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Are you looking into making an investment in the coffee business and wondering how much cafe owners actually make? This definitely was a question in our head when we started in the coffee business as well. In Australia, the annual cafe owner salary averages between $50K and $300K. “Well, it is quite a big gap”, you might think. But the good news is, getting a steady income the cafe is accessible no matter the size of your business, and we have put together a list of all aspects that can influence how much you will make in relation to your coffee shop turnover.
Operating a coffee shop is a lucrative business that brings a lot of potential gains for beginners. And what makes it even more attractive is the still ever-growing consumer coffee market in Australia. For example, the growing number of coffee shops in Australia has been estimated to reach 10,000 by 2020.
In comparison, it has actually been 11,147, which is more encouraging despite the COVID-19. So, let’s break down how much cafe owners make in Australia before you invest your money in a coffee shop.
According to the Australian Tax Office, the net income of the coffee shops is 10% to 17% of its sales. If you’re an average cafe with
nominal rates, you can earn 10% of sales. While with a good coffee shop, more strategically, you can make 17% or even above.
So, keeping the statistics by ATO in view, your net profit for the sales against a mid-sized, organized café will be :
| Average Sales | Expenses | Profit % | Net Profit |
| $157,500 | 83% | 17% | $26,775 |
| $425,000 | 88% | 12% | $51,000 |
| $600,000 | 90% | 10% | $60,000 |
Thus, being a coffee shop owner, you can make between $26,775 to $60,000. However, this educated guess is about the median caoffee shop.
Here, you don’t find any definite estimate about the coffee chains and self-managed cafes. Therefore, you can move from that 10% to 17% if you work on your plans to decrease your expeditures and cafe model.
Using our more than 10 years of experience in the coffee industry, we have previously created a post with 5 pieces of advice for coffee shop owners. If you are starting now, you might want to check it out. And also, of course, our calculations about cafe owner salary haven’t ended there…. Let’s see how several factors can affect your coffee business primarily.
The main factors that contribute to your business success are the number of sales and the receipt totals. Your focus as a cafe business owner should be to make sure that both are increasing. One good strategy to increase sales as well as overall income is Upselling. Our marketing expert has put together a plan on how to use this tool (upselling) to increase your store’s overall sales and profit. You can check it out as well.
If you do a local research, you will see that average prices of Specialty Coffee in Coffee shops are pretty much the same. Ok, so you can’t charge much more than AUD$5 for a latte. How about introducing some more creative coffee-based beverages that no one else serves yet?
Being creative and coming up with new product ideas can incredibly affect your money flow and enhance your coffee shop turnover in Australia. So, being creative, you can reach that 17% or higher.
Besides your creativity in the menu, your creativity with your operations and control over the coffee bean supply will ensure the quality and save you money. Similarly, your branding can also help you expand your prices without losing your customers’ loyalty.
We always emphasize choosing the right location…. Why? Well, most coffee shops are not a destination, but a convenience business. Your coffee shop needs to be in a strategic location to get enough walking traffic to sustain your business. On the other hand, it’s obvious that where there is too much competition, survival can be more challenging. So, your location can directly affect the number of sales you generate.
For instance, if you are able to find a location with high traffic but a significant supply and demand gap, that is the sweet spot. If you need help finding the best location for your business, here is a quick guide to help you.
Your business plan can turn the whole table. As we talked about it earlier, by cutting on the expense, you can make more — the cafe manager or chef’s salary can add to your net gain. Likewise, here is how you can expect to make more.
You can generate $500 to $2000 without hardly getting one helping hand as a stand-alone cafe. Let’s say you make $500 a day with the $15,000 per month being open 7 days a week.
Thus, you’ll complete a year with an average of $180,000 as a stand-alone business with less expanse. It’s helpful….!!!
On the other hand, having got enough investment by launching a cafe chain, you can hope to get a 10% minimum of your net profit from each franchise. It’s the case yur each franchise gets you 10% of the revenue. Thus, again you’ll be among those luckiest cafes, which make up to $250,000 to $300,000.
In contrast, as a medium or big cafe, you’ll have to spend a significant amount of money on staff. Consequently, it’ll leave you with only an income of 10% percent or a bit higher.
You can make between $50,000 and $300,000 as a cafe owner salary if you own a coffee shop in Australia or a chain. Detailed planning, the right choice of products, efficient staff, and branding can help you go one step ahead. To be a coffee shop owner is rosy. It’ll benefit you monetarily.