What's a good gross profit for a cafe?

Gross profit (GP) is what's left from your sales, ex VAT, after paying for what went into them. Wages, rent and energy come out of what's left, so a cafe with a weak GP has to work much harder for the same take-home.

Rules of thumb

These are ranges many independent cafes aim for. They're a guide, not a benchmark, and yours will depend on your menu and prices.

• Coffee and hot drinks: 75 to 85%. The ingredients are cheap per cup, so coffee usually carries the margin.
• Food made in-house: 60 to 70%. Toasties, sandwiches and breakfasts cost more to make and take more time.
• Bought-in cakes and bakes: often lower. Someone else's margin is already in the price, so check each one.

Your overall GP is a blend

A cafe that sells mostly coffee will have a higher overall GP than one that sells a lot of lunches, even if both price well. So compare each group with its own target, rather than chasing one number for the whole menu.

Find what's pulling it down

• Sort your items by profit, not just by how many sold. Your best seller may not be your best earner.
• Check large sizes and extras like oat milk, which often make less than you'd think.
• Look at waste. Cakes left at close and milk poured away come straight off your GP.
• Re-cost when a supplier price changes, not once a year.

Work out any item in the free GP calculator, or let Quokka show the profit on every item and every day from your Square sales.