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Worked example: a coffee shop business plan
Three things to sell, fourteen costs to pay, and a bank balance that dips before it climbs.
The business
A single coffee shop, one year, starting from an empty spreadsheet. It sells three things, pays fourteen kinds of bill, and makes about EUR 24,359 of operating profit on EUR 334,595 of sales. That is 7.3%, which is an ordinary result for a café and a long way from the margin most people assume when they open one.
Step 1 — what it sells
Three products, each with a price, a unit cost and a volume for every month. This is the PxQ table, and everything else in the plan is downstream of it.
| Product | Price | Unit cost | Units, year | Revenue | Gross profit | Margin |
|---|---|---|---|---|---|---|
| Coffee, per cup | 3.20 | 0.85 | 66,700 | 213,440 | 156,745 | 73.4% |
| Food, per item | 4.50 | 1.90 | 23,950 | 107,775 | 62,270 | 57.8% |
| Beans, per bag | 12.00 | 7.00 | 1,115 | 13,380 | 5,575 | 41.7% |
| Total | 91,765 | 334,595 | 224,590 | 67.1% |
Look at the total margin. The three products earn 73.4%, 57.8%, 41.7%. The simple average of those is 57.6%, but the shop's real gross margin is 67.1%. Coffee is 63.8% of the money and it pulls the blend up. A margin is always total gross profit over total revenue, never an average of margins — see the PxQ guide.
Step 2 — the volumes are not flat
Twelve identical months would be a much easier plan to write and a much worse one. Sales here climb from opening, dip through the summer, and peak in the run to December.
Step 3 — what it costs to run
Fourteen overhead lines, biggest first. These go on the SG&A page, month by month.
| Overhead | Year | Share |
|---|---|---|
| Salaries, wages and other benefits | 122,400 | 61.1% |
| Rent | 34,800 | 17.4% |
| Utilities (water, electricity, gas) | 6,710 | 3.4% |
| Bank fees and commissions | 6,021 | 3.0% |
| Severance pay provisions | 5,400 | 2.7% |
| Depreciation | 5,040 | 2.5% |
| Office expenses (stationery, cleaning, meals, tea-coffee) | 4,080 | 2.0% |
| Advertising (marcom) | 3,600 | 1.8% |
| Fixtures and office repair and maintenance | 3,000 | 1.5% |
| Taxes, funds, customs and penalties | 2,520 | 1.3% |
| Transport and freight | 2,160 | 1.1% |
| IT and communication (ERP/CRM, phone, internet) | 1,740 | 0.9% |
| Insurance (excl. social security and staff insurance) | 1,560 | 0.8% |
| Training and personal development (HR) | 1,200 | 0.6% |
| Total overheads | 200,231 | 100.0% |
People and rent are the business. Wages and the severance provision come to 127,800, which is 38.2% of revenue. Add rent at 10.4% and over half of every euro through the till is spoken for before a single bean is bought. That is why a café lives or dies on the lease and the rota, and why the SG&A guide spends so long on the list of costs people forget.
Step 4 — the profit, month by month
Gross profit minus overheads. The P&L builds this for you; nothing here is typed in twice.
| Month | Revenue | Cost of sales | Gross profit | Overheads | Operating profit |
|---|---|---|---|---|---|
| Jan | 20,910 | 6,840 | 14,070 | 16,721 | -2,651 |
| Feb | 22,985 | 7,535 | 15,450 | 16,439 | -989 |
| Mar | 25,925 | 8,495 | 17,430 | 16,702 | 728 |
| Apr | 28,000 | 9,190 | 18,810 | 16,399 | 2,411 |
| May | 29,470 | 9,670 | 19,800 | 17,135 | 2,665 |
| Jun | 27,075 | 8,890 | 18,185 | 16,632 | 1,553 |
| Jul | 25,060 | 8,230 | 16,830 | 16,346 | 484 |
| Aug | 24,135 | 7,930 | 16,205 | 16,349 | -144 |
| Sep | 30,075 | 9,885 | 20,190 | 16,766 | 3,424 |
| Oct | 32,150 | 10,580 | 21,570 | 16,514 | 5,056 |
| Nov | 33,360 | 11,010 | 22,350 | 16,615 | 5,735 |
| Dec | 35,450 | 11,750 | 23,700 | 17,613 | 6,087 |
| Year | 334,595 | 110,005 | 224,590 | 200,231 | 24,359 |
3 of the twelve months lose money — Jan, Feb, Aug. That is not a mistake in the plan. It is what a seasonal business with fixed costs looks like, and it is the whole reason the year has to be written out month by month instead of divided by twelve.
Step 5 — the cash
A café is paid at the till, so there is no wait for the money and cash follows profit closely. Depreciation is added back, because it is a cost on the P&L that never leaves the bank.
It starts at EUR 18,000 — what is left after the fit-out — falls to EUR 15,200 in month 2, and ends the year at EUR 47,399.
That low point is the number that matters. Open this shop with EUR 18,000 and it survives. Open it with EUR 3,800 less and it does not reach month 3, on exactly the same trading. Same plan, same profit, different outcome — which is the point of the cash flow guide.
What this example does not do
The balance sheet is left empty, on purpose. It cannot be filled in honestly without an opening position — what the owner put in, what the fit-out cost, what is still owed on it — and those are yours, not ours. A balance sheet that does not balance would teach the wrong lesson. Open the balance sheet and type your own; the line at the bottom tells you the moment it stops balancing.
There is also no tax and no loan repayment in here. Both are real and both are local to you.
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