You don’t need to be a numbers person to run a profitable coffee shop. But if you don’t understand what your drinks cost to make and how much they actually earn, you’re working with a blind spot. Many café owners believe that strong sales automatically mean strong profits, but that only holds when pricing, portioning, and cost control are aligned. This chapter focuses on the core numbers behind every menu item. No complex formulas—just the simple metrics that help you see what’s working, what’s not, and where you're leaving money on the table.
Food cost percentage is the first step in understanding how profitable an item really is. It tells you how much of your selling price goes toward the cost of ingredients. For example, if a latte costs $1.20 to make and you sell it for $4.00, the food cost is 30 percent. That’s solid. Most cafés aim to keep food costs between 25 and 35 percent to maintain healthy margins.
To calculate it, add up the cost of every ingredient—coffee, milk, syrup, cup, and lid. If you don’t already track this, try collecting data for a week. You might be surprised. A drink that sells well but has a 50 percent food cost could be quietly pulling profits down. Or you may find a simple tea that’s low-cost and high-margin, but under-promoted. Once you understand your food cost percentage, you can price smarter, trim or adjust portions, and build a menu with intention instead of guesswork.
Pricing isn’t just about being competitive. It’s about being sustainable. Many shop owners look around at what others are charging and base their prices on that. But your costs, rent, and goals are specific to your business, so your pricing strategy must reflect your numbers.
Start by knowing your full cost per item, including ingredients and packaging. From there, apply a margin that gives you enough room to cover expenses and still earn a profit. For example, if a cappuccino costs $1.50 to make and you want a 70 percent margin, your price should be about $5.00. If that feels too high, you might need to review portion sizes or ingredient choices rather than automatically lowering your price.
People don’t just buy coffee—they buy consistency, presentation, and atmosphere. Customers will pay more when they feel the value. Your pricing should align with your brand and reflect the full experience you're offering. Profit isn’t about cutting corners. It’s about pricing with purpose.
Most cafés lose money in tiny amounts, many times a day. It happens when a barista adds a little extra oat milk, over-scoops the matcha, or fills a 16-ounce cup instead of a 12. It may not seem like a problem at the time, but when those habits repeat across hundreds of drinks, they eat into your margin fast.
The fix is simple: set portion standards and stick to them. Every drink on your menu should have a written recipe with exact amounts for every ingredient. Give your team the tools and training to follow those recipes. That might mean using measured scoops, pump counters, or even weight scales for key ingredients. Consistency protects your margins and your customer experience. Guests come back because they know what to expect. Portion control ensures you’re not giving away product for free and that each drink costs what you think it does. It's one of the most effective, low-effort systems you can implement to protect your profits.
Not all costs show up clearly on a receipt. Many of the most damaging ones are hidden in waste, inefficiency, and habits that go unchecked. Maybe your almond milk expires before it’s used. Maybe your cold brew is prepped in large batches, but sales don’t justify it. Or maybe you offer syrup upgrades for free without realizing how much it’s costing over time. Start paying closer attention to what gets tossed, what goes unused, and what you’re giving away. These small losses rarely seem urgent, but they add up faster than most owners realize.
Also, consider your operational costs. Are machines left on all day, even during slow periods? Are refrigerators sealed properly or overworking to maintain temperature? Are you overstaffed during quiet hours? These may not seem like menu issues, but they directly affect your bottom line. The goal isn’t to cut back so much that service suffers. It’s to bring awareness to where money quietly slips through the cracks. Tightening these areas often results in noticeable improvements, both financially and operationally, without changing a single thing on your menu.
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