How do you estimate the 1 year annual sale of a small corner coffee shop?

Market sizing revenues
New answer on Nov 22, 2021
4 Answers
Anonymous A asked on Nov 17, 2021

As per question - given that the shop sells bags of coffee beans, on subscription around the UK.

can I estimate the market size of the UK coffee beans subscription business (# of customers * subscription price per year), then assume a certain % of market share that this small coffee shop will take (considering it's likely a monopolistic market)?

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Anonymous replied on Nov 18, 2021

Agree with the other coaches - top-down (i.e. demand-sided) approach won't lead to any robust estimates. I can't think of a way how you could reasonably assume a market share of a tiny corner shop in a highly crowded market. 

Hence, in a case like this where you have a small operation with a clear bottleneck (which is the capacity / throughput of the store), it's always advisable to take a supply-sided approach, which works along the lines of the following: 

  1. Identify the bottleneck (→ likely how many customers the cashier can handle)
  2. Estimate a reasonable volume based on utilization / throughput (e.g. avg. interval of customers coming). Make sure to account for opening hours and peak vs. non peak times.
  3. Estimate avg. consumption (spend) per customer, based on the product offering of the shop (most customers in coffee shops won't buy beans!)
  4. Compute revenue based on above spend and volume.

Feel free to PM, if you'd like to learn more about how to approach estimates from both the demand and supply side and when to apply which. Happy to help.

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Anonymous A on Nov 18, 2021

Hi there, I'm struggling to see whether there is a clear bottleneck if we assume that this store mainly drives sales from bags of coffee beans which they sold on subscription around all of UK (i.e online coffee beans delivery business with a subscription model, instead of selling coffees over the counter) - if we assume that monthly subscription of £30 per bag and it'll be sent over to you every month. - they'll be delivered to you as long as it's in the UK. Any thoughts are welcome.


Content Creator
replied on Nov 17, 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut


I think in this particular case, doing a top-down is very difficult. How can you know before hand how big the market is for these type of stores? And what about the average share one single store has?

Instead, I would try a bottom-up approach, for which you also need to be very proactive with your questions to the interviewer: 

  • How many blocks does that coffee shop service?
  • Does it service only the neighbors, or also tourists and people who work near by?
  • How can we estimate the average ticket per person, with the knowledge we have about the shop itself and our own experience?

Given that market sizing cases were the topic of many questions in this Forum, I developped a market sizing case, that you can find for free in PrepL´s library

Let me know if you have any doubts with it, it contains a detailed explanation and methodology about how to solve this specific example, but you can extrapolate to many other market sizings!

Hope it helps!



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Content Creator
replied on Nov 17, 2021
BCG | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Hi there,

Do you know the size of the UK coffee bean business?

Or the % market share of a single coffee shop?

I don't!

Please don't just randomly guess things based on approaches you've seen before…you need to estimate based on your knowledge of the world.

Top-down makes no sense at all here. Try a bottom-up approach here (hours of operation in a day, # of cashiers/baristas, orders per hour, spend per purchase, etc.)

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CoachingPlus Expert
replied on Nov 22, 2021
# 1 Rated Bain Coach | EY-Parthenon | Roland Berger | FIT | Former Head Recruiter | Principal

First: no this is not a monopolistic market. You may be the only player in the channel with that model, but is far away from being a monopoly, as you can cross the street and easily grab a bag of beans in the supermarket.

Second: the prompt is confusing. It is difficult to understand if this is really a small shop or not, as they deliver all over the UK. Do they promote themselves all over the UK? Does it matter at all that they are a “small corner shop”, aren't they just an online store? The comment on being monopolistic is supposed to mean that they will have 100% of the subscription market? So I'll give a tentaive answer, but would feel much more comfortable if the prompt was a bit more clear.

How to estimate: since your market is the whole country, then you have to go top-down. Other coaches missed that this is an online store/online sale.

I will assume that the focus would be on the home user (i.e., not small / medium sized companies). Otherwise would have to do things differently.

Population * % belonging to segment^ * % buy coffee bags * % buying online * % would pay for a yearly subscription^ * quantity ordered per year ^^^ * price

I would 

^You can have segments such as heavy user and regular user based on consumption level, but don't make the mistake of considering those who don't consume much as they will not buy a subscription.

^^The trick here is to understand what is the advantage of the subscription and how strong it is.

^^^quantity ordered based on the specific segment profile.

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