Cafe Profitability Calculator: Your Tool To Success
As passionate café owners, we understand the importance of using top-quality ingredients in our coffee beverages and their impact on profitability. However, while we devote such considerable energy to crafting the perfect brew, it’s often easy to overlook other crucial aspects of our business, such as costs and pricing structures-an oversight which which can have significant impact on our business’ success.
At Zest, we value ourselves as more than just a coffee roaster; our broader mission is to support and grow alongside our café partners. We believe that your success is essential to ours. To assist in this endeavour, we created a free, user-friendly Cafe Profitability Calculator. A simple tool to help café owners and managers effortlessly establish their COGS (cost of goods sold), their gross margin, and their retail price for coffee beverages.
First introduced in May 2023, our Cafe Profitability Calculator quickly became our most downloaded online resource, with over 1000 downloads to date. Recognising its importance to the industry, we’ve spent the past few weeks revisiting this tool and adding a bit more depth, and are now preparing to launch it once again with added enhancements.
How does it work?
The calculator is very simple and doesn’t require you to do any of the calculations yourself. You simply input all your direct costs associated with making a coffee beverage and the calculator will do the rest. It accounts for various factors including milk types, dose size, labour costs, etc… providing a detailed breakdown of your costs, COGS, and gross profit, among other vital statistics.
It also offers automated recommendations for adjusting COGS or prices to achieve your margin goals. The labour analysis component further allows you to assess staff productivity and how wages are distributed among different coffee offerings.
Additionally, the calculator offers the option to examine each product individually, giving insight into the specific cost breakdown of each ingredient and component. This feature enables you to determine if your purchase costs are too high or your selling prices too low, allowing for strategic adjustments.
Key things to consider
While aiming for cost reduction, it’s critical not to compromise on quality. You’re better off charging a little more for better margins than to opt for a lower quality product. Reducing the quality of your products can lead to a reduced sales volumes, which is a challenging trend to come back from.
While it’s nice to simply let business tick along, we highly recommend not becoming static. Why? Because the the world of business is not static. The cost of ingredients, outgoings, and overheads is constantly changing, as should our prices. We recommend revisiting the Cafe Profitability Calculator at least quarterly for optimum cafe profitability.
How do I download it?
We’ve made our Cafe Profitability Calculator completely free to download and use. Simply tap the below link, fill in the form, and we’ll send it direct to your email!
Tap this link to get your Calculator.