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Are you cut out for running a coffee shop?January 24, 2018
Calculating the cost and profit of each cup of coffee is important to understand when opening or running your own cafe or coffee shop.
A takeaway coffee is usually your worst case scenario because it has the extra cost of the takeaway cup. The way to calculate the individual costs of the ingredients is as follows:
The amount of coffee used obviously changes with the drink size. At Urban we double shot our medium's and triple shot our larges. A single shot for us is 9 grams, so our medium is 18 grams. Coffee is sold in Kilogram bags, 1000 grams / 18 grams means 55 medium drinks from each Kg bag. A kg bag of high quality coffee costs around £14, £14 / 55 = £0.25 per medium coffee.
The amount of milk used obviously changes with the drink size and drink type. Our medium drinks contain 12oz (341ml) of milk in, therefore each litre of milk produces 2.93 medium drinks. Each litre currently costs around 50p, 50p / 2.93 = £0.17 per medium drink.
Value Added Tax (VAT) is the big element of cost within your cup of coffee. Remember you are collecting this for the government and because the ingredients don't have VAT on them you will be sending the whole amount to the TAX man. Use a VAT calculator to work out how much the VAT will be on your coffee.