Where's Best If Break Even Is 100 Customers / Day? (if There's Already A Thread On...

[webworldly]

Greetings!

For a "dessert / sweets" shop that is to feature baked dessert treats (no bread, just cookies and sweet stuff)....and will also serve coffee....desired average ticket of 80baht or so.....needing 100 customers a day to break even....what part of Bangkok would be best and how much seating would be required?

Thank you in advance for your input. You guys are the entrepreneurial gurus.....I'm not even a wanna' be yet.

CHEERS!

D

[maccaroni man]

Greetings!

For a "dessert / sweets" shop that is to feature baked dessert treats (no bread, just cookies and sweet stuff)....and will also serve coffee....desired average ticket of 80baht or so.....needing 100 customers a day to break even....what part of Bangkok would be best and how much seating would be required?

Thank you in advance for your input. You guys are the entrepreneurial gurus.....I'm not even a wanna' be yet.

CHEERS!

D

how do you know what your break point is if you do not know what your rent payment is?

[webworldly]

Hi Maccaroni Man......that's a good question. Truth be told, my starting point for the calculation was based on thinking that wherever I located.....regardless of rent.....if I need more than 100 customers per day just to break even....I'm probably in too expensive an area. And since my concept fits just in the dessert niche.....specifically, no full meal menu...and since it would be my first go in Thailand.....I'm hoping to sort it out so that I'm in a good location and can still at least break even at 100 customers per day. Then, as I refine, improve, and evolve the concept with real customers.....I'd be looking to expand the projected customer count for any future outlets.

Sound reasonable or no?

CHEERS!

D

[farang555]

no disrespect sir. but with your business sense i would steer you toward teaching english.

just one point. there are certainly enough shops already unable to sell their sweets, even the megamarkets dont seem to be able to move product.

[webworldly]

Hey Farang555......thank you for the feedback. You are absolutely right that there is ample competition in the sweets sellers market in Bangkok.....but I'm hoping to learn more about the "where to locate" side of things. Do you have a recommendation for location?

CHEERS!

D

[CWMcMurray]

Hi Maccaroni Man......that's a good question. Truth be told, my starting point for the calculation was based on thinking that wherever I located.....regardless of rent.....if I need more than 100 customers per day just to break even....I'm probably in too expensive an area. And since my concept fits just in the dessert niche.....specifically, no full meal menu...and since it would be my first go in Thailand.....I'm hoping to sort it out so that I'm in a good location and can still at least break even at 100 customers per day. Then, as I refine, improve, and evolve the concept with real customers.....I'd be looking to expand the projected customer count for any future outlets.

Sound reasonable or no?

Sorry but I would have to say NO

You are coming at this whole thing backwards...

You can't start with a break even point and try find out the rest. You need to determine your target market, location, and your costs and this will help you determine your break even point.

Then you would need to do a market analysis to see if this break even point is a realistic threshhold that you can surpass.

Your break even point is the last thing you will know, not the first...

Edited August 2, 2008 by CWMcMurray

[PREXPRESSBKK]

I love Thaivisa.....its always so amusing!

[klikster]

Sorry but I would have to say NO

Why? The guy is thinking, planning and trying to analyze.

You are coming at this whole thing backwards...

Mayby obliquely, but not backwards, IMO.

You can't start with a break even point and try find out the rest.

Sure you can. You just need to make some assumptions then work in both directions. Then validate your assumptions.

You need to determine your target market

That may or may not indicate success .. But what will it tell you about your breakeven point

, location, and your costs and this will help you determine your break even point.

So will assumptions

Then you would need to do a market analysis to see if this break even point is a realistic threshhold that you can surpass.

Your break even point is the last thing you will know, not the first...

Looking at a business opportunity by making assumptions is a good strategy for a 'first pass'. If more expats did that sort of thing, we would see fewer failed beer bars.

[CWMcMurray]

Ok, so you can start with a break even point but it will be meaningless, just a random number pulled out of the air.

Picking your target market will not help to determine success but it will help you to pick a location. The bigest variable will most likely be the amount of rent that will need to be paid, the rest of the supplies/costs should remain fairly constant regardless of the location picked.

The other thing it will help you to determine is the amount you plan to charge for a cup of coffee, the prices of which range between 15 THB and 150 THB.

After you have this information combined with aproximate variable and fixed costs then you can play with break even points in order to see the total number of customers that would be needed in different locations.

Once you have a couple of location ideas then take some time to go and look at the foot traffic and buying behaviors of the people in those areas.

It is not that you can't start with an assumed break even point, it is just that the number you start with will really have no meaning... so why start there???

[klikster]

Ok, so you can start with a break even point but it will be meaningless, just a random number pulled out of the air.

That depends entirely on who is doing the pulling.

Picking your target market will not help to determine success

You're joking, right? Should Sony be targeting the new VAIO at Zimbabwe?

but it will help you to pick a location. The bigest variable will most likely be the amount of rent that will need to be paid, the rest of the supplies/costs should remain fairly constant regardless of the location picked.

Surely you mean fixed expense .. not variable.

The other thing it will help you to determine is the amount you plan to charge for a cup of coffee, the prices of which range between 15 THB and 150 THB.

After you have this information combined with aproximate variable and fixed costs then you can play with break even points in order to see the total number of customers that would be needed in different locations.

Once you have a couple of location ideas then take some time to go and look at the foot traffic and buying behaviors of the people in those areas.

It is not that you can't start with an assumed break even point, it is just that the number you start with will really have no meaning... so why start there???

You first .. what part of a business plan is not an assumption and has "meaning"?

The OP is planning .. albeit a bit oblique .. but a very important exercise prior to investing hard money. You may not like his plan nor his assumptions .. but then we don't have all the answers .. do we?

[ObertoSanchez]

What op should be doing is est. $100,000 profit first year, just to be conservative. Then figure out how much to charge for each donut or pastry, if he needs $10 a donut then thats the price he should charge.

[CWMcMurray]

I have already said what I would do, but at the end of the day he will do what he thinks is best and he may be successful or unsuccessful regardles of his business plan...

I am sure that you realize the difference in the meanings between "variable" and "variable cost".

I was not discussing variable vs fixed costs, I was discussing variables in the cost structure. The cost of your coffee, coffeemachines and cups are not likely to change regardless of where your shop is located. The same can not be said of your rent...

[nembleton]

Actually, I personnaly appreciate the reverse thinking.

It's surely not standard stuff, but still makes sense in the way that it can provide you another calculating grid to be crossed with the more standard business plan grid calculation.

Using the reverse thinking, you say, "I want this, so how can I reasonnably get to my break even point?".

Then you sure get interesting information. And by crossing you reduce the "randomness" and "theoricalness" of the usual business plan. That still mandatory, no need to say it. ( ok I did ). At first for that lovely bank institution.

So, I cannot give you answers as I leave in Vietnam, but I will say that you are on a good start, and certainly in a very appreciable positivity.

Keep going on.

[Cuban]

For a "dessert / sweets" shop that is to feature baked dessert treats (no bread, just cookies and sweet stuff)....and will also serve coffee....desired average ticket of 80baht or so.....needing 100 customers a day to break even....what part of Bangkok would be best and how much seating would be required?

Thank you in advance for your input. You guys are the entrepreneurial gurus.....I'm not even a wanna' be yet.

Dearest OP,

I really like Dim Sum. I bought a few selection packs the other week pork flavoured (!) things in green wrappings and current favorite glooby prawn things, nice with mustard and balsamic vinegar. But I fear that the love affair will be short as I have the urge to BBQ tonight and a new pizza menu arrived the the other day so I am sure to be moving on. Will your 100 customers per day be loyal or will they demand (with their feet) change and wider selection that baked treats and coffee?

The what part of Bangkok is really the age old location question, and for a grab and go format, location means shop front (and rear if you are baking on the premisis) which needs high volume foot traffic with time and money to spend. Kids are low spenders on coffee, avoid schools etc. Need to think BTS stations and complexes. So you come up to high rents.

As a low guess at monthly figures I have sometime like this on a spreadsheet in front of me:

Income 192,000

Food drink production cost: 60,000

Rent: 50,000

Staff x3: 45,000

Electric: 4,000

Water: 1,000

That leaves you with about 32,000 a month - enough to live on?

I've assumed that you have the budget set aside to refurbish and equip the location, sort out licences and your WP - even if you are working behind the scenes at night. You can't be managing the place during the day, it would be seen as shop assitant - a reserved occupation.

Edited October 7, 2008 by Cuban

[foxxx]

why do people revive these 2 month old topics :|

[nembleton]

why do people revive these 2 month old topics :|

Because the question and the subject was interesting.

"A good question never dies"

[imaneggspurt]

Well i just bought 4 portions of spotted dick off ebay ! cant wait for it to arrive !

[torrenova]

Reverse engineering a business plan can be done if you start from the point of view that you need to make a profit of this or a ROI of X% on an investment of Y baht. No point having a profitable business if it does not put enough food on your table.

Not sure how the OP (and I know he left the building a long time ago) got Bt80 for his average spend nor his 100 customers. The only way I can think is that he worked out what he needed to earn and then produced a sales figure of Bt8000 a day as being able to provide a net which he was happy with. Rent costs as well as staff seem to have been forgotten, as well as licenses and utilities. N mention of fitting out costs or depreciation either.

Nevermind, I didn't have a problem with dragging this thread back to the top !