Five Steps to Drive-Thru Success: Part 3
Last week, we posted Part 2 of Five Steps to Drive-Thru Success. This week, we'll be talking about mastering the basics. If you missed Part 1 or Part 2, click here to read those posts.
Step Three: Mastering the Basics
As with any business, you want to be sure to understand the numbers. A key formula used for this is the break-even formula: Net Sales (30 day average; 500/day = $15,000) – COGS Cost of Goods Sold = Gross Margin. Then, you can determine your net income or loss by deducting your operating expenses from your gross margin.
COGS include coffee, cups, lids, small wares, syrups, bakery items, etc. Does not include labor, rent/lease, marketing. Your COGS should equal 30-40% of gross sales.
Operating expenses include payroll (labor), rent, taxes, utilities, phone, etc. Your rent or lease should represent 5-10% of gross sales.
It is also important to be mindful of your labor costs, which should be around 15-25% of your gross sales. A high labor percentage can be negative on your return on investment but beware, a low labor percentage can be detrimental to your return on investment and the future of your business. Another factor to be mindful of is waste. Keeping a log for returns, broken items from a vendor, sour milk, and more can help you stay on track and prevent future issues from arising.
You can enhance your current business by doing the following:
- Grow average ticket ring by upselling
- Retention rate/keep current customers loyal (do not offend or lose customers)
- Have high-quality service and products
- Keep lines down, know your sales by hour and staff accordingly
- Promotions to entice new customers: Buy 1 Get 1 free
- Sign up for apps like Joe Coffee; https://joe.coffee
- Offer relevant items, pumpkin lattes, infused energy drinks
Adapted from a Coffee Fest New York 2020 seminar, presented by Mike Miller of Dillanos Coffee Roasters.