Do you want to know how much money juice bars make yearly? If YES, here are 8 factors that determine the income & profit margin or juice bar business owners. Whenever an entrepreneur wants to start a new business, one of the first questions that they usually ask is how much they are likely going to make yearly from the business.
This narrative also applies to entrepreneurs who are looking towards starting a juice bar business. They would want to know how much they are likely going to make annually from their juice bar.
The truth is that there is no one-mold-fits-all when it comes to how much a juice bar is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average juice bar can make yearly and these factors are;
8 Factors That Determine How Much Money Juice Bars Make Yearly
Table of Content
- 1. The Size of the Juice Bar
- 2. The Location of the Juice Bar
- 3. The Type of Juice and other Products Retailed in the Juice Bar
- 4. Other Related Products and Services Offered by the Juice Bar
- 5. The Management Style of the Juice Bar
- 6. The Business Model of the Juice Bar
- 7. The Advertising and Marketing Strategies Adopted by the Juice Bar
- 8. The Number of Years the Business is in Existence
- Estimated Profit Margin for a Juice Bar
- a. Recurring costs
- b. Mortgage or lease payments
- c. Insurance
- e. Wages
- f. Payroll taxes or self-employment taxes
- g. Equipment lease payments
- h. Utilities
- i. Credit card processing fees
- j. Repairs and maintenance
- k. Marketing
- l. Legal and professional fees
- m. Miscellaneous expenses
1. The Size of the Juice Bar
One cannot conveniently state the amount a juice bar is expected to make yearly if you do not know the size of the bar. The amount a mom and pop juice bar is expected to make annually will be far different from the amount a standard juice bar franchise will make annually even if they operate in same location.
Of course, the amount invested in a small juice bar is different from the amount invested in a large bar hence the amount they will both make will be different. One the average, the approximate cost of starting a juice bar could be between $5,000 and $500,000 and even more depending on what you want to achieve.
2. The Location of the Juice Bar
When it comes to setting up a new business, location plays a major role which is why feasibility studies and market survey are essential. For example, the amount a juice bar that is located in a low traffic area will make yearly will be far low compared to the amount a juice bar that is located in a high-traffic area will make.
So, if you want to make it big with your juice bar business, then you must be ready to rent a facility in a high traffic area, a location with the right demography of people with the purchasing power.
3. The Type of Juice and other Products Retailed in the Juice Bar
Another important factor that will determine how much a juice bar is expected to make yearly is the type of juice and products retailed in the juice bar. You will agree that there are juice bars that retail organic and non-organic juice including acai bowl and smoothies. The profits you are expected to make selling these juices and smoothies will sure be different when compared to the amount a juice bar that sells limited merchandise.
4. Other Related Products and Services Offered by the Juice Bar
Aside from retailing a wide range of fresh fruit juices, smoothies and acai bowls, retailing products such as pizzas, salads, coffee, beverages, soft drinks and water will surely boost the amount you are expected to make from your juice bar.
5. The Management Style of the Juice Bar
Another key factor that will determine the amount a juice bar is expected to make yearly is the management style of the bar. Trust me, the results you will get when you have a good manager and an average or bad manager managing same type of business will definitely be different. Even if you give the managers same conditions to work and same products to retail.
6. The Business Model of the Juice Bar
There are different business models that a juice bar can adopt and these business models offer different results. For example, the amount a juice bar that also does online deliveries make yearly will be different from the amount a strictly brick and mortal juice bar will make yearly. The amount a juice bar that also sell and operate franchise will make yearly will be far different from the amount a strictly one location walk-in bar will make.
7. The Advertising and Marketing Strategies Adopted by the Juice Bar
Another key factor that will determine the amount a juice bar can make yearly is the advertising and marketing strategies adopted by the bar. There are several advertising and marketing strategies that can help a business increase their earnings.
The results you will make will far outweigh the amount you spent on advertising and marketing. Of course, you don’t expect a juice bar that engages in aggressive advertising and marketing to make same amount yearly with a juice bar that is passive with its advertising.
8. The Number of Years the Business is in Existence
Lastly, another key factor that will determine the amount a juice bar is expected to make on a yearly basis is the number of years the business is in existence. In business, the number of years you are in existence will determine the amount you will make.
For example in your first fiscal year (FY1) you might make a hundred and twenty thousand dollars ($120,000), in your second fiscal year (FY2) you might make two hundred and twenty thousand dollars ($220,000) and in your third fiscal year (FY3) you might make four hundred and fifty thousand dollars ($450,000). Interestingly, most businesses usually break even from the third year of operation.
In conclusion, the amount a juice bar will make yearly is strictly dependent on the factors listed above. Usually, a small-scale but standard juice bar that is located in a high-prone human and vehicular traffic location in the United States of America will make on the average between $100,000 to $600,000 annually, all things being equal.
Please note that, if you are using a real cold-press like a Goodnature X-1 or X-1 Mini, you will be getting high yield and you can expect that 1 lb of produce will make about 10 fluid ounces of juice on average.
Estimated Profit Margin for a Juice Bar
Generally speaking, a juice bar can make about a 50% – 70% gross margin (profit before labor and overhead costs) if careful planning is done. In order to properly calculate the profit margin from a standard juice bar, then you should be able to place a figure on the recurring and ongoing costs of running the juice bar.
a. Recurring costs
They are the consistent expenses you’ll be seeing as your business grows. These are your day to day, month to month, and year to year costs of normal business operations. You can’t avoid them, so make sure to take the applicable ones into consideration.
b. Mortgage or lease payments
Whether you rent or buy, you’ll have monthly payments to keep the doors open. Costs will vary greatly, but make sure to factor them into the budget.
Insurance is calculated in annual premiums, though you may be able to split the payments by month. The average cost is $300 to $700 per year. As the owner, another potential factor is the provision of health insurance.
Compliance permits often have renewal fees. Be sure to check with your council office for specifics.
Depending on your Business model, you may be paying a salary to each of your employees. You could very well operate on a commission-based model. This cost will range according to your employee payment structure. Also keep in mind that you, the owner, should be taking a salary too.
f. Payroll taxes or self-employment taxes
These fees accompany your wage expenses and will also vary according to your business model. Make sure you consider your employees’ particular situation, as well as your own, to determine the taxes you’ll owe. Keep in mind, these taxes often need to be paid quarterly. Self-employment taxes will amount to around 7.6 percent of individual sales.
g. Equipment lease payments
If you choose to go the route of leasing your juice bar equipment, factor these monthly costs into your budget. They will vary depending on your particular lease agreement.
Electric, gas and water bills will vary by the kind of equipment your juice bar is running. Expect $640 to $4,000 per month here. The high-end more accurately reflects juice bars with multiple big screen TVs, lighted decor and various other energy-guzzling pieces of equipment.
i. Credit card processing fees
Here’s a potentially sneaky expense. As a modern business, you’ll want to accept credit card payments. Standard industry base rates for processing fees range from 1.5 percent to 2 percent. But many juice bars end up paying more than 3 percent, so be careful and shop around for your provider.
j. Repairs and maintenance
Normal wear and tear takes its toll and equipment often breaks. You’ll need to factor in the costs of routine maintenance. Expect up to $500 per month.
You’ll need to get the word out about your operation to drum up clientele. There are a number of avenues you can take (print, broadcast, web, social advertising), all with different price tags. You could spend as little as $20 for an email marketing solution or upwards of $4,100 for more robust advertising campaigns.
l. Legal and professional fees
This is a fluctuating expense, as it depends on your particular business model. Just keep in mind that professional services such as accounting or legal typically run about $200 an hour.
m. Miscellaneous expenses
You never know what problems may arise. It is always a smart idea to budget in some funds for miscellaneous expenses. We suggest at least $500 per month.
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