In the pasta box franchise case study, we overestimate a sales penetration of 10% of the population of a place buying once a month.
This example was greatly simplified because, in the previous article, we were focusing on the arithmetic of the rate of return on investment in relation to the potential of a region.
Now, let's think about the most objective metrics:
- In terms of people, how many at least must live in a certain place to reach the viability threshold?
- What is the target age for consumption, is your product focused on children, young people, adults, the elderly?
- How do purchases take place, at home or outside?
- Does the family consume together or individually?
Let's imagine a crepe network with a semiautomatic operation, with simplified and automated processes.
Crepes are not part of the traditional recipes of the Brazilian family, so they are associated with special moments or small indulgences, escapes from everyday life.
Even so, it is not conventional to expect crepes to be consumed at high frequency, but when consumption occurs, it involves encounters between two or more people.
Let's think about an investment of 90,000 reais in a street store, with an estimated monthly revenue of 40,000 reais.
Let's suppose that the network operation has a margin of 20%, that is, 8 thousand reais a month.
Considering the unit value of crepe at 10 reais, we are talking about almost 200 crepes per business day.
This alone explains to us that the store must be in a region with a high flow of people, being able to meet demand well at two peak times, lunch, dinner and deliveries.
It is to be expected that consumption is not limited to just one crepe, and may include drinks and dessert.
Let's imagine an order for 3 people with a per capita consumption of 30 reais, that is, 90 reais.
Assuming that the operation is very well accepted in the region, the consumption frequency is 1.5 purchases per month.
A revenue of 40 thousand reais, divided into single orders of 40 reais, is equal to one thousand orders per month.
Crepes are a product consumed by young people and adults, so let's disregard children.
In this region, there should be 660 returning customers.
Returning to the logic that crepes, however tasty they are, will still compete with all other operations, such as sushi, pizza, hot dogs, hamburgers, pasta, snacks, it's not enough for a place to have 660 people residing or going around, more is needed.
How much more?
This will be due to the penetration of the target audiences, which we have already established in young people and adults.
Now let's estimate the consumption frequency at just 5% of the target population, which results in 13,200 (660 x 20).
This number is quite reasonable to find, which explains the expansion of crepe networks to smaller cities, where operating costs are lower.
See the analysis conducted by Everton Henke of a brand that has been growing very fast.