I’ve continually wondered about the viability of our shop’s lease, and have never found coffee industry specific talk about Occupancy Costs. Widespread business advice is that that your total occupancy costs – Lease, Common Area Maintenance Fees, Utilties, Etc – should make up about 10% of total net sales for restaurants and bars. If you’re paying $3k in occupancy costs per month, you should aim for sales of around $30k per month.
However, for coffee shops (note: not roasteries with coffee bars) 10% seems hard to achieve, and our shop even has a decent selection of food and retail sales. Is anyone pulling off this kind of ratio?
Our first six months open, our occupancy costs were 23.3% of our sales – that seemed unsustainably high.
Four years later, our costs look to be about 16% of sales. This seems sustainable, we’re happy enough, but is well above restaurant business advice. What kind of ratios do longer-established coffee bars have? What kind of ratios are businesses with multiple locations seeking?