Campus café: does a small market share make it viable?
A fictional founder plans a campus café. The pitch says a tiny market share is enough. Your role is to translate that claim into contribution, operating break-even and cash recovery.
Original Finance Circle café scenario with fictional Canadian figures, distinct from Bain’s published Coffee Shop Co. case. Bain is the related-source publisher, not the case author.
Independent Finance Circle learning material. The source organisation does not sponsor, author or endorse this exercise.
Clarify. Structure. Calculate. Defend.
Take 2 minutes to clarify the decision and definitions, 3 minutes to structure the analysis, then work the exhibits. Finish with a concise recommendation and answer a follow-up. The time is a suggested practice format, not an employer requirement.
Clarify before solving
What are the data basis and reporting boundary?
Original Finance Circle café scenario with fictional Canadian figures, distinct from Bain’s published Coffee Shop Co. case. Bain is the related-source publisher, not the case author.
Which assumptions can I use without requesting more data?
CAD. Average sale 6; variable food, cup and processing cost 2.40 per sale. Annual fixed operating costs 180,000. Opening investment 120,000 at time zero. Open 300 days a year. Base 200 sales per day.
What decision am I expected to support?
At 150 sales per day, calculate annual operating profit. Calculate annual transactions and minimum daily sales needed to recover both fixed cost and the opening investment within year one.
Build your structure
- Location-level transactions and unit contribution
- Operating break-even versus full recovery
- Cash payback and demand downside
- Competition, funding and testable launch gates
Use the branches that matter to this decision. A memorised framework is less useful than explaining why each analysis could change your recommendation.
Everything you need to work the case.
Assumptions & boundaries
- CAD. Average sale 6; variable food, cup and processing cost 2.40 per sale. Annual fixed operating costs 180,000.
- Opening investment 120,000 at time zero. Open 300 days a year. Base 200 sales per day.
- Ignore tax, discounting and working capital. Market-sizing assumptions are not verified demand.
Café assumptions
| Driver | Value |
|---|---|
| Average sale | $6.00 |
| Variable cost / sale | $2.40 |
| Annual fixed cost | $180,000 |
| Opening investment | $120,000 |
| Operating days | 300 |
| Base sales / day | 200 |
Choose the responsibility. Solve the decision.
Each level uses the exhibits above and asks a different question. Your entries stay in this open page only; copy your work before leaving.
Build operating break-even.
Calculate contribution per sale, annual operating break-even transactions and minimum whole sales per operating day.
Why round daily sales upward?
Numerical checks compare your arithmetic with the case model. Written recommendations are self-practice and are not automatically graded.
03 · Reveal worked solution & decision guide
Expected numerical answers
- Contribution per sale
- 3.6 CAD
- Annual break-even transactions
- 50,000 sales
- Minimum whole sales / day
- 167 sales
Work through the calculation
- Contribution = 6 − 2.40 = 3.60. Annual break-even = 180,000 / 3.60 = 50,000.
- Daily threshold = 50,000 / 300 = 166.6667, rounded up to 167.
A strong concise response
My calculation shows that contribution per sale is 3.6 CAD; annual break-even transactions is 50,000 sales; minimum whole sales / day is 167 sales. Operating break-even excludes recovery of the opening investment.
Answer the interviewer follow-up
Why round daily sales upward?
The target is a minimum count of whole transactions. Rounding down would leave the model below break-even.
Assessment rubric · 20 points
For self-review or mentor discussion. This rubric is not an automated written-answer grade or an employer scoring system.
Correctly derives all 3 numerical results for this level, keeps signs and units consistent, and explains the method.
Explains the objective: Build operating break-even. States the supplied scope, timing and metric definitions before calculating.
Operating break-even excludes recovery of the opening investment. Addresses the interviewer follow-up without contradicting the facts.
Leads with a clear conclusion, distinguishes facts from assumptions, and identifies the next evidence needed. Does not claim the source company asked or endorsed this question.
Use full precision until the final rounding. Alternative written recommendations may be reasonable if they respect the facts and explain assumptions. This is Finance Circle’s guide, not an official source-company answer.
Source & attribution
The references below identify the public reporting, hiring guidance, research or mock-interview material used for context. Finance Circle wrote the exercise and its answers. Illustrative figures are explicitly identified; they are not company results or findings.
Public context; Finance Circle’s scenario inputs are illustrative.
Source reviewed 30 October 2026. No external page is needed to answer this exercise. Company names and logos identify sources only. All trademarks belong to their respective owners.