Barista Financial Literacy Project

Hey everyone,

I’m keen to put together a spreadsheet or even a few spreadsheets and tools to help Baristas with their financial literacy in a professional setting. If we can help some baristas tighten the screws or understand their product a little more, then efficiencies, salaries, and brains will all be benefiting.

I think a good first project will be a cost of goods calculator. I don’t know exactly how it will look right now, but I’m sure there’s enough people with good ideas in here that we can knock it out of the park.

I’m imagining a simple section of user inputs where the user can define things like wage, cost per kilo, wastage etc. etc. with guides and industry standards next to them for reference.

Any ideas, existing solutions, or challenges I’m not foreseeing? Let’s help each other optimise the heck out of their drinks!


Some clarification ::

Is the idea to give the EMPLOYEE barista some insight into the expense/costs of running a business? If so, is the goal to hopefully enlighten + create understanding amongst the employees as to how complicated/hard/etc it is to run the business, in turn hoping that it will have them work harder/be more understanding for their employer?

Or is the goal to help hopeful/current cafe owners + baristas put together business tools to better understand their businesses?

Just curious as it may have an effect on what and how points are brought forward. I don’t own a cafe, but I have 8+ years (not to mention my wife’s 9+ years) running a customer-service based business with employees, so I’m happy to contribute from a general business sense if/when that is relevant to the conversation. :slight_smile:

Great to have this topic - I’d guess most hospo people are not financial types, we’re people-people and making-it people, so the number skills get ignored or avoided.

A few simple calculations that help everyone get clear on business costs:

  1. Supplies In / Sales = Cost of Goods. Not entirely accurate if there is large stock on hand, but once averaged over a few weeks, it’s very useful and easy to work out. Food and other beverage sales needs to be kept out of the equation, so the coffee figures are accurate, so basically purchases of beans and milk. Sugar would be too minor to worry about.

  2. Stocktake calculation: Opening stock (last week’s closing stock) + Purchases - Closing Stock = Cost of Goods Sold (very accurate). This will make the calculation in #1 correct.

  3. Real Cost of Staff = Wages + Super payments + Workers Comp + Uniforms etc
    Most staff don’t realise about all the add-on costs. Divide this total by the number of customers served to get the cost of looking after each person - can be scary!

  4. 100c in the Dollar exercise. Get 100 coins to represent 1c pieces, and ask staff to tell you how much goes on wages, rent, COGS, electricity, profit etc. They only have 100. It’s likely to be wildly inaccurate and is a great starting point to explain the real cost of running a business.

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Can your staff use a Calculator? Probably not!

They all have one on their phone, but most avoided that class in maths at school, or forgot immediately after! If you want to do calculation exercises, need to make sure they have the basic skills. Do some coaching with coffee examples for division, multiplication and the one that gets most of them: doing a percentage!

I’ll throw in this not-perfect spreadsheet I’ve developed years ago for manual brew, teas, and espresso drinks. It’s documented just enough to figure out how to use it; my general goal is to keep COGS (defined here as just labor+product cost as calculated) to 30% or lower. Some things inevitably go to the mid-30%'s, some items go into the low 20%'s. Stripped most identifying data, and product costs in here are years old, so take them as you will. Set as read-only, make a copy if you want to re-use.

EDIT: Don’t know the best way to make this an independent link instead of an inserted frame, so for now just add “” to the front of this link: /spreadsheets/d/1wg0haFTn0nEC8-R5LiyQzESKhjP24xTN3O95pv76ZxM/edit?usp=sharing


I can remember reading, I think in Fast Food Nation, that many of the ingredients used were so cheap they barely featured in the cost calculations. It was all about wages, staff turnover, and rent.

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Is it true that less profit is made from an espresso than the other coffee based drinks, even though it takes so little staff time?
It would be interesting to see the true breakdown from the 100 coin exercise.

Given how many people in the industry go from working as a barista to opening up a shop with very little understanding of the basic costs of doing so, I think this could be a pretty valuable resource.

I have a rough spreadsheet I can throw over to you I used a few years back. It isn’t complete, but broke things down into sections where you could edit the cost of all ingredients, edit how much of those ingredients you put in, how much you wanted to charge, café hours, staff and staff costs, utilities, rent, estimation of how many of each product you expect to sell, etc etc; and it would spit out a pretty thorough breakdown of what your margins would be, your tax, your costs per hour, your earnings per staff hour etc etc.

Let me know if you want to have a look at it, could be a good starting point.


Sounds interesting and relevant Alex.

I second the ‘sounds amazing!’ thought! Would you be willing to share with the BH community? I know a lot of hard work went into the spreadsheet, so I don’t expect you’d share it willingly. I’m sure that spreadsheet is worth a thing or two. :slight_smile:

Definitely!!! Please do share a link. It could help a lot of people with their small business ventures!!

This couldn’t be a better time Alex because in about eight months that will be exactly my situation.

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? where is it? :slight_smile: We are waiting:)

Hey all!
I’m not trying to steal Alex_MacIntyre’s thunder, but I have a Google Sheet that could be of use to some of you.
I’ve put together this for calculating CoGS (on coffee items), pricing, and financial projections. It’s part of what I’ve used for projecting sales and cash flow throughout a cafe startup phase. Let me know if you have any questions or if there are ways I can improve it! Feel free to make improvements on your own, too!
You can view the file here: Financial Projections Sheet (Public).


Excellently structured! Thanks for sharing, Aaron!

Thank you very much Aaron!

Mate that’s out of control! Mind if I ask a couple questions about it?

  • what do you mean by burden rate?
  • I assume users only put numbers into the light blue boxes?

It’s pretty much exactly what I was thinking of!

Hey Matt! Burden rate’s often overlooked but typically a significant additional cost to owners, especially when not factored in while making hiring decisions. Can look like employee benefits you offer (health insurance, PTO, 401k/IRA match programs, comped food/drink for them, FSA/HSAs, uniforms), other considerations would be travel/training costs you absorb.

All great things to help retain employees, as they plan for families, etc…but burden rate can add up - thus important to account for.


Shawn answered the Burden Rate question better than I would have! Better anticipating and planning for employee expenses has helped me see what benefit-goals are realistic and attainable as the company grows.

The light blue boxes should be filled in by the user! Those values will affect the various equations on the top half. There are other fields, mostly expenses (payroll, startup costs, etc) that can be added by the user as well. Those affect the bottom half of the sheet.

FWIW I made this sheet as an easier-to-change projection tool than what was included with LivePlan, which I’ve also used (and recommend for business planning). This spreadsheet is in need of some visual cleaning and equation adjustments to make it more functional for more people. This is definitely a minimum viable product for me, haha. Hopefully I can make some improvements to it soon!

I would like to comment on point 1 about cost of goods. Coming from a restaurant background, a common mistake is to do costing off of invoices(supplies in) versus actual goods sold. For example, if I bring in a 5 pound whole chicken, I have to factor in yield when doing my costing. To be accurate, you need to figure in what you aren’t selling- the bones, shrink due to moisture loss from cooking, returns/refires and comps, etc. etc. This is a common mistake in restaurants, and one that sends many to the grave. Point being, if my 5 pound chicken is only netting me 3 pounds in sales, thats what I need to divide by sales to get an accurate cost.

In coffee, you need to factor in the cost of dialing in every morning and adjustments throughout the day, training, remakes, theft etc.

The only way to do so accurately is to be sure to ring in absolutely everything so you can keep track of comps, voids and shrink.

Awesome conversation and one that we all need to consider to stay profitable.