Looking for a butcher shop business plan? You're in the right place.
A butcher shop has to answer a lender's questions with numbers that hold up at the meat case. How much does the cooler, case and van cost before a single steak sells? How thin is the margin once trim and spoilage are counted? What happens to the books if beef prices jump or sales run a fifth short? A generic template won't tell you what a sensible answer looks like.
In this article we'll walk through a complete sample plan for a whole-animal butcher shop in Cincinnati, Ohio, section by section, ending with the five-year financials. We'll cover the executive summary, the SWOT analysis and the full set of statements.
Here's what you'll take away:
- The opening budget: see what a cooler, a service case, a smokehouse and a used van add up to, so the loan you ask for covers them
- The competitor table: learn how to set a specialty shop against supermarket counters, club stores and meat-box delivery without naming a villain
- The marketing plan: find out what a new shop might spend to build its first 800 regular households, and where the money goes
- The first year, month by month: spot the slow months and the holiday spike before you reach them, and plan cash around both
- The margin by product line: understand why counter cuts, sausage and restaurant orders earn very different returns on the same pound of meat
- The downside case: have an answer ready for "what if sales are 20% short?", with the steps the owner takes in response
If you're opening a butcher shop, read this before you write your own. The shop is fictional, so take what fits and change the rest.
In this plan
Looking for a butcher shop business plan template? The Toolkit builds yours with your own numbers.
Executive Summary
Anchor Bridge is a whole-animal butcher shop that opens in January 2027 on a neighborhood retail street in Cincinnati, Ohio. It sells fresh beef, pork, lamb and poultry over the counter, takes holiday and custom orders, makes sausage, goetta, bacon and smoked meats on site, serves sandwiches and prepared lunches, and supplies a small number of restaurants and caterers. Wes Hollander, a butcher with fifteen years in the trade, owns 70% and runs the cutting room.
The shop raises $475,000: $165,000 of Wes's savings, $150,000 from one local investor for a 30% stake, and a $160,000 seven-year bank loan. Of that, $257,000 buys the cooler, cases, saws, smokehouse, van and fit-out, $20,000 is opening stock, $40,000 pays for licenses, legal work, pre-opening costs and launch marketing, and $158,000 stays in the bank as a reserve.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $925,100 | $1,308,214 | $1,541,767 |
| Net income after start-up costs | ($123,404) | ($8,160) | $39,440 |
| Closing cash | $91,505 | $92,986 | $140,738 |
Year 1 loses money because the shop pays three full-time people, a cook from month 12 and a van before the case has regular customers. Operating profit appears in July, September, October, November and December, when holiday orders lift the monthly total past $110,000. Year 2 still loses $8,160, and Year 3 is the first profitable year. Margins stay thin throughout: net margin before start-up costs peaks at 2.6%.
If sales run 20% below plan and Wes responds with later hiring, a pay cut, less marketing and no distributions, year-end cash stays positive in every year, though loan cover falls below 1.0x in Years 2 and 3.
The shop's gross margin of 40.5% depends on one habit: every animal is bought whole or in primals and sold in as many forms as it will make, from the steak case to sausage, sandwiches and stock. A shop that only resold cut trays would earn less on the same pounds.
The Shop
Legal name: Anchor Bridge, Inc., an Ohio corporation taxed as a C corporation. Owners: Wes Hollander 70%; one local investor 30%, with no role in daily running. Premises: 2,000 square feet leased on a neighborhood street in Cincinnati: about 700 square feet of sales floor, the cutting room, a walk-in cooler and freezer, and the smokehouse. Opening: January 2027. The lease is signed before the loan closes, and the opening stock arrives the week before. The plan uses a five-year lease with a five-year renewal option, a three-month deposit held inside the reserve, and a personal guarantee from Wes; the landlord pays no fit-out allowance.
The point of the shop
Sell meat from named farms and regional processors, cut to order by someone who can tell a customer how to cook it, and make the trimmings into products worth buying.
Three goals for the first two years
- About 800 regular households by December 2027, each averaging a visit a month.
- Operating profit in each month from September to December 2027, and a profit after tax in 2029, the third year.
- Ten restaurant and caterer accounts by the end of 2027 without letting them pass 10% of revenue.
What the shop sells
| Line | How it earns | Year 1 share of revenue |
|---|---|---|
| Counter sales | Fresh cuts at the case, sold by weight | 55% |
| Holiday roasts, bundles and custom orders | Pre-ordered turkeys, hams, prime rib and boxes of cuts | 15% |
| House-made goods | Goetta, bratwurst, mettwurst, bacon, smoked and cured items | 10% |
| Sandwiches and prepared lunches | Hot and cold sandwiches and take-home meals | 7% |
| Restaurant and caterer accounts | Standing weekly orders at about $950 a month | 7% |
| Pantry lines | Eggs, cheese, stock, bones, rubs and sauces | 7% |
Who inspects the shop
Retail food businesses in Ohio are generally licensed through the local health department, and the shop plans to submit its drawings for plan review before it builds out. The rules that apply when a retail shop sells to restaurants can differ from those for retail sales, so the shop asks the Ohio Department of Agriculture and USDA FSIS for the current limits in writing before it signs a restaurant account. It does not slaughter, and it does not process animals that customers bring in. Rules change; the shop treats each of these points as something to confirm with the agency.
Cincinnati's Meat Market
How a butcher earns a living
A butcher competes on provenance, cutting and advice, and earns on yield. A carcass or primal costs a fixed amount, and the shop's income is what it makes of every pound: steaks at the case, grind and sausage from trim, stock from bones, tallow from fat. With a gross margin of 40.5%, one point is worth $9,251 in Year 1 and $15,418 in Year 3, a large share of Year 3's $39,440 profit. Buying, cutting yield and waste control decide the result.
Why this plan is built around the sausage kitchen
Sausage and smoked goods carry direct costs of 45% of sales against 60% at the counter, sandwiches 40%, and restaurant orders 82%. The mix is a choice. It is why house-made goods grow from $96,000 to $215,000 by Year 3 and the lunch counter from $64,000 to $120,000, while restaurant sales stay a small share. A 40.5% gross margin is at the high end of what an independent shop can expect and depends on that mix holding.
What a bad meat year does
The plan quotes no market-size statistic for Cincinnati; the demand case rests on the shop's own household count, shown in the next section. The sharper risk is cost. If direct costs run 3 points higher in every year and prices do not move, net income falls to a loss of $6,813 in Year 3, $9,203 in Year 4 and $26,063 in Year 5, because net margin is only 2.6%. A price rise of about 3%, worth about $46,000 in Year 3, would restore it. A 1-point rise leaves Years 3 to 5 profitable at $24,022, $24,360 and $9,968.
Who a customer could buy from instead
| Alternative | What it offers | Why a customer picks it | How Anchor Bridge differs by design |
|---|---|---|---|
| Supermarket meat counters | Wide range, long hours, one trip | Convenience and weekly promotions | Cut to order, with someone at the case who can advise |
| Warehouse clubs | Large packs | Bulk price | Smaller quantities and named sources |
| Meat-box delivery services | Home delivery on a schedule | No trip to a shop | Same-day choice at the case and house-made goods, with no box to commit to |
| Other independent butchers | The same craft | Established regulars | A smokehouse range and a lunch counter |
| Farmers' markets and farm stands | Direct from the producer | Meeting the farmer | Open six days a week, not a Saturday stall |
The table describes what each alternative offers. It is not a ranking, and no competitor prices are quoted because they change and could not be sourced.
SWOT
| Strengths | Weaknesses |
|---|---|
| A head butcher who cuts, trains and sells | One person who can run the cutting room |
| A house-made range with higher margins | No brand in the neighborhood on day one |
| A November and December peak that rebuilds the cash balance | A first year that loses $123,404 after start-up costs |
| Opportunities | Threats |
|---|---|
| Restaurants wanting a local, flexible butcher | Beef and pork prices moving faster than shelf prices |
| Gift and entertaining orders around holidays | A refrigeration failure on a busy weekend |
| Repeat-order bundles for regulars | Supermarkets matching the specialty range |
Who Buys the Chops
The regular household
A household within a short drive that cooks most nights, will pay a premium for meat it can trust, and wants to ask a question and get an answer. The plan reaches 800 of them by December 2027, with about 550 on average through the year at 12 visits each, which is 6,600 of the year's 10,200 tickets. The other 3,600 come from walk-ins, lunch customers and one-time gift buyers.
The host
A household that buys a standing rib roast, a ham or a turkey a few times a year and pre-orders it. These customers drive the 850 holiday and custom orders in Year 1, and about 41% of that revenue lands in November and December.
The chef and the caterer
Small restaurants, taprooms and caterers that need consistent cuts and trim, and an order that arrives when promised. The plan has 10 accounts by December 2027, each worth about $950 a month.
What triggers a switch
A tray of meat that was not what it looked like, a holiday order that fell through, or a recipe that needs a cut the supermarket does not stock.
What these customers want
Meat they can trust, cut the way they asked, a person who knows the answer, and an order that is ready when it was promised.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Regular households at year end | 800 | 1,000 | 1,100 | 1,150 | 1,200 |
| Tickets from regulars (average households x 12) | 6,600 | 10,800 | 12,600 | 13,500 | 14,100 |
| Walk-in and one-time tickets | 3,600 | 2,000 | 1,600 | 1,400 | 1,400 |
| Counter tickets, total | 10,200 | 12,800 | 14,200 | 14,900 | 15,500 |
Growth slows after Year 2 because the cutting room becomes the limit. Counter staff can serve far more than 47 tickets a day, but two butchers can only break, grind, stuff and smoke so much meat, and the second senior butcher in month 44 is what lifts that ceiling.
How Tickets Turn Into Regulars
The counter visit
A customer asks for a cut, the butcher cuts or wraps it, the customer is told how to cook it, and a line on the card records a preference. Every first-time customer is asked for an email address and a favorite cut. Orders for holidays open six weeks ahead and close a week before.
How restaurant accounts are won
A sample box, a tasting at the shop, a trial order, and then a standing weekly order. The shop quotes prices on a written sheet that it updates each week with the market.
| Year 1 end | Year 2 average | Year 3 average | Year 4 average | Year 5 average | |
|---|---|---|---|---|---|
| Active restaurant and caterer accounts | 10 | about 11 | 12 to 13 | 12 to 13 | 13 |
How prices are set
Counter prices are set per pound from the cost of the primal, the expected cutting yield and a target margin by cut, with premium cuts carrying the highest margin. The average ticket is $50 in Year 1. Prices rise 3% a year from Year 2.
Keeping customers
Regular customers who also buy a holiday order and the house-made range stay longest, so the card and the pre-order list are designed to bring them back for all three.
Getting Cincinnati Through the Door
What the first-year budget buys
Marketing costs $45,000 in Year 1: $17,000 of launch spend from start-up capital and $28,000 of running costs. That is 4.9% of Year 1 revenue, or 3.0% for the running costs alone, and the running budget falls to 1.7% of revenue in Year 3 as regulars refer neighbors. Across 800 regular households, it is about $56 per household, against about $600 a year of counter spend per household at 12 visits and a $50 ticket.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Brand, website and photography (launch) | $6,000 | A clear site with hours, the holiday order form and the weekly specials |
| Opening-week tastings and neighborhood mailers (launch) | $5,000 | Bring the first few hundred households through the door |
| Local press and food-writer visits (launch) | $2,000 | Coverage of the opening and of the smokehouse |
| Founding-member cards and giveaways (launch) | $4,000 | Give early regulars a reason to come back in the first month |
| Google Business Profile, local search and review replies | $3,500 | Show up when someone searches for a butcher nearby |
| Short video and social posts | $6,000 | Show cuts, sausage-making and the weekly special |
| Chef tastings and sample boxes | $6,500 | Win 10 restaurant and caterer accounts by December |
| Market stalls and event booths | $4,500 | Reach households that do not yet know the shop |
| Holiday pre-order email and text campaign | $4,000 | Fill the November and December order book |
| Loyalty cards and community partnerships | $3,500 | Keep regulars coming back and bring in neighbors |
Marketing milestones
- January 2027: doors open; the first founding-member cards go out.
- March 2027: the first two restaurant accounts start.
- July 2027: the first month with an operating profit, by $1,175.
- November and December 2027: revenue reaches $112,079 and $125,843 on holiday orders.
Running the Cutting Room
The premises
Two thousand square feet at about $21.60 a square foot all in, which is $43,200 a year. The sales floor faces the street, with the cutting room, walk-in, smokehouse and receiving door behind it. Utilities are $15,600 in Year 1, mostly refrigeration. Space is tight: about 700 square feet of sales floor leaves 1,300 for the cutting room, walk-in, smokehouse, receiving and storage.
How meat moves through the shop
Deliveries arrive in the morning and are weighed, checked for temperature and logged. Wes breaks primals and whole hogs before the doors open, trim goes to the grinder and the sausage table, and the case is refilled at midday. Orders for restaurants are cut the afternoon before and delivered by the driver the next morning.
Buying and stock
Meat is bought weekly from a short list of regional processors and farms, on terms of about 9 days. Stock on hand is about a week of annual direct costs plus the $20,000 opening stock. Nothing is dry-aged or hung beyond what the walk-in holds.
Cold chain and food safety
Temperature logs for the cooler, case and van, remote alarms that text the owner after hours, a written food-safety plan reviewed by the health department, and a set routine for cleaning the saw, grinder and tables. Spoilage and cold-chain losses are budgeted at 0.5% of sales, rendering and bone pickup at $4,500, and the insurance covers spoilage from a refrigeration failure.
Who does the work
Four full-time people and three part-time roles at the end of Year 1: Wes, a journeyman butcher, a counter lead, a smokehouse cook from month 12, a Thursday-to-Saturday counter associate, a part-time driver from month 5 and a holiday helper each November and December. A second counter associate joins in month 26 and a second senior butcher in month 44. Until the cook arrives, Wes and the journeyman make the sausage after the case is stocked, which is the main strain on the first year. The downside case shows which of these are delayed or dropped.
Licenses and cover
- A retail food establishment license from the local health department, with plan review before the build-out.
- Written confirmation from the Ohio Department of Agriculture and USDA FSIS of the limits on restaurant sales and on curing, smoking and hot food in a retail shop.
- General and product liability, spoilage, commercial auto and key-person cover on Wes, budgeted at $15,000 in Year 1. Ohio workers' compensation sits inside the 30% payroll load.
The Butchers
Wes Hollander, founder and head butcher
Wes has fifteen years in the trade: eight in the meat departments of a regional grocery chain, then seven as head butcher for a restaurant group's in-house butchery, where he trained apprentices and wrote the cutting specifications. His $165,000 is his savings. He is leaving a salaried job to own the cutting room and the case himself.
Where the team is thin
Wes has not run a retail profit and loss account, has not hired a counter team, and has no background in marketing. The plan answers these with an outside accountant on a monthly retainer inside the $6,500 of professional fees, a counter lead hired for retail experience, and a quarterly review with the investor.
If Wes is out
The journeyman butcher can run the cutting room for a few weeks at reduced range. The second senior butcher in month 44 removes the single point of failure. Until then the shop carries key-person cover on Wes.
Outside help
A retired shop owner agreed to meet Wes every quarter. The shop uses the local small-business development center for lease and permit questions.
Ownership and the bank
Wes owns 70% and the investor 30% of Anchor Bridge, Inc. The bank takes a personal guarantee from Wes and a lien on the equipment and van, and asks for quarterly accounts. Used equipment sells for far less than it costs, so the lender's cover rests on Wes's guarantee as much as on the collateral. The investor's shares carry a right to sell back to Wes after Year 5 at a price set by formula, with no payment promised before then.
Financial Plan: Case, Cooler and Cash
The tables below come from one model of the shop: month by month for 2027, one column per year after that. Funding and the shop figures come first, then revenue, staff and the three statements.
The cooler, the cases and the opening loan
| Use of funds | Amount |
|---|---|
| Walk-in cooler and freezer, hanging rail | $36,000 |
| Refrigerated service case (14 feet) and a self-serve cooler | $26,000 |
| Band saw, grinder, mixer, stuffer, vacuum packer, slicer | $31,000 |
| Smokehouse with hood and curing chamber | $24,000 |
| Cutting tables, knives, scales, label printers, point of sale | $20,000 |
| Used refrigerated delivery van | $30,000 |
| Leasehold fit-out: drains, stainless wall panels, hand sinks, flooring, signage | $90,000 |
| Opening stock: primals, pork, poultry, pantry lines | $20,000 |
| Retail food licenses, health department plan review, permits | $3,500 |
| Legal: lease review, incorporation, supplier terms | $5,500 |
| Pre-opening rent, training and recipe testing | $14,000 |
| Launch: brand, website, opening-week tastings, local press | $17,000 |
| Cash reserve for the first six months and the first slow winter | $158,000 |
| Total uses | $475,000 |
| Source of funds | Amount |
|---|---|
| Wes Hollander's savings | $165,000 |
| One local investor (30% stake) | $150,000 |
| Bank equipment and fit-out loan | $160,000 |
| Total sources | $475,000 |
Wes Hollander puts in $165,000 of savings. One local investor takes a 30% stake for $150,000, and the bank lends $160,000 over seven years at 10.75%, interest-only for the first six months and secured on the equipment and van. The rate is a planning figure, not a quote. Equity is 66% of the $475,000. The $158,000 reserve is sized to a first year that loses $123,404 after start-up costs, with the case still filling in the spring and only five of twelve months making an operating profit. It also has to carry the downside case below.
Shop figures behind the model
- The counter sells 10,200 tickets in Year 1 at an average of $50, which is $510,000. That is about 33 tickets a day over 305 trading days. Tickets reach 14,200 in Year 3 (47 a day) and 15,500 in Year 5. Prices rise 3% a year from Year 2.
- Holiday roasts, bundles and custom orders number 850 in Year 1 at an average of $158: turkeys, hams, prime rib, and boxes of retail cuts cut and wrapped from the shop's own stock. About 41% of the Year 1 order revenue falls in November and December. The shop buys no live animals and processes none for customers.
- Restaurant and caterer accounts grow from 2 in March to 10 in December 2027, at about $950 a month each, then to about 11 on average in Year 2 and 12 or 13 after that. Accounts pay in 14 days. Restaurant sales are 7% of Year 1 revenue and never above 10% after that. The plan keeps them low on purpose: they carry the thinnest margin, and retail shops that sell to other businesses can run into limits on how much they may sell before a different inspection route applies. The shop confirms the current limits in writing with the Ohio Department of Agriculture and USDA FSIS before it signs the first account.
- House-made goods (goetta, bratwurst, mettwurst, bacon, smoked sausage and cured items) bring in $96,000 in Year 1 and $215,000 in Year 3. A full-time sausage and smokehouse cook starts in month 12. Sandwiches and prepared lunches, sold at the counter from the same trim and cooked meats, bring in $64,000 in Year 1 and $120,000 in Year 3. The shop confirms with its health department that its retail license covers curing, smoking and hot food.
- Direct costs are held at the Year 1 blend of 59.5% of revenue in every year, which gives a 40.5% gross margin. By line the Year 1 direct-cost shares are 60% at the counter, 66% on holiday and custom orders, 82% on restaurant accounts, 45% on house-made goods, 40% on sandwiches and 62% on pantry lines. Weighted by each year's mix, the blend stays between 59.3% and 59.7%. Cutting yield sits inside those percentages. One point of gross margin is worth $9,251 in Year 1 and $15,418 in Year 3.
- Spoilage and cold-chain losses beyond normal cutting yield are budgeted at 0.5% of sales, and card fees at 2.2%. Rendering and bone pickup costs $4,500 in Year 1. Insurance of $15,000 covers general and product liability, spoilage from a refrigeration failure, the van and key-person cover on Wes. Remote temperature alarms are included in the $4,800 of software.
- Counter sales are paid on the spot, so receivables are only the restaurant accounts: 3 days of total sales on average, a deliberately cautious figure. Meat suppliers are paid in 9 days. Stock on hand is $20,000 at opening plus about one week of annual direct costs, which makes $31,010 at the end of Year 1 and $38,349 at the end of Year 3.
- Payroll adds 30% to wages for payroll taxes, health cover and Ohio workers' compensation, which is a high-rate class for meat cutting (15% for part-time staff). Wages in the personnel table are launch rates, and 3% annual pay raises are charged as a separate line from Year 2.
- Premises are 2,000 square feet at about $21.60 a square foot a year, all in, which is $43,200. Real asking rents vary by street and landlord, and the lease is negotiated before the loan closes. The $90,000 fit-out covers drains, wall panels, hand sinks, flooring and signage, and is paid by the shop with no landlord allowance. Utilities of $15,600 are high for the floor area because of refrigeration. Refrigeration service and equipment replacement rise from $3,000 in Year 1 to $10,000 in Years 4 and 5.
- The model charges the 21% federal corporate rate plus a 1.8% local rate, with the Year 1 loss carried forward. The shop is set up as a corporation, so those rates fit; they are planning figures, and an accountant confirms the real bill before opening. Owner distributions of $10,000 in Year 4 and $20,000 in Year 5 are paid only from cash the model shows the shop can spare. The loan stays in place rather than being repaid early, so the cash cushion stays with the business.
Revenue by counter and channel
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Counter sales: fresh beef, pork, lamb and poultry | $510,000 | $659,200 | $753,239 | $814,082 | $872,269 |
| Holiday roasts, bundles and custom orders | $134,300 | $179,014 | $209,528 | $233,079 | $254,297 |
| Restaurant and caterer accounts | $60,800 | $125,000 | $150,000 | $160,000 | $170,000 |
| House-made sausage, goetta, bacon and smoked meats | $96,000 | $165,000 | $215,000 | $240,000 | $260,000 |
| Sandwiches and prepared lunches | $64,000 | $98,000 | $120,000 | $130,000 | $138,000 |
| Pantry, eggs, cheese, stock and bones | $60,000 | $82,000 | $94,000 | $101,000 | $107,000 |
| Total revenue | $925,100 | $1,308,214 | $1,541,767 | $1,678,161 | $1,801,566 |
| Growth on prior year | – | 41% | 18% | 9% | 7% |
The counter is the base at 55% of Year 1 revenue and 48% of Year 5. Holiday and custom orders add a second peak. House-made goods and the lunch counter earn the most per dollar sold, which is why the plan grows them while restaurant accounts, at the thinnest margin, stay a small share.
Month by month through 2027
| Month | Counter sales: fresh beef, pork, lamb and poultry | Holiday roasts, bundles and custom orders | Restaurant and caterer accounts | House-made sausage, goetta, bacon and smoked meats | Sandwiches and prepared lunches | Pantry, eggs, cheese, stock and bones | Total revenue | EBITDA |
|---|---|---|---|---|---|---|---|---|
| Jan 2027 | $19,900 | $3,634 | $0 | $3,102 | $2,809 | $2,263 | $31,708 | ($21,352) |
| Feb 2027 | $23,900 | $4,266 | $0 | $3,722 | $3,371 | $2,715 | $37,974 | ($18,815) |
| Mar 2027 | $31,850 | $6,004 | $1,900 | $5,066 | $4,195 | $3,394 | $52,409 | ($12,970) |
| Apr 2027 | $37,700 | $10,112 | $2,850 | $6,452 | $4,966 | $4,034 | $66,114 | ($7,420) |
| May 2027 | $45,900 | $8,532 | $3,800 | $8,349 | $5,730 | $4,671 | $76,982 | ($3,019) |
| Jun 2027 | $48,600 | $9,164 | $4,750 | $9,305 | $6,067 | $4,945 | $82,831 | ($651) |
| Jul 2027 | $50,250 | $10,744 | $5,700 | $9,616 | $5,921 | $5,110 | $87,341 | $1,175 |
| Aug 2027 | $45,900 | $8,216 | $6,650 | $8,840 | $6,049 | $4,913 | $80,568 | ($1,567) |
| Sep 2027 | $46,850 | $8,374 | $7,600 | $10,531 | $6,539 | $5,330 | $85,224 | $318 |
| Oct 2027 | $45,500 | $10,112 | $8,550 | $9,305 | $6,742 | $5,818 | $86,027 | $643 |
| Nov 2027 | $54,000 | $24,490 | $9,500 | $10,339 | $5,993 | $7,757 | $112,079 | $11,193 |
| Dec 2027 | $59,650 | $30,652 | $9,500 | $11,373 | $5,618 | $9,050 | $125,843 | $16,766 |
January is the weakest month at $31,708 and the case fills as spring arrives. Grilling season holds revenue at $77,000 to $87,000 a month from May to October, and November and December reach $112,079 and $125,843 on holiday orders. EBITDA is positive only in July, September, October, November and December, and the first three are within $1,200 of zero. The lowest month-end cash balance is Oct, at about $66,000, before the holiday months rebuild it.
Who is behind the counter
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and head butcher | $62,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Journeyman butcher | $47,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Counter lead | $37,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Counter associate (part time, Thursday to Saturday) | $22,000 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Holiday counter and packing help (part time, November and December) | $22,000 | Month 11 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Delivery driver (part time, restaurant routes) | $16,000 | Month 5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Sausage and smokehouse cook | $38,000 | Month 12 | 1 | 1 | 1 | 1 | 1 |
| Second counter associate (part time) | $22,000 | Month 26 | – | – | 0.5 | 0.5 | 0.5 |
| Second senior butcher | $52,000 | Month 44 | – | – | – | 1 | 1 |
| Total payroll incl. on-costs | $235,700 | $287,117 | $310,308 | $340,583 | $380,017 |
Wes, a journeyman butcher and the counter lead start together in January, with a part-time associate on Thursday to Saturday. The delivery driver joins in month 5 as restaurant routes begin, and a holiday helper covers every November and December. The full-time smokehouse cook follows in month 12, a second counter associate in month 26 and a second senior butcher in month 44, when the cutting room is the limit on sales. Part-time and seasonal roles are shown at annual-equivalent pay; Wes's $62,000 is already in the costs, so profit here is what remains after he is paid.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $925,100 | $1,308,214 | $1,541,767 | $1,678,161 | $1,801,566 |
| Cost of meat and goods sold, after cutting yield and trim | ($550,494) | ($778,471) | ($917,451) | ($998,614) | ($1,072,048) |
| Gross profit | $374,606 | $529,743 | $624,316 | $679,547 | $729,518 |
| Payroll incl. on-costs | ($235,700) | ($287,117) | ($310,308) | ($340,583) | ($380,017) |
| Rent | ($43,200) | ($44,500) | ($45,800) | ($47,200) | ($48,600) |
| Utilities | ($15,600) | ($16,000) | ($16,500) | ($17,000) | ($17,500) |
| Marketing | ($28,000) | ($26,000) | ($26,000) | ($27,000) | ($28,000) |
| Insurance | ($15,000) | ($15,700) | ($16,400) | ($17,100) | ($17,800) |
| Professional fees | ($6,500) | ($6,800) | ($7,000) | ($7,300) | ($7,600) |
| Software subscriptions | ($4,800) | ($5,200) | ($5,500) | ($5,800) | ($6,000) |
| Card processing fees (2.2% of sales) | ($20,352) | ($28,781) | ($33,919) | ($36,920) | ($39,634) |
| Paper, film, labels and bags (1.0% of sales) | ($9,251) | ($13,082) | ($15,418) | ($16,782) | ($18,016) |
| Spoilage and cold-chain losses beyond cutting yield (0.5% of sales) | ($4,626) | ($6,541) | ($7,709) | ($8,391) | ($9,008) |
| Rendering, bone and fat pickup | ($4,500) | ($5,000) | ($5,400) | ($5,700) | ($6,000) |
| Linen, sanitation, pest control and knife sharpening | ($9,000) | ($10,000) | ($10,500) | ($11,000) | ($11,500) |
| Van fuel, repairs and registration | ($6,000) | ($6,500) | ($6,800) | ($7,200) | ($7,500) |
| Licenses, inspections and dues | ($2,000) | ($2,100) | ($2,200) | ($2,300) | ($2,400) |
| Refrigeration service and equipment replacement | ($3,000) | ($6,000) | ($8,000) | ($10,000) | ($10,000) |
| Bad debt on restaurant accounts (0.3% of sales) | ($2,775) | ($3,925) | ($4,625) | ($5,034) | ($5,405) |
| Annual pay raises (3% a year) | $0 | ($8,614) | ($18,898) | ($31,581) | ($47,695) |
| EBITDA | ($35,698) | $37,883 | $83,339 | $82,656 | $66,844 |
| Depreciation | ($30,700) | ($30,700) | ($30,700) | ($30,700) | ($30,700) |
| Interest | ($17,006) | ($15,343) | ($13,199) | ($10,814) | ($8,160) |
| Income tax | $0 | $0 | $0 | $0 | ($3,812) |
| Net income before start-up costs | ($83,404) | ($8,160) | $39,440 | $41,142 | $24,172 |
| Start-up costs expensed at opening (legal, licenses, pre-opening rent and training, launch marketing) | ($40,000) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($123,404) | ($8,160) | $39,440 | $41,142 | $24,172 |
Year 1 loses $83,404 before start-up costs and $123,404 after them. Year 2 loses $8,160, the last loss year. Net income is $39,440 in Year 3, $41,142 in Year 4 and $24,172 in Year 5, when accumulated pay raises, equipment replacement and the first income tax charge arrive together. EBITDA margin peaks at 5.4% in Year 3, and net margin before start-up costs never passes 2.6%. That is a thin return, and the cushion is small: the sensitivity in the Market section shows what a rise in meat costs does to it.
Cash movements
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($117,744) | $20,453 | $68,867 | $71,099 | $54,200 |
| Equipment, van and fit-out | ($257,000) | $0 | $0 | $0 | $0 |
| Funding received | $475,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | ($8,751) | ($18,972) | ($21,115) | ($23,500) | ($26,155) |
| Owner distributions | $0 | $0 | $0 | ($10,000) | ($20,000) |
| Net change in cash | $91,505 | $1,481 | $47,752 | $37,598 | $8,045 |
| Closing cash | $91,505 | $92,986 | $140,738 | $178,337 | $186,382 |
Cash closes every year above $90,000 and builds to $186,382 by Year 5. Most of the Year 1 outflow is the $257,000 of equipment, van and fit-out, followed by a $117,744 operating outflow before the holiday months. The loan runs down from $151,249 at the end of Year 1 to $61,506 at the end of Year 5, and the first distribution comes in Year 4.
Balance sheet with stock on hand
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $91,505 | $92,986 | $140,738 | $178,337 | $186,382 |
| Accounts receivable | $7,604 | $10,752 | $12,672 | $13,793 | $14,807 |
| Stock on hand | $31,010 | $35,569 | $38,349 | $39,972 | $41,441 |
| Equipment, van and fit-out (net) | $226,300 | $195,600 | $164,900 | $134,200 | $103,500 |
| Total assets | $356,419 | $334,908 | $356,660 | $366,302 | $346,130 |
| Owed to meat suppliers | $13,574 | $19,195 | $22,622 | $24,623 | $26,434 |
| Bank equipment and fit-out loan | $151,249 | $132,277 | $111,162 | $87,661 | $61,506 |
| Paid-in capital | $315,000 | $315,000 | $315,000 | $315,000 | $315,000 |
| Retained earnings | ($123,404) | ($131,564) | ($92,124) | ($60,982) | ($56,811) |
| Total liabilities and equity | $356,419 | $334,908 | $356,660 | $366,302 | $346,130 |
Margins, break-even and loan cover
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -3.9% | 2.9% | 5.4% | 4.9% | 3.7% |
| Net margin (before start-up costs) | -9.0% | -0.6% | 2.6% | 2.5% | 1.3% |
| Payroll incl. pay raises as share of revenue | 25% | 23% | 21% | 22% | 24% |
| Revenue per full-time equivalent at year end | $168,200 | $237,857 | $256,961 | $239,737 | $257,367 |
| Average monthly revenue | $77,092 | $109,018 | $128,481 | $139,847 | $150,131 |
| Monthly revenue needed to cover operating costs | $84,438 | $101,222 | $111,330 | $122,837 | $136,374 |
| Debt service cover (EBITDA / interest + principal) | -1.4x | 1.1x | 2.4x | 2.4x | 1.9x |
Year 1 averages $77,092 a month against $84,438 needed to cover operating costs, so it loses money. Year 2 averages $109,018 against $101,222, and the gap widens in Year 3 to $128,481 against $111,330. Debt service cover is negative in Year 1, 1.1x in Year 2 and 2.4x in Years 3 and 4. Payroll takes 25% of revenue in Year 1 and 21% in Year 3.
A soft year: sales 20% short
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $740,080 | $1,046,571 | $1,233,414 | $1,342,529 | $1,441,253 |
| Net income before start-up costs | ($112,822) | ($26,480) | ($22,983) | $4,122 | $28,807 |
| Net income after start-up costs | ($152,822) | ($26,480) | ($22,983) | $4,122 | $28,807 |
| Closing cash | $63,095 | $46,674 | $32,258 | $42,985 | $75,800 |
This case cuts every revenue line by 20% in every year. The response: sales-linked costs fall with sales, the delivery driver and the smokehouse cook start a year later, every other hire from month 13 starts six months later, the second counter associate and second senior butcher are dropped, refrigeration service is trimmed, marketing is cut by 20%, Wes takes a 20% pay cut, the shop stays in its first premises and no distributions are paid. On those terms year-end cash never falls below $32,258, the low point comes in Year 3, and the shop loses money through Year 3 before turning a small profit in Year 4. Debt service cover is 0.6x in Years 2 and 3, below 1.0x, so the bank would need to agree a waiver or an extended interest-only period; the cash holds because the equity reserve carries the gap. The model has no monthly view after Year 1, so the pre-holiday low in Years 2 and 3 could dip below the year-end figure. Years 4 and 5 show more profit than the base case only because of the dropped hire and the pay cut, so they describe the response and not a forecast. Equity ends Year 1 at $162,178.
Sources
- Bureau of Labor Statistics, Butchers occupational profile, Occupational Outlook Handbook: general reference for the trade. No figure from it is used; the plan's wages are its own.
- USDA Food Safety and Inspection Service, fsis.usda.gov: the agency whose retail-store and restaurant-sale rules the shop confirms before signing accounts. No limit is quoted.
- Ohio Department of Agriculture, agri.ohio.gov, and the Cincinnati Health Department: retail food licensing and plan review. No requirement is quoted.
- City of Cincinnati, cincinnati-oh.gov: local income and net profit tax. The 1.8% local rate in the model is a planning figure for an accountant to confirm.
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