How much revenue does a coffee shop in a busy airport terminal make in a day?
See this answer go from 50 to 90
Example answer
50/100
Airports are really busy and the prices are high, so I'd say something like $10,000 a day.
I'll say the shop is open 16 hours a day, since terminals are busy from early to late. It serves about 1,300 customers in that time.
I'll put the average spend at $10. So 1,300 times $10 is $13,000 a day.
What holds it back
"Something like $10,000 a day" comes before any reasoning. Then 1,300 customers appears with no explanation, and that's the number the whole answer rests on.
At a busy terminal there's a line most of the day, so I'll size this by how many people the shop can serve, not by how many want coffee. Revenue is customers served times average spend. I'll say the shop is open 16 hours a day, since terminals are busy from early to late. That's 5 in the morning to 9 at night. It serves about 1,300 customers in that time. Here's how I get there. With two registers each taking about a minute per customer, the shop can serve 120 people an hour flat out. It won't be full all day, so I'll say it averages 80 an hour. 16 times 80 is 1,280, which I'm calling 1,300. I'll put the average spend at $10. A coffee is $5 or $6 at airport prices, and about half of customers add a pastry or a sandwich. So 1,300 times $10 is $13,000 a day. I think that's a sensible figure.
At a busy terminal there's a line most of the day, so I'll size this by how many people the shop can serve, not by how many want coffee. Revenue is customers served times average spend. I'll say the shop is open 16 hours a day, since terminals are busy from early to late. That's 5 in the morning to 9 at night. It serves about 1,300 customers in that time. Here's how I get there. With two registers each taking about a minute per customer, the shop can serve 120 people an hour flat out. It only runs flat out at the peaks, which are the early morning wave and late afternoon. Say that's 6 hours at 120, which is 720. The other 10 hours I'll put at half speed, 60 an hour, which is 600. Together that's 1,320, so call it 1,300. I'll put the average spend at $10. A coffee is $5 or $6 at airport prices, and about half of customers add a pastry or a sandwich. So 1,300 times $10 is $13,000 a day. To check it from the demand side, a busy terminal might see 30,000 departing passengers a day. 1,300 customers is about 4% of them, which seems plausible when there are several other places to buy coffee. Over a year that's about $4.7 million. That's high for a coffee shop, but an airport is about the best location there is.
What the interviewer listens for
- Do you pick a sensible driver, such as serving capacity, and say why?
- Do you separate peak hours from quiet ones?
- Is the average spend reasoned, not assumed?
- Do you cross-check against passenger traffic or annual revenue?
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