Industry sector:

Sandwich bar: Cash sales


'Cash sales' means all income from your main business activity which you receive at the time of sale. Although most of your sandwich bar customers will pay you in cash, remember that Cash sales can also include credit and debit card payments, as well as cheques if you decide to accept them. It can also include vouchers like Luncheon Vouchers.

To prepare your cash flow you'll need to estimate how much income - including VAT if applicable - you will receive over the next 12 months. To do this you'll need to work out how many sandwiches and any other food and drink products you're likely to sell - and at what price.

Bear in mind that your income from sandwich and food sales may not be the same all year round. For example, if your sandwich bar is near to offices and the majority of your customers are working people, you may find that sales are much quieter during traditional holiday periods like summer, Easter and Christmas. On the other hand, if you're based in a busy shopping area you may find that there's more demand during the run up to Christmas when shops are at their busiest. And of course if you're in a tourist area then you'll probably be busiest over the summer and other holiday periods.

There are a number of other things to consider when you make your estimates.

What type of sandwich bar

Give some thought to the type of sandwich bar you intend to run. Things to think about include:

  • who will your customers be - will you just aim to sell to shoppers, office workers and general passers by, or will you also offer sandwich platters and other catering products
  • will you offer a full outside catering service for functions like weddings and parties
  • will you sell pre-packed sandwiches to other businesses like newsagents, cafes and works canteens
  • where will your premises be - a high volume of passing trade is essential, so ideally you'll be located near to an area where there are lots of workers, shoppers or other passers by
  • what will your opening hours be - will you only open for the peak lunchtime trade, or will you open in the morning to catch people on their way to work and then stay open all day
  • will you open every day of the week - there may not be much demand at the weekend if your main customers are from nearby offices, but if you're based in a busy shopping area Saturday may well be your busiest day
  • will you offer eat-in facilities as well as take-away - and if so how many diners will you be able to accommodate
  • will you offer an ordering service - you could accept orders in advance by phone, text, email, a web-based ordering service or even Facebook. Taking orders in advance can help to avoid excessive queues at peak times, letting you serve more customers
  • will you offer a delivery service - if you take advance orders or sell sandwiches to other businesses you'll probably deliver to your customers in time for lunch. You may decide to take a selection of sandwiches on spec to places where you expect there to be demand - like office blocks, factories and industrial estates
  • will you be able to have outside seating - this can help to attract customers when the weather is good. Outside seating - perhaps under an awning - is also popular with people who smoke
  • will you offer wifi internet services to your customers - free wifi can help to make your sandwich bar attractive to people who want to go online over a coffee or lunch

Your products

There's a huge range of sandwich fillings, breads, and other food and drink products that you could offer. Doing some market research among your potential customers can give you a better idea of what would sell well. Think about:

  • whether you'll offer pre-packed sandwiches made in advance, made-to-order sandwiches, or a mixture of both
  • what breads and sandwich fillings will you offer your customers - will you mix your own fillings or buy them in? There are many different types of bread you could use, including wholemeal and 'low GI' breads, gluten free products, cibattas, bagels and wraps
  • what other products will you offer - there are many other foods and drinks that you could stock including hot and cold drinks, salads, hot foods like paninis, soups and jacket potatoes, desserts like cakes and yoghurts, and so on
  • will you appeal to the 'ethical consumer' by offering locally sourced, sustainable, organic and Fairtrade products
  • will you stock a range of healthy products like salads, low fat and low salt sandwiches, fresh fruit juices, smoothies and so on
  • how you will monitor which lines are popular or unpopular with your customers
  • how often will you introduce new products and sandwich fillings - while it's a good idea to introduce new options from time to time to keep your menu fresh, you don't want to replace customer favourites
  • how will you control and monitor levels of wastage

Pricing

Think about how you'll set your prices:

  • what prices do your local competitors charge - will you have to price in line with them or will you offer something different that customers will be prepared to pay a little more for
  • how often will you review your prices
  • will you offer discounts and special offers such as a 'meal deal' or introductory discounts on new products
  • if you have trade and wholesale customers, how much discount will you offer them
  • if you have staff, what will be your policy on staff discounts

Don't forget, you must be able to cover your costs, overheads and drawings.

Competition

Competition for lunch time sandwich sales is intense. You're likely to face strong competition from a wide range of outlets that offer similar products to your own, including other sandwich bars, coffee shops and cafes, supermarkets and convenience stores, petrol station forecourts and so on.

You'll also face competition from other types of take-away and fast foods like burgers, chips, pizzas, jacket potatoes and sushi. And many people prepare their own sandwiches and packed lunches at home.

This all makes it essential that your proposed sandwich bar has a 'unique selling point' or USP - in other words something special that will attract customers to you rather than to your competitors. For example, you could use locally sourced or organic products to make a range of high quality and unusual sandwich fillings. Maybe no other outlets in your area offer innovative vegetarian and vegan products.

To help with your decisions, click on the checkpoints for guidance. Once you have worked out a Cash sales figure add it to the relevant field in your cash flow forecast.