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# How do you go about working out the revenue of a Starbucks store, from coffee only?

Market sizing Market Sizing Beginner Level Revenue analysis
New answer on Feb 29, 2020
5.9 k Views

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Hello,

I would use the following approach:

1. Identify the bottleneck of the service (e.g. number of seats or cashiers)
2. Divide the day into different time slot
3. Make an assumption of the occupancy for each time slot
4. Calculate the volume of customers
5. Revenues = Customers x average expenditure

Be careful to make clear the boundary conditions of the case (Are you talking of a standard working day or weekend?Which time of the year?Do we do any delivery service?)

Best,
Luca

Hi,
1. calculate traffic per day in the store (use the bottleneck of seats or cashier)
2. percentage of customers that order coffee
3. average selling price per coffee

Best,
Antonello

Hello!

Classic market sizing question, all comes down to P x Q.

• Q (i.e., quantity of cups sold):
• Estimate number of hours in which the store is open
• Calculate the traffic in each of the hours (doing it in groups, such as high, medium and low traffic).
• P (i.e., average price): Given the classic 3 sizes, estimate in your currency an average price per coffee cup.

Hope it helps!

Cheers,

Clara

Hi,

You should assume the traffic (av wait time in Starbucks) at different times of the day.

Make an assumption of how many of them drink coffee and how many cups

That's it

Best

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