Here is an example of how DJR Jeeves Consulting can help your business from an operations standpoint.
In the chart below you will see monthly sales and gross profit for a coffee shop over the course of a year. Gross Profit is your Sales less the direct cost of your sales.
Here is what I can tell you:
- Gross margin appears to be consistent (Gross Profit/ Sales)
- There is some seasonality to your business
- Dip in September
- Spike in December
Perhaps the sales decline in September is because your store is closed for one week, and in December everyone wants that holiday shopping coffee. I will plot the numbers and you tell me about your business. By discussing your metrics we can find the root cause of poor performance and superior performance.
Looks like someone has a case of the Mondays! Why on earth would a coffee shop’s gross margin be lowest on a Monday? You would think that all coffee drinkers a would need that caffeine boost to kickoff their week. Let’s dig some more.
Here are the items that you sell and their respective margins in ascending order: Regular- $1.77 Latte- $2.67 Special- $3.60
I think I can help you out in this case. Looks like you are not selling that special coffee on Mondays. Why is that? Either the special coffee that you make on Monday isn’t so special, or you have to bring back the special if you took it off the menu.
Contact DJR Jeeves Consulting today so we can review your metrics.