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Comment by notafraudster | Hacker News Reader

Napkin math:

One million Euro a year gross would imply more or less 3000 Euro a day. Open for 12 hours a day, that's 250 Euro an hour. At 15 Euro a crepe, that's a customer every 4 minutes the whole day. That would be a truly phenomenal success.

And that's gross. If you assume 50% margin on cost (insanely high) and that cost includes the apparently very high employee salaries. Then they need a customer every two minutes for the day. Let's say taxes take half of their net before taxes. they now need a customer every minute for 12 hours every day of the year to hit a million Euro net. All under a series of assumptions that are extremely generous to the firm.

It's hard to imagine that this story, if true, didn't involve an embellishment of scale.

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Here are some actual numbers from Austria for some comparable venues:

- sausage kiosk average(!) turnover 180.000 € (sausages cost 2-3€, better kiosks make several times that easily)

- small Subway €900k approx.

- average McDonald's €3.2 mil

I'd imagine a decent crepes place the size of a McDonald's in a good location could easily make €2 mil/year turnover and half that much profit in a good year.

A 50% margin on food service is unheard of. That McDonalds is making 5-9% a year most likely, which is in line with food trucks generally.

Agreeing with you:

When I worked in food service long ago, the managers claimed the goal (of a Subway chain) was 30% gross margin. But that's gross margin, and doesn't account for overhead, and thus is not profit margin.

This shop does not sell only crepes, it sells also other related things, like donuts and waffles, organic juices, and the like.

It works 24/7 with shifts and has delivery that covers the whole city.

To reach that amount, this guy worked his butt off for 3 years non-stop.

Sounds possible. He can also find other ways to make money - bake other stuff overnight and sell it to other cafe's wholesale, etc etc. I've known people who've done exactly this kind of thing. It's doable.

Crepes do not cost 15 euros... at the max 5 euros. But you misread the post; he didn't claim the guy made a million euros in a year, he just claimed 1 million, so it could have been spread over 10 years.

"At my highest peak" is meaningless to apply to a running total. It must be some period of time. A year would be implied, given the context of the conversation.

Hmm - here's how I did the back of napkin math:

1,000,000 gross in a peak year.

say business is open 290 days of the year.

avg per day = 3448 euro

if average customer order spend is ~15 euro, that's ~230 orders per day that must be made to sustain the 1mm euro gross.

So - if the biz is open 6 hours (optimized around eating times) - that would be ~38 orders/hour.

Key Questions: for the average case : is 38 orders/hour OR 230 orders/day reasonable or not?

for the non-average case: can they make 2x the orders really busy days - i.e. what is the absolute peak orders than can make in a day?

While I am skeptical as well, there are a few other scenarios that aren't being considered in your napkin math:

- Selling items other than crepes: coffee, tea, alcohol, soft drinks, snacks, etc all have great margins.

- If the place is a cafe, customers may stay and work/read and run a tab, increasing the average revenue per customer.

- Multiple customers may arrive as a group and run up a higher tab.

- Multiple locations: compounding revenue, higher reach, etc

There are probably many more things I'm not even considering.

Multiple locations was my first assumption. In fact, multiple locations, some of which had closed since the peak.

The numbers might line up a little more if there was a single brick and mortar and several carts throughout the city and assume the 1 million was gross not profit.

Do you honestly believe crepes are the only thing sold at a crepe shop?

I believe it would be reasonable to assume that the combination of crepes and whatever else is sold would work out to be, generously, 15 Euro a customer. By all means feel free to disaggregate customer orders into crepes, tiramisu, and fancy coffee if you think it makes the math better.

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