The Napkin

how many customers a day does it take to stay open?

your numbers, in ringgit

what you charge, per sale

what each sale costs you

what the month costs whether or not anyone comes

days open a month

hours open a day

Say you charge RM25, each one costs you RM10, and the month costs RM18,000. You need 47 customers a day, or one every 13 minutes.

That's 1200 a month, each one leaving RM15 behind for the bills.

47 of these through the door, every day you're open

the yellow is 13 minutes of each hour

Markup 150%, margin 60%. Same RM15, two different sums.

and the two numbers this tab needs

what you'd put in

months until you'd want it back

For RM60,000 back in 24 months, this place needs 53 customers a day, not 47. That's RM2,500 a month on top of the bills, or 6 more people through the door each day.

That's what would have to be true. Whether it is, the napkin can't tell you.

RM25 a sale, RM10 of cost in each, RM18,000 a month whether or not anyone comes, 26 days a month, 10 hours a day. RM60,000 put in, wanted back in 24 months.

These are sums on your own guesses, nothing more. It isn't financial, investment, tax, legal or accounting advice, and it knows nothing about your business, your street or your landlord. Before you put money into anything, ask someone qualified who can look at your real numbers.

try a made-up one

Every receipt here is invented to show the sum. Not any real shop's numbers.

read the post

Two things the napkin keeps apart

Markup is not margin

Say a plate costs you RM10 and you sell it for RM25. The RM15 you keep is 150% of the cost: that's markup. It's also 60% of the price: that's margin. Same RM15, two sums, and people mix them up in both directions. A "50% markup" leaves you a 33% margin. A "50% margin" needs a 100% markup. When someone quotes you one, ask which.

The scary number is the rent

What a sale costs you only shows up when someone buys. The rent, the salaries, the licence and the lights show up on the first of the month whether anyone comes or not. That's why the napkin asks for them on their own line: they set how many customers you need before a sen of the month is yours, and a quiet week doesn't make them smaller. The markup decides what each customer is worth. The fixed costs decide how many of them you need.

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