Have you ever walked into a business and thought: “I wonder how much money they make?”
It’s a natural curiosity to have. Wanting to quantify another’s efforts & talent into one clean number to determine if they’re successful, interesting & exciting compared to ourselves.
On the flip side. Being a small business owner is lonely. In the still of night it can be a cocktail of anxiety, stress, worry & joy. Many don’t have immediate colleagues or peers to openly share the journey. A professional network only exists if you diligently build & maintain it yourself. With a small inner circle, many business owners wrap a veil of secrecy around matters such as revenue, costs, net profit, debt, and the like.
As a result, small businesses don’t tend to share their annual performance results like large businesses do. Potential exposure to vulnerable feelings such as inadequacy, fear, or the risk of being perceived as self-promoting or showboating prevent many owners from sharing information externally. What if people think I earn more than I actually do? What if my earnings don’t match my efforts?
The big end of town shares its annual results with its shareholders & investors, its obliged to. But why shouldn’t a small business share with its community & customers if the intentions are true? After all, community & customers are the ones who drive all our success. Why shouldn’t they know what they do for us if shared authentically? Personally, I’d love to know that my repeated custom is translating into success for a small, local business. Better yet, I’d be touched if they told me how they’re doing.
Success in the street coffee category is in direct proportion to three core things. The quality of your offering. Consistency applied. Tenacity shown in the face of adversity. I’m sure there’s others, but these three jump out at me.
Making specialty coffee outside in a cold climate country takes physical & mental toughness. Imagine a hairstylist cutting hair in the wind, or an artist standing on a block of ice for 8 hours while they sculpt. Try making meaningful conversation with a customer while your frozen hands struggle to gauge the perfect milk temperature. Try dialling in ten times a day due to fluctuating humidity & temperature. It takes fortitude.
Along with its unique operating challenges, street coffee is a different financial animal to brick & mortar cafes.
Rent, rates & utilities virtually don’t exist. The payroll is leaner. Product wastage is a non-issue. However, earning capacity can be dramatically influenced by physical space limitations, the weather, environmental factors & mechanical breakdowns. We win in some financial categories, we lose in others.
Dear Coco Street Coffee operates a fixed location model. In that we don’t drive around to multiple sites, we stay in one spot. We set out to create a premium, elevated street coffee experience along the picturesque Strand on the Green in West London. Therefore, we occupy the same riverside pitch day after day, 5 days a week. We have become the local & river walking community’s home for specialty coffee. We are embedded in the community, even though we roll away at the end of each trading day.
We’re approaching 2 years of offering an experience to customers underpinned by sheer willpower. We trade rain, hail or shine. Our customers know that if they step out their front door and it’s raining or snowing, we’ll be there! Consistency and an unwavering commitment to endure have been the bedrock to building a successful, sustainable business. If there’s ever any question whether or not we’ll be there, the customer won’t take the risk – off to their favourite brick & mortar café they’ll go. We have to be there when we say we will! Period.
So, there we stand on the street in -6 to 38 degrees celsius, selling Australian-inspired specialty coffee, bakes & little sweet shop. It takes grit & grace in equal measures.
But how much money can a small converted Piaggio Apé coffee van make? It’s a tiny business. We’re a single barista operation during the week, with a barista assistant added on weekends. We have a single group La Marzocco Linea Mini and very limited retail & storage space.
How much we make is the question on many people’s minds. Very few people ask, but many would want to know. In nearly 2 years, one elderly gentleman has been the only brave soul to ask – but only so he could discredit the large investment I made in having mains power installed at our pitch location. He was reassuringly quiet when I told him how much revenue such a small business generates. I won’t lie, that felt pretty good.
It’s well publicised what a healthy brick & mortar financial model should look like. But what about a street coffee business with its differentiated trading, cost and net profit model?
Just because someone opens a coffee business doesn’t mean they have it all figured out. Owners need industry people to lean on for information & insights. So why not try to add value to the category when none of us are actually competitors?
So, in that spirit here I go.
At the risk of feeling inadequate, scared, self-promotional or a showboat… here is an all-access look at the Dear Coco business results for the last 12 months.
Please use these results to determine if we’re successful, interesting & exciting. All I’ll add is I’m exceptionally proud of what we’ve been able to deliver, amongst continuous headwinds and a full-time International Marketing Director career for one of the world’s largest brands running concurrently.
With this information you’re now part of my trusted inner circle, friends. I hope this open look into our business adds some value.
Trading Period: 1 January to 31 December 2022 (trading 50 weeks, 5 days per week)
Total Revenue : GBP £144,560 (USD $177,000, AUD $265,000, EUR €165,000)
Net Profit: 40% (versus a more typical net profit of 5-10% for brick & mortar cafés)
Operating Costs: 60%
Operating Costs Breakdown (as % of Total Revenue):
- Barista wages (we pay Head Barista rate): 19%
- Coffee (incl retail bags, oat milk, chocolate): 13%
- Bakes: 7%
- Milk: 3%
- Disposables: 3%
- Rent (Street Trading Licence Fees): <1%
- Miscellaneous Costs: 2%
- Value Added Tax (not applicable on all products): 12%
- Marketing: 0%
Debt level: GBP £0
Key Product Profit Margins:
- Flat White (specialty coffee, double shot @ £3.20): 82%
- Bakes (@ £4.20): 53%
Revenue Sales Split:
- Coffee: 80%
- Bakes: 18%
- Little Sweet Shop: 2%
Milk Sales Split:
- Dairy milk: 78%
- Oat milk: 22%
Most popular coffees:
- Flat White: 29%
- Latte: 19%
- Cappuccino: 16%
- Mains power installation along street: £5,800 (plus my soul in bureaucracy)
- Followers: 7,760
- Top Countries: United Kingdom, United States, Australia, Mexico, Indonesia.
And last, but not least, Named Top 5 Global Coffee Truck by Barista Magazine.
Dear Coco was built as love letter to owners Anthony & Emma’s 6 year old daughter, Coco. Their teenage daughters are involved in the business, however given the age gap, Coco tends to get left out. So the business was named after her to make Coco feel included too.
Dear Coco serves specialty coffee, bakes & little sweet shop from a beautifully converted Piaggio Apè along the River Thames in West London.
Find them opposite 85 Strand on the Green, London W4 3NN, from Wednesdays to Sundays, 8.00am to 3.00pm. And on instagram at @dearcocolondon.