Article Details

The 30/30/30/10 Model.

Published Date: June 28, 2023

Are you looking for a simple framework to gauge and monitor your cafe’s operations? If that’s the case, consider the 30/30/30/10 model – a simple method employed by lots of cafe owners. This approach offers a direct means to allocate measurable percentages for the essential components and core expenses of cafe operations.

While there is a lot more to measuring and tracking your operations, using this ratio as a guide will help, particularly if you are an established cafe owner struggling to get on top of the figures or a startup wanting to know where your money will go when you open and what you should aim for as a basic ratio of costs and profit.

This ratio is just a guideline; it doesn’t take into account your unique circumstances. It’s not necessarily how your cafe should or will operate on a daily basis, but it gives you a guideline to use as a base model to navigate some of the fog and confusion around costs and profits, (remember, we are here to work with you in fine-tuning the numbers so that they are tailored to your business.)

How it works.

In the cafe business, each establishment has its unique characteristics. Visualising examples of how your cafe could align with a proven framework is helpful. Typically, Overheads, Labour, and COGS each account for 30%, allowing up to 90% allocation to essential areas. The aim is to increase profit by lowering other costs, with a common 10% profit margin in the cafe sector.

Optimizing costs within the 30% allocations, such as reducing Labour to 28% and COGS to 26%, can boost your profit margin by 6%. Achieving this takes time; it is not an overnight process. Consistently balancing and monitoring expenditures and income is crucial to prevent costs from eroding your profits.

Not confident in the numbers? Give HospoSure a try.

Understanding the numbers can be one of the trickiest parts of running a business. Most cafe owners didn’t enter the hospitality industry because they wanted to do maths so, depending on where you are in your cafe journey and how familiar you are with statistics, even thinking about the numbers might make your eyes glaze over! We totally get it.

No need to worry – we’ve got something pretty handy for you: Hosposure. Hosposure is our in-house cloud-based planning and modelling tool. It breaks a complicated process into achievable steps and takes the guesswork out of the figures, making it easier than ever for startups and established cafe entrepreneurs to gain in-depth knowledge and control of their cafe’s figures and functions.

By using imported cafe-specific templates and following online guides and coaching notes, you can get the necessary answers in as little as three hours! Afterward, there will be some fine-tuning, but essentially, Hosposure eradicates guesswork, eliminates never-ending spreadsheets, and simplifies the time-intensive cafe costing process. It provides precise insights into your COGS, Overhead, Labor, and net profit margins. Remember, while analyzing balance sheet data is crucial, comprehending the journey to that point is essential to plug any gaps in your business strategy. HospoSure is designed to provide this valuable insight.

Are you a cafe startup?

You can either use Hosposure on its own or opt for coaching separately. However, combining Hosposure with coaching can significantly enhance your knowledge and boost your confidence, particularly if you’re currently in the midst of planning and designing your cafe, its menu, and essential functions. If this aligns with your needs, start by creating a HospoSure account (every subscription includes a free online tutorial) and then if you need more help you can always schedule a HospoSure Support session to keep you going. You can now also apply to be a Foundation Member which gives you the opportunity to use the platform FREE for 6 months. Find out more here.

We have a 100% success rate in improving cafe finances, but we know that YOU need to know how to improve your finances, so we start with the basics and work our way up until you have complete understanding and enough knowledge and confidence to manage any future processes with or without our support.

The experience will be personalised and holistic; you’ll be involved in the entire learning process, and everything will be tailored to your circumstances and needs.

Between Clever Cafe Ecosystem, Hosposure and accessible expert coaching, we’ve got you covered.