Estimated reading time: 0 mins
If you want to know more about commerce, that is, how a business makes profit from trade, then think about a cafe, an example of a ‘simple’ business model.
A cafe is an example of a business with a simplistic business model. It makes profit from earning more money than it costs to provide food, beverages and associated products. But what is involved in running a cafe and how much does it cost?
Here is an excellent article that explains more: Social Business Planning
There’s more to it than might be obvious. Remember every business has had to invest in its startup, suffers from running costs and overheads, and must pay for product development and other innovations. As well as any ‘real profit’ its owners want to take out.
Understanding how small businesses earn profit is a great way to learn how much larger, much more complex businesses pay their shareholders.
4 thoughts on “Thinking about Commerce? Think about a cafe!”
An interesting view I think. Thinking about a cafe does give me an insight into how businesses make profit. I hadn’t really thought about it before.
A cafe is an example of a retail business. Do you have a similar example for a B2B business?
I ran a cafe 3 years ago and I found that most people didn’t understand why the price markup between raw ingredients and what is served is so big. Its only when I told them about the overheads this discusses does it become obvious. The biggest were business rates. Also the cost and time taken to keep a license is not appreciated, as well as the cost of hygiene. Anyone who is learning commercialism should find this a good case study…
Ref: Kim Chopra’s comment
Yes Kim I will be blogging about B2B business models at some point soon. Thanks for your comment