Chartered Financial Analyst specializing in food/beverage and retail business finance.
Determine how many customers your coffee shop must serve per month to cover all costs. Enter any three variables—Monthly Fixed Costs, Avg. Order Value, Avg. Variable Cost, or Breakeven Customers—to solve for the fourth.
Coffee Shop Breakeven Calculator
Coffee Shop Breakeven Formula
The breakeven formula for a coffee shop finds the number of customers (Q) it must serve for total monthly revenue to equal all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Order Value (P):
P = (F / Q) + V
Solve for Avg. Variable Cost per Order (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., store rent, utilities, barista salaries, POS system, insurance).
- Avg. Order Value (P): The average amount a single customer spends in one transaction.
- Avg. Variable Cost per Order (V): The average cost of ingredients for one order (COGS), plus any per-order packaging (cup, lid) and payment fees.
- Breakeven Customers (Q): The total number of customers (or transactions) you need to serve to reach $0 in monthly profit.
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What is a Coffee Shop’s Breakeven Point?
A **Coffee Shop Breakeven Point** is the number of customer orders (Q) your shop must process in a month to cover all your total expenses. This is the minimum sales volume you need to achieve to start being profitable.
**Fixed Costs (F)** are your monthly “overhead.” These are the expenses you pay regardless of whether you sell one cup of coffee or a thousand. This includes your storefront rent, barista salaries (not including overtime), utilities, insurance, and software subscriptions (e.g., POS, scheduling).
**Variable Costs (V)** are the costs tied *directly* to each order you sell. This is primarily your “Cost of Goods Sold” (COGS)—the cost of the coffee beans, milk, syrup, and pastry. It also includes the paper cup, lid, sleeve, and any payment processing fees (e.g., 3% of the sale).
The **Contribution Margin** (P – V) is the profit from a single customer order that goes toward paying off your large monthly fixed costs. This calculator finds how many customers you need to serve to cover your total overhead. Every customer served *after* this point generates your net profit.
How to Calculate Coffee Shop Breakeven (Example)
Let’s calculate the breakeven point for a small coffee shop.
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Identify Monthly Fixed Costs (F):
The shop has $8,000 in monthly rent, utilities, and staff salaries.
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Identify Avg. Order Value (P):
The average customer spends $6.50 (a coffee and a pastry).
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Identify Avg. Variable Cost (V):
The average COGS (beans, milk, pastry, cup) is $2.20 per order.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per order: $6.50 (P) – $2.20 (V) = $4.30.
Next, divide the fixed costs by this margin:
Q = $8,000 / $4.30 = 1,860.46 -
Conclusion:
The coffee shop must serve 1,861 customers (rounding up) each month (or about 62 per day) to cover all costs and start making a profit.
Frequently Asked Questions (FAQ)
Your core staff’s regular hours are a **Fixed Cost (F)** because you pay them whether the shop is busy or empty. Overtime hours that are only needed *because* of high customer volume (Q) could be considered a **Variable Cost (V)**.
This is your COGS (Cost of Goods Sold). For coffee shops, a COGS between 25-35% of your sale price (P) is common. In our example, $2.20 / $6.50 = 33.8%, which is a healthy margin.
At the end of the day or week, divide your total sales revenue by the total number of transactions (customers). For example, $3,000 in revenue / 460 transactions = $6.52 (this would be your P).
Enter your (F) (e.g., $8,000), (V) (e.g., $2.20), and a realistic goal for customers (Q) (e.g., 2,000/mo). Solve for (P): `P = ($8,000 / 2,000) + $2.20 = $4.00 + $2.20 = $6.20`. This means your average order must be at least $6.20 to break even.