week = a return of  $421,200 over the 3 years.

    If said cafe owner sticks it in the shed as a "spare", it sits there long terms, seals perish, leaks develop, pumps seize, pipes scale up, it collects dust and takes up space getting in the way.

    For what they return to the cafe owner, cafe owners should seriously consider turning their machines over every 2 years so they have the benefit of equipment in best possible condition, with less likelihood of breakdown, and even if they recouped only a thousand dollars for it after 2 years,  they are still streets ahead in the total scheme of their business.

    Of course they should try and get the best possible price for their old machine, but if it takes a long time to sell, with time wasted demonstrating, the equipment languishing in the way & deteriorating whilst unused, this is very inconvenient in the scheme of things and sometimes its better and cleaner to just act swiftly to get rid of the obsolete stuff at a price designed to offload quickly, and get it out of the way.

    Equipment sold directly by the cafe owner doesnt carry a guarantee, is often not in a very good state (reason for upgrading) , & with respect usually hasnt been cleaned up or presented well....just ripped out and left sitting out the back. These are all reasons why it is most convenient (for the cafe owner) to offload the equipment at a "convenient" price and have it gone. Kindly note this is not intended to offend, its just the way it is.

    Both secenarios are quite legitimate, and I dare say others can come up with even more scenarios.

    Hope this helps,
    FC.

    Comment


    • #17
      Re: Commercial machines

      Originally posted by Fresh_Coffee link=1194948739/15#15 date=1194991250


      If said cafe owner sticks it in the shed as a "spare", it sits there long terms, seals perish, leaks develop, pumps seize, pipes scale up, it collects dust and takes up space getting in the way.

      FC.
      I have to agree very strongly with FC on that point....

      When looking for a "pre-loved" commercial there were two main considerations....

      It had to be demonstrated, so I could see it had no major problems....
      If it was stored in the shed (makes it hard to demonstrate) but would definitely need a full overhaul before being put into service...... and things do deteriorate quite quickly in storage.

      Also many machines Ive looked at are fantastic on the outside.... (the cafe owners generally take pride in the appearance of the machine)..... but the innards were full of old coffee oils, coffee grounds etc and generally look pretty disgusting... and that will turn a lot of potential buyers off if they take the time to "lift the lid".

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      • #18
        Re: Commercial machines

        Originally posted by Fresh_Coffee link=1194948739/15#15 date=1194991250
        Hello Michels,

        Example: A three year old machine that does an average of 10 kilos a week, with an estimated 90 cups per kilo actually sold for money (accounting for wastage & freebies to staff & friends etc) , $3.00 per cup, returns 3 x 90 = $270.00 per kilo = $2700.00 per week = a return of  $421,200 over the 3 years.

        Hope this helps,
        FC.
        To counter with another "example" based on our experience.
        10kgs / week x 60 cups/kg (we dont underdose) x $3 = $1800 per week = $280K for 3 yrs
        Then we take out $100/mth for servicing  / caffetto  etc = $4K / 3yrs
        and then we have to buy that coffee & of course the milk & packaging => say $1/cup =>$95K
        and then the rent $40K x 3 yrs = $120K
        oh and each of the 10 staff we have want pay packets each week say 3K / wk = $468K / 3yrs (anyone know where to get slaves these days? :-))

        So doing only 10kg per week would COST ME around 687K for 3 years to produce  less the income of 280K => means I would PAY just over 407K / 3 years or around 135K per year for my customers to drink my coffee. Very generous of me.

        PS forgot incidentals like the 3K/mth elec bill, the franchaise fees, and the 2K I paid out this week to fix the fridge, oh and 28K of the 280K  goes to Johnny .... so next time someone says there is huge profit in a cup of coffee......give them a calculator!

        I should add, we dont do only 10KGs / week.  But I dont disagree with your basic thought that in the scheme of things a machine that cost 7-10K & lasts 2yrs has prob earned its keep (bit like a taxi does). But still need to consider that the 7-10K for machinery comes from & reduces any profit

        Comment


        • #19
          Re: Commercial machines

          My tech sells his 1 year old 2 groups for $1800, 18 month old $1200, older than 18 months and its yours for an offer. Unfortunately, its better kept at home or as a backup (running so it doesnt sieze).

          Comment


          • #20
            Re: Commercial machines

            hehe michelsblackwood - I know someone who owned a franchise and have heard its a tough gig. Didnt know you needed 10 staff assigned to the coffee machine though....WOW!

            I really admire your accountancy skills - the way youre able to assign the full cost of everything that is anywhere near the vicinity of the coffee machine is admirable!

            Sorry - couldnt resist the tease...all the best - wouldnt swap jobs with you!

            Oh and when I was a tradie...I found that equipment stored in the shed, stayed in the shed, and never saw the light of day.

            Comment


            • #21
              Re: Commercial machines

              Wow, 60 cups per kilo. You might want to stop pulling doubles. You can save money just by improving your yields. Coffee isnt your core seller, so you need to save as much as you can.

              Sadly, you are in a position where you have no ability to change much of anything (franchise), are forced to pay both franchise fees, and generally exorbitant rent (being in a shopping centre). Forget about tax, thats a given for any business. Incidentals are incidental (like your fridge) and shouldnt be taken into account since they are usually a one-off. Utilities, however are regularly occurring and are fine for the basis of calculating.

              As for offloading a used 2-group machine, you have to also look at your prospective buyer. Theyre generally going to be a smaller operation, or a home enthusiast. Any operation that does a higher volume of coffee will only be looking for a 3-group. Youre almost inclined to give the thing an internal refurbishment. Thats only if youre looking for a better price.

              Comment


              • #22
                Re: Commercial machines

                Originally posted by Dennis link=1194948739/15#19 date=1195001343
                hehe michelsblackwood - I  know someone who owned a franchise and have heard its a tough gig.  Didnt know you needed 10 staff assigned to the coffee machine though....WOW!

                I really admire your accountancy skills - the way youre able to assign the full cost of everything that is anywhere near the vicinity of the coffee machine is admirable!

                Sorry - couldnt resist the tease...all the best - wouldnt swap jobs with you!

                Oh and when I was a tradie...I found that equipment stored in the shed, stayed in the shed, and never saw the light of day.  

                I was quoting an "example" as was OP. However they forgot to inc expenses & made is sound like coffee was all profit, I was just trying to balance it up a bit, just in case some one saw me at a boat / ferrari shop or something.
                re my accountng (again as only an example) ..... 12 hr days x 7 days / week. we do actually have 10 part timers covering it. prob could use less "full timers (if they could be found) but they would cost more each ny how. You think $3K / 84hr week is to much to pay for baristers?
                Rent, well if we only sold coffee, (like other coffee shops do) then rent comes from coffee margin.
                Milk, cups & beans => coffee related.
                Machine maintenance => related.
                Franchaise fee, & machinery, & breakdowns I didnt include.....but have to be paid.

                So Im not sure what your refering to re extras I included in the calcs?. Seriously, I would like to know.

                re equip in shed, I know what you mean. But Tax office doesnt look kindly as writing off equip that is supposed to last 8yrs after only 2yrs...at least thats what accountant tells me.
                "in the shed" for me actually means all plumbed in so I can pour a brew while I veg next to the new pool, spa& sauna on my 6 days off: :-)

                Comment


                • #23
                  Re: Commercial machines

                  Originally posted by nunu link=1194948739/15#20 date=1195002189
                  Wow, 60 cups per kilo.  You might want to stop pulling doubles.  You can save money just by improving your yields.  Coffee isnt your core seller, so you need to save as much as you can.

                  Sadly, you are in a position where you have no ability to change much of anything (franchise), are forced to pay both franchise fees, and generally exorbitant rent (being in a shopping centre).  Forget about tax, thats a given for any business.  Incidentals are incidental (like your fridge) and shouldnt be taken into account since they are usually a one-off.  Utilities, however are regularly occurring and are fine for the basis of calculating.

                  As for offloading a used 2-group machine, you have to also look at your prospective buyer.  Theyre generally going to be a smaller operation, or a home enthusiast.  Any operation that does a higher volume of coffee will only be looking for a 3-group.  Youre almost inclined to give the thing an internal refurbishment.  Thats only if youre looking for a better price.
                  Some thoughts. 60-65 is the rate we work on, we extract the right amount depending on the cup size (per Insurators advise!). Our extractions are what give us great coffee (2nd best in coffee chains this year). Im not really looking to "save money" on a few beans. Sure I prob could stretch the beans further, but we wouldnt be enjoying our coffe growth figures for much longer :-)

                  Tax, my point was the 280K in my example is inc tax not ex tax. FWIW milk & beans are supplied ex tax....my coffee sales are counted inc tax...so Johnnys 10% is out of my pocket (cause I do the work). PS I still cant find THE REAL answer to the famous Q re birthday cakes.

                  Breakdowns like the fridge are not one - offs as you say. Maintenance / repair of equip is an ongoing thing & the bill seem to add up over a year.

                  The machine we have is 2yo & works great, very clean (inside & out) just not big enough ( a good problem!)

                  Dont get me wrong, this orig question was just trying to find out re selling 2grp machines to home users. Never meant to get into costs associated with running a business. Dont take examples as accounting facts, just indications. As I said OPs msg seemed to indicate it was all profit, Im just saying that is not 100% true. FWIW the franchaise thing works great & you get good beans, get to meet & learn from people like Iny & Zoe & ChrisS. But tthe franchsise thing got us into the Coffee Chain Challenge etc & we got to meet more faces outside of our brand, people like Tony@rio & Lino & lots I cant think of on the spot, but the coffee world if full of so many interesting people. We are still learning, trying our best, but still learning.
                  Got something to teach, we are all ears....:-)

                  Comment


                  • #24
                    Re: Commercial machines

                    Originally posted by MichelsBlackwood link=1194948739/15#22 date=1195005001
                    Some thoughts.  60-65 is the rate we work on, we extract the right amount depending on the cup size (per Insurators advise!). Our extractions are what give us great coffee (2nd best in coffee chains this year). Im not really  looking to "save money" on a few beans. Sure I prob could stretch the beans further,  but we wouldnt be enjoying our coffe growth figures for much longer :-)
                    Im getting off topic I think, but can you define the right amount?

                    Youre using 30g/double? Thats some serious updosing!

                    Comment


                    • #25
                      Re: Commercial machines

                      I think what you need to look at regarding coffees/kilo, is that they may use double shots for larger sizes.

                      Comment


                      • #26
                        Re: Commercial machines

                        And not all that coffee ends up in peoples cups. What about all the wasted coffee that ends up over the bench? Theres been a big pile of coffee grounds under the grinder in every cafe that Ive been to.

                        Plus coffee thats wasted dialing in the grinder, sink shots, any ground coffee thats left in the grinder at the end of the day, etc, etc.

                        Comment


                        • #27
                          Re: Commercial machines

                          Originally posted by Pioneer Roaster link=1194948739/15#24 date=1195016368
                          I think what you need to look at regarding coffees/kilo, is that they may use double shots for larger sizes.
                          Here we go on that learning curve thing again, my question is "Doesnt everyone?"
                          If not maybe thats why when I sample other brands they taste like coloured milk unless I order
                          strong & then it tastes ...errr....? Ive never had a bad coffee, but some I learn more from than others :-) I love this learning curve thing

                          To Ans OP q, 30mls single is the standard volume in a small T/A or dine in cup, 50mls in mug or reg t/A & 60mls in large 16oz T/A or big mug  
                          30mls via single handle (or we normally do it manually volume through dble handle if its quiet) but 50mls & 60mls always thru dbls handle.
                          The Azkoyen grinder is adjusted for grind & time & the machine for volumes. The time of grind is adjusted in 0.05 sec increments & corseness of grind, has almost as fine an adjustment. Most of the staff check the extraction times every few coffees, Some of us check every extraction time & tweak the grinder up or down a notch. Its amazing how much the moisture level / temp in the shop changes  over a couple of hrs & how it effects the extraction.  
                          On a good day a 50ml doppio shortblack has about 30-35mls of crema, but this does vary a bit. Michels seem to vary the amount of gas they pack the beans with. FWIW if you come in for a SB doppio, because the Azkoyen grinder pregrinds, we waste a grind so the SB is made with a fresh grind. & even I can taste the difference doing that. Like I said Were still learning, so many variables....& there is a limit to how many I can learning "samples" I can try in a day.:-) But we are in a different market to most people here. ie We are dealing with a "mass market" not an elite market. So we focus on ensuring all 10 baristas make the same cup (hopefully all heading toward perfect withing the range of variables we are trying to control), we dont want customers asking for a particular barista. Must admit some are better at rossetes etc than others but they are all working hard on it. But to understand what we are trying to do, imagine getting , your mother, brother, uncle, aunt and neighbour all to make coffee like you do.....how would you manage it? Like us you would have to control as many variables as possible & train for those you cant control. & then you have to educate the consumers to try before adding sugar (or at least try before asking for 3 sugars!), actually this is one of the measures we are using, how many customers we wean of sugar in a week :-0

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                          • #28
                            Re: Commercial machines

                            Originally posted by Bill link=1194948739/15#25 date=1195019379
                            And not all that coffee ends up in peoples cups. What about all the wasted coffee that ends up over the bench? Theres been a big pile of coffee grounds under the grinder in every cafe that Ive been to.

                            Plus coffee thats wasted dialing in the grinder, sink shots, any ground coffee thats left in the grinder at the end of the day, etc, etc.
                            Sure that all counts in how many cups/kg. eg We dump/waste 200-300 grms each night when we clean the grinder out.

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                            • #29
                              Re: Commercial machines

                              Nice to know Im not the only one judging by sugar intake.

                              Everyone at work that I make a coffee for has not taken their usual sugar.

                              Comment


                              • #30
                                Re: Commercial machines

                                yep good point TG and MB - I reckon if you get the espresso right in a milk drink in particular, most people are going to like it without sugar unless they are real sweetness junkies - I always had to have 1-2 sugars (say 3 cubes) pre- snobbery....now no way.

                                Cheers

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