📊 FINANCIAL FORECASTING FOR CAFÉ OWNERS

Your Practical Guide to Building a Profitable Future

🧭 WHY FORECASTING MATTERS

A financial forecast is a prediction of your café’s future performance. It includes:

• Your expected sales

• Your cost of goods sold (COGS)

• Your gross and net profit

• All your expenses grouped in logical categories

• And your breakeven point — the sales target you need to hit just to cover your costs

Forecasting is not about “guessing” — it's about informed planning, using real data, quotes, benchmarks, and experience.

 

🛠 WHAT YOU’LL NEED TO BUILD A FORECAST

Before you begin, gather:

• Your menu and ingredient list

• Supplier quotes or pricing estimates

• Staff wage plans (including your own)

• Quotes or estimates for rent, utilities, insurance

• Equipment and fit-out costs

• Admin and marketing costs

 

🔢 STEP 1: FORECAST YOUR SALES

Start with realistic assumptions about how many customers you’ll serve and what they’ll buy.

✅ Forecast by category:

• Coffee sales

• Food sales

• Other drinks (smoothies, juices, etc.)

• Retail items (beans, keep cups, merch)

💡 Work in units sold per day or week, then multiply by your average prices to build your revenue forecast.

📌 Sales = Price x Quantity

 

🥪 STEP 2: CALCULATE COST OF GOODS SOLD (COGS)

These are your direct input costs — what it costs to make and serve each item.

✅ Include:

• Ingredients (milk, beans, food items)

• Packaging (cups, lids, napkins)

• Garnishes, sauces, condiments

• Anything consumed per serve

💡 COGS should generally sit at:

• 30–35% for food

• 25–30% for beverages

 

📈 STEP 3: BUILD YOUR PROFIT & LOSS FORECAST

Your P&L (Profit & Loss) is your café’s financial heartbeat. It shows whether your business is healthy — and how close you are to reaching your goals.

🧾 PROFIT & LOSS STRUCTURE

Line Item	Explanation
SALES	Your total revenue from all product categories
– COGS	Cost of ingredients, packaging, etc.
= GROSS PROFIT	What’s left after producing your menu items. Aim for 65–70% if possible
– OPERATING EXPENSES	Everything else: rent, wages, admin, marketing, maintenance, etc.
= NET PROFIT (or LOSS)	The bottom line — what’s left over (or not) at the end of the month/year

💡 Net Profit should ideally sit at 10–15% of total revenue. Anything below 5% is risky for small businesses.

💼 STEP 4: UNDERSTAND YOUR EXPENSE CATEGORIES

To forecast accurately, break your costs into smart, logical groups. This helps you organise your thinking and stay on top of your finances.

🏢 OCCUPATIONAL EXPENSES

What it costs to occupy your site

• Rent or lease

• Utilities (electricity, gas, water)

• Cleaning, pest control

• Insurance

• Internet and phone

• Security or alarm monitoring

👥 EMPLOYMENT EXPENSES

The people who run your café (including you)

• Staff wages and super

• Owner’s wage

• Payroll tax (if applicable)

• Staff meals, training, uniforms

• Recruitment and onboarding

🍽 COST OF GOODS SOLD (COGS)

Direct costs of food, coffee, drinks

• Raw ingredients

• Packaging and consumables

• Beverage add-ons and alternatives

🧾 ADMIN & PROFESSIONAL SERVICES

Keeping the back end of your business legal and smooth

• Accounting and bookkeeping

• POS and software subscriptions

• Bank and merchant fees

• Legal or HR advice

• Office supplies

📣 MARKETING & PROMOTION

Bringing customers through your doors

• Social media ads

• Graphic design and branding

• Loyalty programs

• Menu printing

• Website domain and hosting

🛠 MAINTENANCE & OPERATIONS

Keeping equipment and systems running

• Machine servicing and repairs

• Filter replacements

• Fire safety compliance

• Maintenance tools and consumables

🎯 OWNER’S / DISCRETIONARY COSTS

Costs that aren’t essential but reflect your involvement

• Owner travel or training

• Bonuses, donations

• Team development or incentives

🧮 STEP 5: CALCULATE YOUR BREAKEVEN POINT

Your breakeven is the minimum sales target you need to hit to avoid losing money. It’s where your total revenue equals your total expenses — and anything you sell beyond that is profit.

📊 HOW TO CALCULATE:

Breakeven Sales=Total Monthly Fixed Costs / Gross Profit Margin

💡 Example:

• Fixed costs = $18,000/month

• Gross profit margin = 65%

• Breakeven sales = $18,000 / 0.65 = $27,692/month

• Daily breakeven = ~$920/day (if open 30 days)

🎯 WHY THIS MATTERS:

• Gives you a daily sales target

• Helps you plan pricing and staffing

• Critical when negotiating rent or borrowing money

📌 BREAK IT DOWN FURTHER:

• How many coffees per day?

• How many toasties or meals?

• Use this to motivate your team and focus your menu strategy.

 

📅 STEP 6: REVIEW & UPDATE REGULARLY

Your forecast is a living tool. Revisit it:

• Every 1–3 months

• After major changes (staff, rent, pricing, etc.)

• When you want to grow, borrow, or pivot

Treat it like a dashboard, not a one-off document.

 

✅ FINAL CHECKLIST FOR YOUR FORECAST

 

🤝 ZEST’S SUPPORT

Zest isn’t just your coffee supplier — we’re your partner in profitability. We offer:

• Templates and calculators

• Menu engineering support

• Barista training to maximise quality and margin

• Smart forecasting tools

• Real café data and case studies

• Experienced café advisors for one-on-one support

 

🏁 WRAPPING UP

“Revenue is vanity, profit is sanity, cash is reality.”

You don’t need to be a finance wizard. But you do need to know your numbers. A clear, detailed forecast gives you the best chance of building a thriving café — one that funds your lifestyle, supports your team, and builds a sellable asset for the future.