Estimating Daily Sales

[sugarseattle]

I'm just about to open a high end bakery/cafe in a very good location in Seattle called First Hill. There are three hospitals nearby with about 4,000 employees total at any given time, plus a lot of foot traffic. Parking is a little bit of a bitch so mostly we think we'll get the people in the area. The location is particularly good for lunch.

So, I'm putting together some documents for my bank, and have started a worksheet to try to estimate my gross daily sales. Here's a summary:

Here's what I have so far:

$60.00 or 10%, Breakfast (scones, cinnamon rolls, croissants)

$207.00 or 36%, Lunch (sandwiches, salads, box lunches)

$28.50 or 5%, Snacks (cookies, bars, confections)

$132 or 23%, Desserts (petit fours, mini cakes, slices, special orders)

$151 or 26%, Drinks (espresso drinks, coffee, sodas, bottled water)

$580 TOTAL

I'm trying to be very conservative with my numbers. Am I close or way off?

[SundaySous]

You left out the cakes made to order, Danish Trays and bread. Doesn't matter if you're doing them or not what matters is the bank thinks you are.

[sugarseattle]

cakes made to order and "danish trays (not common in seattle)" would be included in desserts under special orders and we're not doing bread.

The question is not about my menu, it's about trying to get a good estimate on how much of each item group I will sell.

[SundaySous]

Wish I could help. What you need is an outrageously priced consulting service that will take in the areas demographic profile and make a nice little report for your bank.

I hope this you, if your not even open and already generating a buzz that's a good thing. I found that link here.

Why don't you paste the bakery's name and address and then I can talk about it on a few blogs and you can get some google recognition.

If you haven't been to the Small Business Administration yet I highly recommend it. Once you have cash flow SBA grants and or loans should be easier to obtain Who knows maybe they can do a sales estimate for you.

[sugarseattle]

Here's the info:

Sugar Bakery + Cafe

1014 Madison Street

Seattle, WA 98104

(206) 749-4105

We're generating tons of buzz...I get a few emails a day from people telling me they're excited about our soon to be open bakery. Of course extra marketing can't hurt! I don't think we'll have a problem there, but convincing the bank we're a worthwhile investment when we have no cash because we spent it all to save my husband's life from cancer, well that's another story.

[phaelon56]

How many square feet of customer space is there? (space where people can sit to eat and drink and also the space where they can queue up to order or wait for finished orders)

Seating will be for how many? (If you have not already planned for it a counter across the front window with high stools or chairs will help)

When are the shift changes at the hospital and what are your anticipated hours of business?

Is the parking such that early in the day people will be able to park within a few hundred yards on the street, grab a few items and then head in to work or will they need to park in the designated lots or garages and then walk to your place?

How many minutes on average does it take to walk from the nearest entrance or exit door of each hospital to your location?

My gut instinct is that your estimates are too low but understanding the specifics of your locale will make it easier to offer a more educated answer.

[JeanneCake]

I also think your estimates are on the low side... and agree that without knowing what your average beverage price is; what your average lunch price is (and does that include a beverage and a dessert or is it a la carte?)or whether there are other choices in the area or not makes it hard to quantify the numbers.

This is exciting - and scary - I'm sure. We're all with you in spirit and pulling for you!

[SundaySous]

How much is the loan. We can cut right to the chase by knowing. The bank's number one concern is your ability to make the payments. Your numbers have to add up to that.

Looking at google maps I think you have a good location. I'm going to install google earth to get a better look.

[tsquare]

Make friends with Hans down the street at Arosa. He knows the numbers - and he just sells a couple of items - he has mad swings in sales, but I know he gets orders for 50 waffles or 20 sandwiches (or was it 50) onve a week on a weekly basis - for one customer.

If the product is good (and I know it is!) - the docs will love you and so will the legit drug sales people (the non-legit you'll deal with anyway.)

[SundaySous]

Make friends with Hans down the street at Arosa. He knows the numbers - and he just sells a couple of items - he has mad swings in sales, but I know he gets orders for 50 waffles or 20 sandwiches (or was it 50) onve a week on a weekly basis - for one customer.

If the product is good (and I know it is!) - the docs will love you and so will the legit drug sales people (the non-legit you'll deal with anyway.)

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Excellent point. Hook up with the pharmaceutical reps. They have exspense accounts and often bring in goodies for the whole staff of a Doctors office.

[JeanneCake]

How true, how true! The caterer I share with does several lunches a week for them (we call them drug lunches) - they are the only customers that use a credit card which if you weren't going to accept you might want to rethink. The only reason my landlord accepts credit cards is so she can do these lunches, and they are lucrative...

And, you can negotiate the transaction rate when you are talking to the credit card company - shop this around for the best deal. Ultimately I ended up not doing it (I couldn't justify the amount they were charging for the unit but the transaction rate was below 2%) but it would make my life so much easier if I took credit cards.

[gfron1]

My answer to you is if the numbers that you presented in the opening post are good enough for a loan, then you're in good shape. I can't imagine you doing that low of sales. The other thing that was left off was catering - even if you don't do it - you'll have offices and departments asking to order carafes of coffee, etc. I'm assuming you've set your pricing to be competitive with other shops.

[Mr. Delicious]

Make friends with Hans down the street at Arosa. He knows the numbers - and he just sells a couple of items - he has mad swings in sales, but I know he gets orders for 50 waffles or 20 sandwiches (or was it 50) onve a week on a weekly basis - for one customer.

If the product is good (and I know it is!) - the docs will love you and so will the legit drug sales people (the non-legit you'll deal with anyway.)

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Excellent point. Hook up with the pharmaceutical reps. They have exspense accounts and often bring in goodies for the whole staff of a Doctors office.

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I own a cheesecake bakery in a much different market but similar location (proximity to hospitals) drug reps are huge for me, I would say that they easily account for 5-15% of my sales, last year I shipped 90 cheesecakes nationwide for one rep in the end of december.

I do think your sales are low, also you can look into selling desserts and such to other restaurants, that makes a big difference for me and they are consistent sales.

[phaelon56]

The other thing that was left off was catering - even if you don't do it - you'll have offices and departments asking to order carafes of coffee, etc.  I'm assuming you've set your pricing to be competitive with other shops.

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Good point. Find out what the pricing is at other shops in Seattle - e.g. bagel shops, coffee chains, independents etc. - for the "joe to go" boxes. I assume you'll be brewing coffee into airports - right? (if not please consider doing that). The disposable coffee carafe itself holds either 96 oz or 128 oz. The 96 oz size is a perfect match for 3 liter airpot brewers.

Price it so the cost per cup is about the same as buying coffee by the cup. You'll be eating the $4 to $5 cost of the carafe but the add-on sales of baked goods, juice etc. will more than make up for that. Yes - as has already been aptly pointed out - pharmaceutical reps are your friends - a great market to cultivate.

[sugarseattle]

Thanks for all the comments. I LOVE hearing that my numbers are low. I had a hard time imagining I'd only be selling 40 cups of coffee in SEATTLE when my only real competition is Starbucks!

These comments really help. keep 'em coming!

Anyway, here's some anwers to the questions below...I"m in all caps

How many square feet of customer space is there? (space where people can sit to eat and drink and also the space where they can queue up to order or wait for finished orders)

900SF SPACE, 2/3=PRODUCTION, 1/3 RETAIL & STANDING AREA, SEATING FOR 12, MOSTLY GRAB & GO LOCATION

Seating will be for how many?  (If you have not already planned for it a counter across the front window with high stools or chairs will help)

When are the shift changes at the hospital and what are your anticipated hours of business?

WE'LL BE 7am -7pm. THIS AREA IS HUGE FOR LUNCH, SO WE WILL BE DOING PRE-ORDERED BOX LUNCHES TO MAXIMIZE SALES DURING THAT BIG SURGE

Is the parking such that early in the day people will be able to park within a few hundred yards on the street, grab a few items and then head in to work or will they need to park in the designated lots or garages and then walk to your place?

PARKING SUCKS IN THE AREA...ONLY METERS AND NO PARKING DIRECTLY IN FRONT OF SHOP. THIS MAY BE A PROBLEM WITH PEOPLE PICKING UP CAKE ORDERS AND SUCH...I CAN JUST HEAR THEM COMPLAINING. THERE IS AN ALLEY RIGHT NEAR OUR SPACE

How many minutes on average does it take to walk from the nearest entrance or exit door of each hospital to your location?

VIRGINIA MASON 1-3 MINUTES, SWEDISH 5-7 MINUTES, HARBORVIEW, 7-10 MINS, MEDICAL OFFICES: 5-10 MINS, SORRENTO HOTEL: 1-2 MINS.

My gut instinct is that your estimates are  too low but understanding the specifics of your locale will make it easier to offer a more educated answer.

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[MichaelB]

Here's what I have so far:

$60.00 or 10%, Breakfast (scones, cinnamon rolls, croissants)

$207.00 or 36%, Lunch (sandwiches, salads, box lunches)

$28.50 or 5%, Snacks (cookies, bars, confections)

$132 or 23%, Desserts (petit fours, mini cakes, slices, special orders)

$151 or 26%, Drinks (espresso drinks, coffee, sodas, bottled water)

$580 TOTAL

I'm trying to be very conservative with my numbers. Am I close or way off?

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You may be right on or you may be way off. What I can tell you is that you are going about it backwards.

Start with a check average per time slot. Then determine how many covers, checks, rings (pick your lingo).

I am guessing you need to do better than the numbers you have above.

For example, if box lunches will be your big lunch time seller, I will guess a check average of $8. $207 of daily lunch sales is only 26 lunch orders. Whoever is working your lunch surge (your word) is going to be bored silly if he/she waits on 26 people (each picking up one lunch) in 2-plus hours.

Same with your breakfast pastries. At $1.50 per average, you are counting on selling fewer than 4 dozen a day? Add 2 dozen snacks at just over a buck a piece average and 3 dozen pastries at a $4 average for a total budgeted output of the pastry department of 9 dozen pieces a day! Your ovens and your mixers will hardly feel used. If this is your total expected volume, I hope you didn't buy something expensive like a sheeter.

I am being sarcastic just to demonstrate my point that you certainly expect to do more volume than your dollar sales indicate.

[lala]

On street parking is difficult, but there is plenty of parking at the hospitals themselves, so maybe you'll get people combining visits to the Doc and lunch at your place.

Have you thought about doing delivery in the neighborhood? With all those hospitals and offices so close, maybe that's an option?

Are you going to deliver samples to the bigger medical offices to drum up business? The potential is huge, I'm sure you'll do great!

[Preserver]

here is a thought.. dont know how it works in seattle.. but here in san francisco you can apply at city hall for the front of the store so you can have a 10mins parking for customers... just a thought