A coffee chain is opening a new store. How many cups a day does it need to sell to break even?

One question first. Does break-even mean covering the store's monthly running costs, or also earning back what it cost to build? I'll assume running costs. The method is fixed costs divided by what each cup contributes. I'll start with the fixed costs for a month. I'll say rent is $8,000. Staff is the big one. Two people on the floor for 12 hours a day, 30 days a month, at $20 an hour is $14,400, which I'll round to $15,000. Utilities, insurance and everything else come to $4,000. That's $27,000 a month. Now each cup. I'll use an average price of $4.50. The coffee, milk, cup and card fee cost about $1.50, so each cup contributes $3. $27,000 divided by $3 is 9,000 cups a month. Over 30 days that's 300 cups a day. So the store needs to sell about 300 cups a day to break even. That sounds doable for a coffee shop.

One question first. Does break-even mean covering the store's monthly running costs, or also earning back what it cost to build? I'll do running costs first and add the build cost at the end. The method is fixed costs divided by what each cup contributes. I'll start with the fixed costs for a month. I'll say rent is $8,000. Staff is the big one. Two people on the floor for 12 hours a day, 30 days a month, at $20 an hour is $14,400, which I'll round to $15,000. Utilities, insurance and everything else come to $4,000. That's $27,000 a month. Now each cup. I'll use an average price of $4.50. The coffee, milk, cup and card fee cost about $1.50, so each cup contributes $3. $27,000 divided by $3 is 9,000 cups a month. Over 30 days that's 300 cups a day. Is 300 achievable? Across 12 hours it's 25 cups an hour, which sounds easy. But coffee sells mostly in the morning. If half the day's cups go between 7 and 10, that's 150 cups in three hours, or 50 an hour. Two baristas can make that many, so capacity is fine. What decides it is whether the site brings in that many people before work. Next to a station or an office block it should. On a quiet residential street it probably won't. Two adjustments. Food helps, because a pastry on some orders adds contribution with no extra rent. Going the other way, if the store cost $180,000 to build and they want that back in three years, that's another $5,000 a month, or about 56 more cups a day. So I'd tell the client 300 cups a day to cover running costs and about 356 to earn the investment back.