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Thread: Cafe - Financial Model

  1. #1
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    Cafe - Financial Model

    Gene Cafe Coffee Roaster $850 - Free Beans Free Freight
    Have any CSers ever come across or developed a financial model for a cafe that they would be happy to share?

    I have a friend thinking about setting up a cafe in the next 2-5 years. Having worked in finance, I suggested starting to develop a business plan and building a financial model. Therefore he can work out, start up costs, running costs, required backing, approx break even point, etc. All before taking any major risks!

    Id be happy to share any improvements/modifications to the model with any interested CSers.

    Ive read some of the other posts on starting up a cafe and think theres some really great advice. Get coffee experience (not just drinking), comprehensive business plan, mental preparation for inevitable challenges, etc.

    Cheers,

    meanbeanz

  2. #2
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    Re: Cafe - Financial Model

    Quote Originally Posted by 7E76727D7176727D69130 link=1237595550/0#0 date=1237595550
    Have any CSers ever come across or developed a financial model for a cafe that they would be happy to share?

    I have a friend thinking about setting up a cafe in the next 2-5 years. Having worked in finance, I suggested starting to develop a business plan and building a financial model. Therefore he can work out, start up costs, running costs, required backing, approx break even point, etc. All before taking any major risks!

    Id be happy to share any improvements/modifications to the model with any interested CSers.

    Ive read some of the other posts on starting up a cafe and think theres some really great advice. Get coffee experience (not just drinking), comprehensive business plan, mental preparation for inevitable challenges, etc.

    Cheers,

    meanbeanz
    Hi Meanbeanz,

    I have a very rough spreadsheet which will allow your buddy to run some projections.

    If youd like to drop me an email, you can have a copy...

    rgds

    2mcm

  3. #3
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    Re: Cafe - Financial Model

    Thank you 2mcm.


  4. #4
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    Re: Cafe - Financial Model

    Hi mb - get a very large bucket, put lots of holes in it and then pour all of your money into it and try and catch what is falling at the same time!

    Actually... Im in the process of opening my 3rd cafe in the last 6 years, feel free to pm me if you want any pointers

    One thing I will say is put together a comprehensive business plan, including breaking down costings to how many coffee and other sales you need to make per hour, and over the space of a day, at specified price points, in order to break even, and to run at a profit - then factor in down-time for the business, and average that out over a twelve month period, and see if the numbers still stack up

    Cheers,

    Pat

  5. #5
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    Re: Cafe - Financial Model

    Thanks for your words of advice!

    3rd in 6 years...well done. Im sure its getting easier!

    Please let me know when the #3 opens so as a fellow CSer I can support you.

    Cheers

  6. #6
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    Re: Cafe - Financial Model

    Hi 2mcm,

    Do you still have that rough costs doc? Id love to see it!

    Have to do at least one post before I cam PM you so here it is...

    Flossco

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    Re: Cafe - Financial Model

    Ill have a scrounge around and see if I can find it ;)

    2mcm

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    Re: Cafe - Financial Model

    Appreciate it! :)

    Flossco

  9. #9
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    Re: Cafe - Financial Model

    I have found this to be a valuable contribution to the discussion.

    http://www.yaffa.com.au/btob/pdf/fsn_june08.pdf

    I also have a copy of an Excel worksheet of business benchmarks for coffee lounges. *Shall try to find it.

  10. #10
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    Re: Cafe - Financial Model

    Hey Meanbeanz, 2mcm & Bluehouse,

    Im also building financials for a cafe business plan, and I gotta say the sub 4% profit margins are scaring me. Would love to get a copy of the spreadsheets mentioned above. Can anyone help?


    Meanbeanz: Great resource for posts from other cafe start ups (when you ignore some of the consultants selling their services...): http://www.flyingsolo.com.au/forums/...searchid=33073


  11. #11
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    Re: Cafe - Financial Model

    Hi all,

    I think mine has passed on with an old computer somewhere.

    If I can find it someday, Ill post here but tis not looking good... :(

    2mcm

  12. #12
    A_M
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    Re: Cafe - Financial Model

    I have a couple based on Café vans...

    I have looked a couple of times...

    But without having good backup available... I could not do it to my potential clients.....

    Excel and you can customise.. Let me know if ya want them

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    Re: Cafe - Financial Model

    Hi CSers, I am part of a syndicate @ Melboourne Uni. working on a "concept" cafe targeting students / young professionals and engaging migrants, where they can go and work on their laptops, network and study in a peaceful and relaxing environment (not a pub). And order decent coffee and food.

    I will really appreciate if any member of this braintrust can help / direct me on developing a detailed financial model or explain the key costs / projections involved in starting the venture; assumptions, break-even point, what capital to ask from Venture Capitalists, average takings per night, fixed and variable costs etc.??

    Many thanks

  14. #14
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    Re: Cafe - Financial Model

    Try working with this spreadsheet. You will be able to model your budget estimates against industry averages and by turnover groups. *These benchmarks are for 2008/09 and therefore out of date but should provide a guide.


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    Re: Cafe - Financial Model



    easy-essays-online .com/coffeesnobs/wedotheworkforyou ........?

  16. #16
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    Re: Cafe - Financial Model

    its a two step process;

    1. Develop budget.

    2. Double it.

  17. #17
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    Re: Cafe - Financial Model

    Quote Originally Posted by 6664687B7A68656C6C64090 link=1237595550/12#12 date=1290631147
    where they can go and work on their laptops, network and study in a peaceful and relaxing environment (not a pub). And order decent coffee and food.
    All businesses rely on turnover.

    What you dont want is customers sitting on one cup of coffee for several hours.

    What youre proposing seems to be more idealistic than good business.

    Unless the uni is supplying the space rent free for this "concept cafe", then I dont think it will be profitable.

    Even then, other costs, like wages, may still be its downfall.

    Turnover, turnover, turnover.

  18. #18
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    Re: Cafe - Financial Model

    Quote Originally Posted by 1925382329283F2A22294D0 link=1237595550/16#16 date=1290651290
    Quote Originally Posted by 6664687B7A68656C6C64090 link=1237595550/12#12 date=1290631147
    where they can go and work on their laptops, network and study in a peaceful and relaxing environment (not a pub). And order decent coffee and food.
    All businesses rely on turnover.

    What you dont want is customers sitting on one cup of coffee for several hours.

    What youre proposing seems to be more idealistic than good business.

    Unless the uni is supplying the space rent free for this "concept cafe", then I dont think it will be profitable.

    Even then, other costs, like wages, may still be its downfall.

    Turnover, turnover, turnover.
    Its a balance though. The majority of customers arent going to sit in there for half the day, with one coffee. If you make it nice, then people are more inclined to stay a while and the longer theyre there, the more likely they are to purchase seconds. Of course, there will be some people who sit there forever drinking a glass of free water, but such is life, think of it as them just adding to the ambiance of the place :)

    Same goes for offering free wifi - cafes in Australia have been extremely slow to cotton onto this idea. In my mind, there is no question that a certain segment of customers will actively search out a cafe with free wifi. Again, these people will sit for a while and thus are more likely to spend money on a second coffee, or a piece of cake while they work.

    Theres a gazillion cafes out there. I reckon you MUST differentiate yourself if youre going to grab market share.

  19. #19
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    Re: Cafe - Financial Model

    Hi everyone - I have been working on a financial model for my partner who is interested in opening up a small coffee - only stall (no food)

    Ive done some searching but havent been able to find anything that had sufficient detail so decided to build something myself, fortunately financial modelling is a large part of what I do for work.

    I have attached a copy so anyone who is interested can download and use. This is an early draft (2 hours work) and I plan on adding further to include depreciation, interest calculations, return on equity/assets, etc

    I would be really interested if anyone has any feedback or requests for additional functionality. Id be happy to update and make a new version available.

    Input cells are blue, current figures do not reflect reality!

    Hope this is useful to someone
    Ryan




  20. #20
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    Re: Cafe - Financial Model

    Hi Ryan - Ive also started building a model from scratch, as an investment banker Ive got some good hands here too.

    I like the look of yours, Im going to incorporate it into mine and re-post the final product. Mine will end up giving a pre and post-tax profit, as well as funding split, at the end of each month for a ten year (or so) period.

    Cheers,
    Julian

  21. #21
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    Re: Cafe - Financial Model

    Hi Meanbeanz,

    I have a very rough spreadsheet which will allow your buddy to run some projections.

    If youd like to drop me an email, you can have a copy...

    rgds

    2mcm


    Hi 2mcm,

    I realise this is an old thread but I would love to have a look at your spreadsheet if thats OK?
    I have done a few of my own but would appreciate someone elses in case Ive missed something.
    Thanks!

  22. #22
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    Re: Cafe - Financial Model

    Behmor Brazen - $249 - Free Freight
    Hello GWM,

    You need to insert the words of others into a quote lest it look like youre attempting to masquerede as them.

    Regret that was a long time ago. I no longer have the file handy.

    Chris (aka once was 2mcm)



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