Frozen Custard Store
As you can imagine, the frozen custard store profit potential can vary widely.
If you’re running a small walk up store from May to November you’ll have markedly different costs and sales numbers compared to a store that sells hot food and coffee along with frozen custard all year around. Typically, the larger the store and more complex the menu, the higher your costs and revenues.
Sales and costs are very difficult to estimate. Our free guide to open a success ice cream store will help provide some guidance on how to estimate these costs. Simply put, the better the location and the more complete the menu, your costs and your sales will be higher.
The (not so) secret in the restaurant industry is that once a certain sales volume is reached, profits grow very quickly. The trick is getting to that volume.
Examples of Frozen Custard
Store Profit Potential
|Customers Per Month||4,500||6,000||10,000|
|Average Ticket Sale||$5.00||$6.00||$7.50|
|Food Costs (30% of Sales)||$6,750||$10,800||$22,500|
|Labor Costs (28% of Sales)||$6,300||$10,080||$21,000|
|Gross Profit Potential||$9,450||$15,120||$31,500|
Points We Need to Make Regarding
the Profit Potential Examples Above
- Typically, labor costs will not rise proportionally with sales. Each incremental sale will not result in more hours worked, but better utilization of labor until a threshold is reached and more staff are hired.
- In these examples, for every $1,000 sales increase, profits increase by approximately $400.
- The importance of location can be seen by the profit increases as volume increases, even if rents go up significantly.
- In smaller stores, much of the labor costs will be paid to the owner as a salary.
- Naturally, with our consulting we can achieve points 1 through 4!
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