Looking for a butcher shop business plan? You're in the right place.
A butcher shop has to answer a lender's questions in numbers that hold up at the saw. How much does the cooler and cutting room cost before a single steak sells? How much of a carcass leaves the shop as something a customer will pay for? What happens to cash when a holiday season runs a fifth short? A generic template won't show 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 Brooklyn, New York, 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 walk-in cooler, a band saw and a fit-out add up to, so the loan you ask for covers them before the first order
- The product-line margin table: learn why steaks, sausage and a lunch counter earn very different returns from the same animal
- The yield and shrink figures: find out what trim loss and spoilage cost a whole-animal shop and why a few points of yield matter more than a price rise
- The first year, month by month: spot the pre-opening months and the holiday peaks before you reach them, and plan cash around both
- The inventory and supplier-payable view: see how much cash sits in the cooler and what farms and processors carry for the shop
- 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
- Executive Summary
- Choppie on One Page
- Brooklyn's Meat Market and the Other Places to Buy a Roast
- The People Who Buy Meat by the Pound
- From the Counter to the Weekly Box
- Getting the Neighborhood Through the Door
- Inside the Cutting Room
- The Block and the Back Office
- Financial Plan: Yield, Margin and Cash
- The cutting room, the opening stock and who pays for them
- Shop figures behind the model
- Sales by product line
- Who is on the block and who is behind the counter
- Profit and loss
- Cash movements
- Balance sheet with stock and supplier balances
- Margins, break-even and loan cover
- A soft trading year: sales 20% short
- Sources
Looking for a whole-animal butcher shop business plan template? The Toolkit builds yours with your own numbers.
Executive Summary
Choppie is a whole-animal butcher shop that opens on April 1, 2027 in a leased 2,500-square-foot unit on a secondary commercial street in Brooklyn, New York. It breaks down beef, pork, lamb and poultry from regional farms at its own saw, sells the cuts over a service case, turns trim into house-made sausage, charcuterie, rubs and stocks, and runs a lunch counter, a weekly meat box and holiday pre-orders alongside. Jan Erf, a South African-born butcher with eleven years on the block, owns 51% and cuts. A local investor holds the other 49% and takes no part in the daily work.
Choppie needs $985,000 to open. Jan puts in $190,000 of savings, the investor $620,000, and a bank lends $175,000 over ten years. Equipment and fit-out take $442,000 (cooler, saw, grinder, cases, sandwich line with hood, build-out), the first stock $42,000, and permits, legal work, training and the launch $55,000. A $20,000 lease deposit and a $426,000 cash reserve make up the rest.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $1,140,000 | $2,200,000 | $2,550,000 |
| Net income after start-up costs | ($314,078) | ($36,816) | $42,584 |
| Closing cash | $226,713 | $223,513 | $280,660 |
Year 1 has nine trading months. January to March go to a build-out, hiring and practice cuts, and the shop does not earn an EBITDA profit in a month until October. Year 2 loses $36,816 after depreciation and interest and Year 3 is the first profitable year. The gross margin is 45.1% before shrink and about 43.6% after it, and the net margin reaches 3.5% in Year 5. The return is thin, so yield on each animal is the figure the owner watches most closely.
A sales shortfall of a fifth leaves the shop standing. With hiring held back, hours trimmed, the stock fill reduced, marketing cut, Jan's pay lowered and no distributions, closing cash never drops below $154,567 and the shop is profitable from Year 3, though only just: $17,451 in that year. Debt cover is negative in Year 2 in that case, and the plan says what the owner would ask the bank for.
The shop competes on the one thing a supermarket case is not set up to do: cut a whole animal to order, use every part of it and tell the customer which farm it came from in general terms. House-made products and the lunch counter earn the margin that pays for the butchers.
Choppie on One Page
Legal name: Choppie, LLC, a New York limited liability company. Owners: Jan Erf, 51%. One local investor, 49%. Premises: a 2,500-square-foot lease. The public side is roughly 900 square feet. The back holds the cutting room, walk-in cooler, kitchen and class corner. Hours: Tuesday to Sunday, 9 a.m. to 7 p.m., with the lunch counter open 11 a.m. to 3 p.m. Stage: pre-opening. Lease terms are agreed and awaiting signature, farm and processor terms are drafted and the first hires are due in January.
What the shop sells
| Product line | Share of Year 1 sales | Purchase cost as share of sales |
|---|---|---|
| Counter cuts: beef, pork and lamb | 31.8% | 62% |
| Sandwiches and grab-and-go | 18.7% | 42% |
| Holiday and grilling pre-orders | 18.6% | 60% |
| House-made sausage, charcuterie, rubs and stocks | 15.9% | 43% |
| Poultry and eggs | 7.5% | 68% |
| Weekly meat boxes | 6.6% | 60% |
| Butchery classes | 1.1% | 30% |
The spread between 42% and 68% is the plan. A steak sold from the case earns about 38 cents on the dollar, and the trim that comes off it, turned into sausage or a sandwich, earns more than half. The shop is built so that the cuts bring people in and the trim pays the wages.
Why the shop works from whole animals
Buying a side of beef or a half hog rather than boxed primals costs less per saleable pound only if the shop sells every part of it. That asks for a saw, a grinder, a stuffer, a cooler that can hold carcasses and butchers who can break an animal down for what the case needs this week. It also gives the shop something a supermarket case lacks: any cut on request, a short story about where the meat came from and a price that does not depend on a processor's packaging line.
A small South African line sits inside the house-made range: boerewors, biltong and droëwors. The name Choppie is the Afrikaans slang for a chop.
Three targets for the first two years
- Open on April 1 with the cooler stocked and reach $212,000 in monthly sales by December 2027, on the strength of the first Thanksgiving and Christmas pre-orders.
- Sign 70 weekly-box members by December 2027 and show a positive EBITDA in November and December.
- Hold the gross margin at 45% or better and shrink at or under 2.4% of sales through Year 2.
Who inspects a butcher's counter
A shop that cuts and sells raw meat, makes sausage and sells sandwiches deals with the New York City health department, which permits retail food stores, and, for some activities, federal meat-inspection rules and the state agriculture department. Which permits, certificates and written food-safety plans apply depends on what the shop makes and to whom it sells. Current requirements are confirmed with each agency before opening, the shop sells at retail to consumers only, and no permit or fee figure is quoted. The $7,000 licensing line and $12,000 legal line in the start-up budget are planning figures, and the April 1 opening date depends on permits arriving on time.
What a lender would still ask
- The lease term sheet, the personal guaranty on it, whether the $50,000 landlord allowance is on offer, and the $20,000 deposit, which the model leaves in cash.
- The permit timeline against an April 1 opening, since the health department and any federal meat-inspection question set the date.
- Supplier contracts, a second source for each species, and whether any account will give 7 days instead of payment on delivery.
- The evidence for a 70% yield on a side of beef: the cut tests the shop would run before signing.
- Who cuts if the journeyman leaves, since the plan has one assistant and no spare butcher before month 15.
- Why the raise is $985,000 when the cash low point is about $162,000, or $142,000 after the lease deposit: the shop loses money for two years and the downside case needs the reserve.
- Debt cover of 1.0x in Year 2, against the 1.15x to 1.25x lenders often ask for, and the ramp behind a $70,000 first month.
- The investor's return: distributions of $125,000 over Years 3 to 5 on $620,000, with no exit forecast.
- A construction contingency and an expediter or architect fee, neither of which is in the $300,000 fit-out or the $7,000 permit line.
- A like-for-like sensitivity on pay. A 10% rise in wages turns Year 3 into a loss.
Brooklyn's Meat Market and the Other Places to Buy a Roast
How a butcher earns a living
Of every sales dollar in Year 3, about 44 cents survive purchases and shrink. Wages take roughly 28 cents, rent and utilities 5 and everything else 6, which leaves 4.2 cents of EBITDA.
With so little left over, small movements matter. One point of gross margin is $25,500 in Year 3, about 60% of that year's $42,584 net income, and the shop needs about $193,000 in monthly sales to cover its costs against the $212,500 it averages.
Where else a household buys meat
Brooklyn households buy meat from supermarket counters, warehouse clubs, other independent butchers and ethnic markets, farmers' markets and farm stands, and online meat-delivery services. Choppie does not try to match the largest of them on price. It prices as a craft shop, above a supermarket's case, carries fewer lines and spends its effort on cut-to-order service, house-made products and a lunch counter. The plan's margin depends on shoppers paying that premium.
| Alternative a shopper has | What it offers | Why a shopper picks it | Where Choppie differs by design |
|---|---|---|---|
| Supermarket meat counters | Packaged cuts, weekly sales, one-stop shop | Convenience and price | Cut to order, whole-animal range, house-made sausage |
| Warehouse clubs | Large packs at low unit prices | Lowest price per pound | Single-portion and small-family cuts, no membership |
| Other independent butchers and ethnic markets | Specialist ranges and long-standing regulars | Loyalty and specific cuts | A lunch counter, weekly boxes and holiday pre-orders |
| Farmers' markets and farm stands | Meat direct from the producer | Meeting the grower | Open six days a week all year, with the full cut range |
| Online meat delivery | Shipped boxes and subscriptions | Convenience and range | Pickup the same week, a counter to ask questions at |
The columns describe the alternatives and the difference Choppie intends, and imply no ranking. No prices are shown because they move constantly, and no business is named.
Who the shop is not for
Shoppers who buy on the lowest price per pound will stay with a supermarket or a club. They are left out of the sales line.
SWOT
| Positive | Negative | |
|---|---|---|
| Internal | Strengths: a whole-animal range with house-made products on top; an owner who is also the head butcher; a lunch counter that uses trim; pre-order and box lines that bring cash in ahead of the holidays | Weaknesses: one location; a cutting room with little spare capacity until the apprentice is trained; thin net margins; dependence on a few skilled people |
| External | Opportunities: interest in knowing where meat comes from; weekly boxes as a repeat-order channel; classes and events in the shop | Threats: carcass and primal price swings; a lease renewal at a higher rent; wage pressure for skilled butchers; supermarkets adding premium lines |
The People Who Buy Meat by the Pound
The Sunday-dinner household
A household of three or four that cooks a roast or a chicken on the weekend and a few weeknight dinners from the case. The model uses a basket of about $50 and a visit every three weeks or so. They are the base of the counter's sales and the group most likely to join the weekly box.
The grill host and the holiday table
Customers who buy a lot of meat a few times a year: a July 4th pack for a dozen people, a Thanksgiving turkey, a Christmas rib roast. Pre-orders average about $175. They are the most price-tolerant customers and the most likely to be disappointed by a missed order, so pre-order handling is run as a process with its own staff time.
The lunch crowd
Residents and nearby workers who pick up a sandwich several times a week. Each visit is smaller but more frequent than the roast household's, so the counter is priced as a margin line.
The home cook who wants to learn
Customers who ask how to cut a whole chicken or tie a roast. A small class program serves them and gives the shop a reason to hold a regular evening event. Classes are 1% of sales and exist for the relationship they build.
What keeps a customer from going back to the supermarket
Cuts trimmed to the customer's request, answers from the person who did the cutting and holiday orders ready at the promised hour. One failed Thanksgiving order is hard to win back, so time and money go into the order process.
From the Counter to the Weekly Box
How a visit becomes a standing order
A customer comes in for a roast, buys a sausage pack and a sandwich, and is offered the weekly box at the counter. The box is a prepaid order of a set weight of mixed cuts, a sausage pack and one house-made item, at an average of $68 a box, picked up at the shop. Members can skip a week, and the model uses about 3.2 boxes a month per member.
The weekly box
The box is the shop's way of selling the whole animal on a schedule: it takes the cuts the case moves slowly and gives the cooler a predictable outflow. Membership starts at 12 in May, reaches 70 by December and averages about 88 in Year 3. A short local round by the part-time packer serves members who cannot collect.
Holiday pre-orders
Orders open six weeks ahead for Thanksgiving and Christmas and three weeks ahead for Memorial Day and July 4th. Each pre-order carries a pickup time slot and a handling sheet in the cooler. The model collects cash with sales and does not count deposits taken weeks in advance, which would help cash in November and December.
Pricing the animal, cut by cut
Prices are set per pound from the yield on each primal and the margin target for the line. The shop prices premium steaks to carry the lower-priced roasts and grind, and sets house-made items from the recipe cost with a target of 43% purchase cost. Sandwiches are priced from the plate cost with a target of 42%. Prices rise about 3% a year with costs.
Classes
Two evening sessions a month seat 12 at about $88 a seat, in the class corner behind the counter. Topics rotate through whole-chicken breakdown, sausage making and steak cutting. Each seat includes the meat used.
Regulars
Once a shopper has bought three times, the shop adds the household to its email list and offers the box. The target is for regulars to make up 70% of counter transactions by the end of Year 2. A lapsed shopper gets a single reminder.
Getting the Neighborhood Through the Door
What the first-year budget buys
Marketing in Year 1 comes to $50,000, of which $22,000 is launch work paid out of the opening capital and $28,000 comes out of operating cash.
| Item | Year 1 |
|---|---|
| Brand, signage and storefront | $9,000 |
| Tasting weekend and opening-week events | $5,000 |
| Local press and neighborhood introductory offers | $4,000 |
| First-box discount offer | $4,000 |
| Neighborhood mailers and association events | $6,000 |
| Social and email | $5,000 |
| In-shop tastings and cooking demonstrations | $5,000 |
| Farm visit days and producer co-marketing | $3,000 |
| Holiday pre-order campaign: order forms and email | $5,000 |
| Website and pre-order page upkeep | $4,000 |
| Total | $50,000 |
By December about 900 households are regulars, which is about $56 of marketing for each. Marketing falls to $24,000 in Year 2 and $22,000 in Year 3 as regulars bring others in, and the shop adds about 450 net regular households in Year 2 and 300 in Year 3, or $53 and $73 a household.
Dates on the marketing calendar
- April: tasting weekend and the first box offer.
- May and June: Memorial Day and July 4th grilling packs, the first pre-order test.
- October: the last month of small losses and the open call for Thanksgiving orders.
- November and December: Thanksgiving and Christmas pre-orders, with $212,000 in December sales and 70 box members.
Inside the Cutting Room
The premises
The shop leases 2,500 square feet at $38 a square foot a year, roughly 900 of it public floor. The back holds a cutting room with floor drains and washable surfaces, a walk-in cooler and freezer, a sandwich and curing kitchen and the class corner. A ten-year lease carries a renewal option and, as a negotiating target, a $50,000 landlord allowance against a $300,000 build-out, which leaves the shop $250,000 to pay. The landlord is expected to ask for a personal guarantee on the lease and a deposit of two months' rent.
How an animal moves through the shop
Sides, primals and birds arrive in the morning and are checked for temperature and condition at the door. Anything that fails is refused on the spot. Carcasses go to the cooler and, for beef, the aging cabinet. The butchers break down to the week's case plan, trim goes to the grinder and the sausage table, bones and fat go to stock and render, and cuts are weighed, wrapped and labeled. A weekly cut test records the yield on each primal against the plan.
Buying whole animals
The shop buys beef, pork, lamb and poultry from regional farms and processors in the Northeast and plans to pay them in about 7 days. New accounts are often asked for payment on delivery, so even that term has to be negotiated, and a second source for each species is lined up before opening. No farm is named here and no claim is made about a farm's practices. Terms such as grass-fed, pasture-raised or heritage appear on the case only where the supplier can document them and where they match the current federal labeling rules, which the shop confirms with the supplier and the regulator.
Cold chain and food safety
Temperatures in the cooler and the cases are written down on a fixed schedule and watched by a remote alarm. Everyone who touches raw meat or ready-to-eat food completes training before opening, raw and cooked work stays on separate surfaces and the sandwich counter labels allergens. Vacuum-packed and cured items may call for a written food-safety plan, and the shop checks with the health department before it sells them.
What the shop says about its meat
The shop labels each case card with the species, cut and general source region. It makes no claim about animal welfare, organic status or antibiotic use that a supplier's documents do not support. If it later sells under a certification or a named farm program, it checks the current federal labeling rules first.
Who does the work
Nine people open the shop: Jan, two butchers, the cook and the counter staff. At the end of Year 3 the payroll covers nine full-time and five part-time positions, 11.5 full-time equivalents, which puts sales at $221,739 per full-time equivalent. A weight-priced counter with pre-orders and boxes needs fewer labor hours per dollar than a restaurant, and a lender can check the ratio against the schedule.
The Block and the Back Office
Jan Erf, owner and head butcher
Jan grew up in a sheep-farming district of South Africa, trained as a butcher there and has worked eleven years on the block, the last six in New York shops. He sets the buying plan, the case plan and the cut tests and is on the block most days. His $78,000 salary is in the costs from month 1.
The butchers
A journeyman butcher starts in month 2 and a second butcher in month 3, at $62,000 and $54,000. An apprentice starts in month 15 at $46,000 once the first holiday season shows the load on the cutting room. Skilled butchery is paid at the market rate, and no butcher is budgeted at a counter wage.
Counter and kitchen
A cook runs the sandwiches, prepared foods and curing from month 3, with a part-time assistant. A counter lead and a full-time associate open the shop, with two part-time counter staff and, from month 5, a part-time box packer. A full-time cutting-room and prep assistant joins in month 9 and a second full-time counter associate in month 20. Counter pay starts at $38,000 to $42,000 for full-time staff.
Where the team is thin
The cutting room has three butchers and one assistant, with no spare until the apprentice is trained. Jan does the ordering, the buying and much of the cutting, and there is no marketing employee: Jan and the counter lead run the email list and the pre-order campaign. Bookkeeping and tax are outsourced and sit in the $8,000 professional-fees line.
If Jan is out
The journeyman butcher runs the cutting room and the counter lead runs the front of the shop. The investor has the right to appoint an interim manager, and the bank's personal guarantee stays with Jan.
Ownership and the bank
Jan owns 51% and the investor 49%. The bank holds a lien on the equipment and a personal guarantee from Jan. The investor takes no salary and does not work in the shop, and paid a higher price per point because Jan's stake reflects unpaid pre-opening work.
Financial Plan: Yield, Margin and Cash
One five-year model sits behind every table below. 2027 runs month by month and opens with three months in which the shop is empty and the payroll is not. Each later year gets a single column. Funding comes first, then the shop figures, then sales, staff and the three statements.
The cutting room, the opening stock and who pays for them
| Use of funds | Amount |
|---|---|
| Walk-in cooler and freezer, with compressor and installation | $62,000 |
| Band saw, grinder, mixer-stuffer, vacuum sealer, slicer and cutting tables | $46,000 |
| Two refrigerated service cases, scales, point of sale and signage | $44,000 |
| Sandwich line, oven, smoker, dry-aging cabinet, exhaust hood and fire suppression | $40,000 |
| Leasehold fit-out, $300,000 gross less a $50,000 landlord allowance: floor drains, hand sinks, washable walls, lighting, storefront | $250,000 |
| Opening stock: first whole-animal orders, casings, spices, packaging and sandwich supplies | $42,000 |
| Food-retail and meat-handling permits, plan review, business licenses | $7,000 |
| Legal: lease review, entity set-up, supplier terms, food-safety plan | $12,000 |
| Hiring and training the butchers and counter team, practice cuts and recipe trials | $14,000 |
| Launch: brand, signage, tasting weekend, local press, first box offer | $22,000 |
| Lease security deposit (about two and a half months of rent, held until the lease ends) | $20,000 |
| Cash reserve: three pre-opening months, the slow spring and the downside case | $426,000 |
| Total uses | $985,000 |
| Source of funds | Amount |
|---|---|
| Jan Erf's savings | $190,000 |
| Local investor (49% stake) | $620,000 |
| Bank term loan, SBA-style, secured on equipment | $175,000 |
| Total sources | $985,000 |
Jan Erf contributes $190,000 from savings. A local investor pays $620,000 for 49%, a richer price per point than Jan's, since Jan's stake also reflects months of unpaid work finding the site and the farms. The bank's $175,000 term loan runs ten years at 10.5%, with six months of interest-only payments, is secured on the equipment and carries Jan's personal guarantee, and the landlord is expected to ask for a guarantee on the lease as well. It is modeled on SBA-guaranteed lending, and the rate is a planning figure and no quote. Equity makes up 82% of the $985,000. Spending splits as $442,000 for the cooler, cutting-room machines, service cases, sandwich line with hood and fit-out, $42,000 for the first stock, $55,000 for permits, legal fees, training and launch marketing, a $20,000 lease deposit and a $426,000 reserve. The fit-out is $300,000 gross, less a $50,000 landlord allowance that is a negotiating target and no certainty; without it the shop would need that much more capital. The reserve is larger than the October low point of about $162,000, or $142,000 once the lease deposit that the model leaves in cash is set aside, because the shop burns $310,762 of cash in Year 1 and loses money again in Year 2, and because the downside case below draws on it; it still ends every year with cash in the bank.
Shop figures behind the model
- The lease covers 2,500 square feet on a secondary street: about 900 of public floor and 1,600 behind it for the cutting room, walk-in, kitchen, class corner and dry storage. Rent is $38 a square foot, $95,000 a year, less two free months during the build-out, so $79,000 in Year 1, then 3% annual steps on a ten-year term. Asking rents differ by street and by landlord, and $38 is a planning figure to test against listings. Sales in Year 3 come to about $1,020 per square foot of the whole unit and $2,830 per square foot of public floor. Both are high for a butcher, and they explain why the plan leans on pre-orders and a lunch counter.
- Sales are $1,140,000 in Year 1 across nine trading months, then $2,200,000, $2,550,000, $2,750,000 and $2,900,000. Year 1 starts at $70,000 in April and ends at $212,000 in December, which is $126,667 a trading month, or about $1.52M annualized; Year 2 is 45% above that annualized figure. A first month of that size depends on a pre-opening following, and a slower start is the main risk in the opening year. In Year 3 the meat counter, poultry and house-made lines ring up about 90 baskets a day at an average of $50, and the sandwich counter about 110 orders a day at $15, so roughly 200 transactions on an average trading day over six days a week.
- Seven product lines make up the total. Year 1 splits as counter cuts 31.8%, sandwiches and grab-and-go 18.7%, holiday and grilling pre-orders 18.6%, house-made sausage, charcuterie, rubs and stocks 15.9%, poultry and eggs 7.5%, boxes 6.6% and classes 1.1%. Purchase costs go from 30% of sales in classes and 42% in sandwiches up to 68% in poultry, and the blend is a 45.1% gross margin that the model keeps constant. The counter's 62% reflects a craft price list set above a supermarket's. Boxes grow faster than the other lines, which moves the true blend to about 45.6% by Year 5.
- Yield is the main driver of the margin. Beef, pork and lamb are bought on the hook and the shop pays for the hanging weight, not the weight it can sell. The plan expects about 70% of a beef side to leave the shop as cuts and grind, with fat, bone and cutting loss making up the rest. At a purchase price of $5.00 a hanging pound, a planning figure, that is about $7.14 per saleable pound, and the counter's 62% purchase-cost ratio implies an average selling price near $11.50 a pound across the whole animal, from steaks and roasts down to grind. The shop measures its own yields with cut tests in the first weeks, and a few points of yield move gross profit by more than any price change it can sensibly make.
- Trim is the second driver. Off-cuts and trim go into sausage, grind, stocks and the sandwich line, which earn 57% to 58% before shrink, against 38% on the steak counter. That is why house-made products and the lunch counter are 35% of Year 1 sales and 37% of Year 3 sales, while the case of steaks and roasts is the reason people come in. Shrink and spoilage is booked as a separate expense: $27,360 in Year 1 (2.4% of sales, new butchers and a new cooler) and $38,250 in Year 3 (1.5%), then $37,700 in Year 5 (1.3%). One point of gross margin is worth $25,500 in Year 3, about 60% of that year's net income.
- Meat boxes start in May with 12 members and reach 70 by December. A member takes about 3.2 boxes a month at an average of $68, because some weeks are skipped. That works out to about 88 members on average in Year 3 and 111 in Year 5. Boxes are paid by card when ordered and picked up at the shop, with a short local round by the part-time packer.
- Holiday and grilling pre-orders are a separate line because they arrive in a few weeks: Memorial Day and July 4th grilling packs, Thanksgiving turkeys and roasts, Christmas rib roasts and hams. Year 1 holds $212,000, of which $156,000 lands in November and December. Year 3 is $382,500, or about 2,200 orders at an average of $175. Customers pay when they place the order and the model collects cash at the same time as sales, with no credit for deposits received weeks in advance. Classes seat 12 at about $88 a seat, one or two sessions a month from June.
- Stock begins as the $42,000 opening fill and then tracks 1.5% of annual purchases: $51,380 at the end of Year 1 and $62,982 at the end of Year 3, about 22 turns or 16 days on hand. Carcasses and primals sit in the cooler for days, with only the aging cabinet and the charcuterie holding longer. Farms, processors and suppliers are paid in about 7 days, a term that still has to be negotiated, because new carcass and primal accounts are often asked to pay on delivery. That leaves $26,827 owed at the end of Year 3, and payment on delivery would remove that balance and draw about $26,800 from the reserve. Cards settle in 2 days, so receivables stay small.
- On-costs of 27% on top of wages cover payroll taxes, health cover, workers' compensation and a retirement match (15% on part-time pay). Jan is paid $78,000, the journeyman $62,000 and the second butcher $54,000, rates set at what skilled butchery costs and not at a trainee wage. Full-time counter staff start at $38,000 to $42,000, and part-time roles at $19,500 to $23,000 for about 1,000 hours, above the city minimum wage, which is indexed each year. Holiday help is $60,000 annualized for the two busiest months. A 3% raise each year is booked on its own line from Year 2 and reaches $87,894 in Year 5. Payroll plus raises is 41% of sales in Year 1, with three months of wages and no sales, and 28% in Year 3, when the roster is nine full-time and five part-time positions.
- Card fees are 1.8% of sales, on the low side for retail, so each extra 0.4 point costs about $10,200 in Year 3, and butcher paper, vacuum bags, boxes and cleaning supplies 1.0%. Utilities are $33,000 in Year 1 because a walk-in cooler, case compressors and a kitchen run all day. Insurance is $16,000 in Year 1 for liability, product liability, property and spoilage cover. Knife sharpening, saw blades and equipment service are $6,000 and rise to $12,000. A replacement fund for the cooler, cases and saw builds from $4,000 in Year 2 to $12,000 in Years 4 and 5.
- Tax runs at the 21% federal corporate rate plus a blended 12% for state and city, after the Year 1 and 2 losses carry forward. The losses are not used up within the five years, so the model shows no income tax in any year. Both rates are planning figures for an accountant to confirm, the federal limit on using carried-forward losses is not modeled, and many small shops are pass-through entities that put the tax on the owners' returns. Distributions of $20,000, $45,000 and $60,000 in Years 3 to 5 stay under net income and come only from cash the model shows is free, and the loan runs its full term.
- Four further cases run on the same model, each on its own. Purchase cost two points of sales higher on the counter, poultry and holiday lines, roughly two points of yield, makes Year 2 a loss of $62,258 and cuts Year 3 net income to $13,094. Wages 10% higher make Year 3 a loss of $28,905. Sales 10% short with no response lose money in every year and leave year-end cash negative from Year 4. Sales 25% below plan in the first three trading months, April to June, cost $29,930 more in Year 1 and lower the October low point by about the same amount.
Sales by product line
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Counter cuts: beef, pork and lamb from the whole-animal case | $362,012 | $671,000 | $765,000 | $811,250 | $841,000 |
| Poultry and eggs | $85,180 | $176,000 | $204,000 | $220,000 | $232,000 |
| House-made sausage, charcuterie, rubs and stocks | $181,004 | $374,000 | $433,500 | $467,500 | $493,000 |
| Sandwiches and grab-and-go counter | $212,950 | $440,000 | $510,000 | $550,000 | $580,000 |
| Weekly meat-box subscriptions | $74,854 | $187,000 | $229,500 | $261,250 | $290,000 |
| Holiday and grilling pre-orders | $212,000 | $330,000 | $382,500 | $412,500 | $435,000 |
| Butchery classes | $12,000 | $22,000 | $25,500 | $27,500 | $29,000 |
| Total revenue | $1,140,000 | $2,200,000 | $2,550,000 | $2,750,000 | $2,900,000 |
| Growth on prior year | – | 93% | 16% | 8% | 5% |
The meat counter is the reason people walk in and earns 38 cents on the dollar. Sausage, charcuterie and the lunch counter earn 57 to 58 cents on the trim and off-cuts the counter produces, so growth in those lines pays for the staff. Holiday pre-orders and boxes earn 40 cents and are cheap to staff per dollar, which is why they are 24% of Year 3 sales. Growth is 16% in Year 3 and then 8% and 5%, mostly price and basket size and few new households. Year 2 is up 93% on Year 1 because Year 1 has only nine trading months, which is still about 45% above Year 1 on an annualized basis, a step a lender will test.
Month by month: three dark months, then the first holiday season
| Month | Counter cuts: beef, pork and lamb from the whole-animal case | Poultry and eggs | House-made sausage, charcuterie, rubs and stocks | Sandwiches and grab-and-go counter | Weekly meat-box subscriptions | Holiday and grilling pre-orders | Butchery classes | Total revenue | EBITDA |
|---|---|---|---|---|---|---|---|---|---|
| Jan 2027 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ($58,877) |
| Feb 2027 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ($58,877) |
| Mar 2027 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ($58,877) |
| Apr 2027 | $30,127 | $7,089 | $15,063 | $17,722 | $0 | $0 | $0 | $70,001 | ($27,275) |
| May 2027 | $30,724 | $7,229 | $15,362 | $18,073 | $2,611 | $14,000 | $0 | $87,999 | ($19,150) |
| Jun 2027 | $34,307 | $8,072 | $17,153 | $20,181 | $4,787 | $18,000 | $1,500 | $104,000 | ($11,926) |
| Jul 2027 | $38,535 | $9,067 | $19,267 | $22,668 | $6,963 | $16,000 | $1,500 | $114,000 | ($7,412) |
| Aug 2027 | $42,950 | $10,106 | $21,475 | $25,265 | $8,704 | $0 | $1,500 | $110,000 | ($9,218) |
| Sep 2027 | $45,644 | $10,740 | $22,822 | $26,849 | $10,445 | $0 | $1,500 | $118,000 | ($5,606) |
| Oct 2027 | $47,477 | $11,171 | $23,738 | $27,928 | $12,186 | $8,000 | $1,500 | $132,000 | $714 |
| Nov 2027 | $44,361 | $10,438 | $22,180 | $26,095 | $13,926 | $72,000 | $3,000 | $192,000 | $27,801 |
| Dec 2027 | $47,887 | $11,268 | $23,944 | $28,169 | $15,232 | $84,000 | $1,500 | $212,000 | $36,830 |
Costs in the model are spread evenly across each year, so the three pre-opening months each show a $58,877 EBITDA loss with no sales. A real build-out would put more of that loss earlier and more of it into spring. April, the first trading month, loses $27,275, and every month from April to September is still negative. October earns $714, November $27,801 and December $36,830 as pre-orders land. Month-end cash is lowest in October, at about $162,000, after the opening stock is paid for and before the holiday orders replenish it. The model leaves the $20,000 lease deposit in cash, so the spendable low point is about $20,000 lower. Years 2 to 5 are shown as annual totals, but about three quarters of holiday orders land in November and December, so a real Year 2 would have its low point in October as well.
Who is on the block and who is behind the counter
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Owner, head butcher and manager | $78,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Journeyman butcher | $62,000 | Month 2 | 1 | 1 | 1 | 1 | 1 |
| Second butcher | $54,000 | Month 3 | 1 | 1 | 1 | 1 | 1 |
| Kitchen cook: sandwiches, prepared foods and curing (full time) | $46,000 | Month 3 | 1 | 1 | 1 | 1 | 1 |
| Counter lead and register (full time) | $42,000 | Month 3 | 1 | 1 | 1 | 1 | 1 |
| Kitchen assistant (part time) | $20,000 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Counter associate (full time) | $38,000 | Month 3 | 1 | 1 | 1 | 1 | 1 |
| Counter associate (part time, weekdays) | $19,500 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Counter associate (part time, weekends) | $19,500 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Box packer and delivery runner (part time) | $20,000 | Month 5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Holiday counter and packing help (part time, November and December) | $60,000 | Month 11 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Apprentice butcher | $46,000 | Month 15 | – | 1 | 1 | 1 | 1 |
| Cutting-room and prep assistant (full time) | $44,000 | Month 9 | 1 | 1 | 1 | 1 | 1 |
| Counter associate (full time, second) | $40,000 | Month 20 | – | 1 | 1 | 1 | 1 |
| Prep and sausage assistant (part time) | $23,000 | Month 40 | – | – | – | 0.5 | 0.5 |
| Total payroll incl. on-costs | $463,740 | $634,480 | $673,850 | $693,688 | $700,300 |
Jan starts in January and a journeyman butcher joins in month 2. Month 3 brings the second butcher, the cook, the counter lead, a full-time counter associate, a kitchen assistant and two part-timers, a month ahead of opening. The box packer starts in month 5, a full-time cutting-room and prep assistant in month 9, and holiday help returns each November and December, shown at $60,000 a year and costing $10,000 for the two months. After launch, hiring follows sales: an apprentice butcher in month 15, a second full-time counter associate in month 20 and a part-time prep assistant in month 40. Part-time roles are listed at annual-equivalent pay and count as half a position. The investor is paid nothing and no other principal works in the shop. Jan's $78,000 is in the costs already, so the profit lines are what is left after his pay.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,140,000 | $2,200,000 | $2,550,000 | $2,750,000 | $2,900,000 |
| Cost of goods sold (carcasses, primals, casings, spices and sandwich supplies, on a saleable-yield basis) | ($625,353) | ($1,206,821) | ($1,398,816) | ($1,508,527) | ($1,590,810) |
| Gross profit | $514,647 | $993,179 | $1,151,184 | $1,241,473 | $1,309,190 |
| Payroll incl. on-costs | ($463,740) | ($634,480) | ($673,850) | ($693,687) | ($700,300) |
| Rent | ($79,000) | ($97,900) | ($100,800) | ($103,800) | ($106,900) |
| Utilities | ($33,000) | ($34,000) | ($35,000) | ($36,000) | ($37,000) |
| Marketing | ($28,000) | ($24,000) | ($22,000) | ($22,000) | ($23,000) |
| Insurance | ($16,000) | ($17,500) | ($18,500) | ($19,500) | ($20,500) |
| Professional fees | ($8,000) | ($8,500) | ($9,000) | ($9,500) | ($10,000) |
| Software subscriptions | ($9,000) | ($10,000) | ($10,500) | ($11,000) | ($11,500) |
| Shrink and spoilage: expired, damaged and unsold product (2.4% of sales in Year 1, 1.3% by Year 5) | ($27,360) | ($39,600) | ($38,250) | ($38,500) | ($37,700) |
| Card processing fees (1.8% of sales) | ($20,520) | ($39,600) | ($45,900) | ($49,500) | ($52,200) |
| Butcher paper, vacuum bags, boxes and cleaning supplies (1.0% of sales) | ($11,400) | ($22,000) | ($25,500) | ($27,500) | ($29,000) |
| Linen, knife sharpening, saw blades and equipment service | ($6,000) | ($8,000) | ($9,500) | ($11,000) | ($12,000) |
| Cooler, case and saw replacement fund | $0 | ($4,000) | ($8,000) | ($12,000) | ($12,000) |
| Licenses, inspections, pest control and dues | ($3,500) | ($3,700) | ($3,900) | ($4,100) | ($4,300) |
| Bad debt and cash shortages | ($1,000) | ($1,500) | ($2,000) | ($2,200) | ($2,400) |
| Annual pay raises (3% a year) | $0 | ($19,034) | ($41,037) | ($64,324) | ($87,894) |
| EBITDA | ($191,873) | $29,365 | $107,447 | $136,862 | $162,496 |
| Depreciation | ($48,950) | ($48,950) | ($48,950) | ($48,950) | ($48,950) |
| Interest | ($18,255) | ($17,230) | ($15,913) | ($14,450) | ($12,826) |
| Income tax | $0 | $0 | $0 | $0 | $0 |
| Net income before start-up costs | ($259,078) | ($36,816) | $42,584 | $73,461 | $100,719 |
| Start-up costs expensed at opening (permits, legal, training, launch marketing) | ($55,000) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($314,078) | ($36,816) | $42,584 | $73,461 | $100,719 |
Year 1 loses $259,078 before start-up costs and $314,078 after them, mostly in the three pre-opening months and the spring. Year 2 loses $36,816: EBITDA of $29,365 does not cover depreciation of $48,950 and interest of $17,230. Year 3 earns $42,584, Year 4 $73,461 and Year 5 $100,719. EBITDA margin rises from 4.2% in Year 3 to 5.6% in Year 5, and net margin reaches 3.5%, a thin return that is common in meat retail and the reason yield, shrink and hours are tracked weekly.
Cash movements
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($310,762) | $8,755 | $90,419 | $121,774 | $149,191 |
| Cooler, cutting-room equipment, cases and fit-out | ($442,000) | $0 | $0 | $0 | $0 |
| Funding received | $985,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | ($5,525) | ($11,955) | ($13,272) | ($14,735) | ($16,359) |
| Owner distributions | $0 | $0 | ($20,000) | ($45,000) | ($60,000) |
| Net change in cash | $226,713 | ($3,200) | $57,146 | $62,039 | $72,832 |
| Closing cash | $226,713 | $223,513 | $280,660 | $342,698 | $415,531 |
Operations absorb $310,762 in Year 1. Year-end stock is $51,380, and suppliers are owed $11,993. Cash closes at $226,713 in Year 1 and $280,660 in Year 3, and finishes Year 5 at $415,531 after $125,000 of distributions across Years 3 to 5, about two months of total spending. That balance is the buffer for a poor holiday season or a failed cooler, and it is the same reserve the downside case draws on.
Balance sheet with stock and supplier balances
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $226,713 | $223,513 | $280,660 | $342,698 | $415,531 |
| Accounts receivable | $6,247 | $12,055 | $13,973 | $15,068 | $15,890 |
| Inventory: carcasses and primals in the cooler, charcuterie, packaging and supplies | $51,380 | $60,102 | $62,982 | $64,628 | $65,862 |
| Cooler, cutting-room equipment, cases and fit-out (net) | $393,050 | $344,100 | $295,150 | $246,200 | $197,250 |
| Total assets | $677,390 | $639,771 | $652,764 | $668,595 | $694,533 |
| Owed to farms, processors and suppliers | $11,993 | $23,145 | $26,827 | $28,931 | $30,509 |
| Bank term loan | $169,475 | $157,520 | $144,248 | $129,513 | $113,154 |
| Paid-in capital | $810,000 | $810,000 | $810,000 | $810,000 | $810,000 |
| Retained earnings | ($314,078) | ($350,894) | ($328,310) | ($299,849) | ($259,129) |
| Total liabilities and equity | $677,390 | $639,771 | $652,764 | $668,595 | $694,533 |
Margins, break-even and loan cover
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -16.8% | 1.3% | 4.2% | 5.0% | 5.6% |
| Net margin (before start-up costs) | -22.7% | -1.7% | 1.7% | 2.7% | 3.5% |
| Payroll incl. pay raises as share of revenue | 41% | 30% | 28% | 28% | 27% |
| Revenue per full-time equivalent at year end | $120,000 | $191,304 | $221,739 | $229,167 | $241,667 |
| Average monthly revenue | $95,000 | $183,333 | $212,500 | $229,167 | $241,667 |
| Monthly revenue needed to cover operating costs | $130,418 | $177,913 | $192,666 | $203,903 | $211,671 |
| Debt service cover (EBITDA / interest + principal) | -8.1x | 1.0x | 3.7x | 4.7x | 5.6x |
Average monthly sales are $95,000 in Year 1, spread over twelve months of which three have no sales, against $130,418 needed, so Year 1 loses money. Year 2 averages $183,333 against $177,913, only 3% above break-even. Year 3 averages $212,500 against $192,666, 10% above the requirement, and Year 5 $241,667 against $211,671. Debt service cover is 1.0x in Year 2 and 3.7x in Year 3. Revenue per full-time equivalent is $221,739 in Year 3, at the top of what a butcher with a lunch counter and pre-orders can reasonably carry, because a weight-priced counter needs little labor per dollar. It also means one butcher out sick is felt at once, and each extra full-time position costs about $50,800 with on-costs, so two more would take Year 3 EBITDA from $107,447 to about $6,000.
A soft trading year: sales 20% short
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $912,000 | $1,760,000 | $2,040,000 | $2,200,000 | $2,320,000 |
| Net income before start-up costs | ($295,365) | ($79,279) | $17,451 | $60,338 | $88,410 |
| Net income after start-up costs | ($350,365) | ($79,279) | $17,451 | $60,338 | $88,410 |
| Closing cash | $199,553 | $154,567 | $206,803 | $290,846 | $391,465 |
Every product line is 20% lower in every year. The management response: the apprentice, second full-time counter associate and prep assistant are not hired, part-time hours drop 20% and counter-staff hours 15%, shrink, card fees and supplies move with sales, the first stock fill is 20% smaller (the saving stays as cash), the replacement fund is halved, marketing falls 20%, Jan's pay falls 20% and distributions drop to $10,000 in Year 4 and $20,000 in Year 5. Year-end cash then stays at or above $154,567, reached at the end of Year 2, and below the base case in every year. Years 1 and 2 are loss-making, Year 3 earns only $17,451 and Year 4 $60,338, and Year 5 earns $88,410, $12,309 under the base case. Equity ends Year 1 at $459,635. Debt service cover is negative in Year 2, because EBITDA is a loss of $13,098, then 2.8x in Year 3, so the owner would ask the bank for a covenant holiday in Year 2. With no response at all the shortfall would use up the shop's cash during Year 2.
Sources
- U.S. Department of Agriculture, Food Safety and Inspection Service, fsis.usda.gov: the federal meat and poultry inspection program, whose rules on retail and non-retail sales the shop confirms before it sells sausage or cured products. No rule is quoted.
- New York City Department of Health and Mental Hygiene, nyc.gov/health: the city agency that permits and inspects food establishments in the five boroughs. No permit, certificate or fee figure is quoted, and the page was not opened for this plan.
- New York State Department of Agriculture and Markets, agriculture.ny.gov: the state agency that licenses processing and wholesale activity. A retail shop in the city is permitted by the health department, and the shop confirms whether anything here applies to its sausage and charcuterie. No requirement is quoted.
- U.S. Small Business Administration, 7(a) loans: the guaranteed bank-lending program the term loan is modeled on. No program term or rate is quoted; the 10.5% is a planning figure.
- New York State Department of Taxation and Finance, tax.ny.gov, and New York City Department of Finance, nyc.gov/finance: state and city business taxes, which depend on entity type. The blended 12% for state and city in the model is a planning figure and may change. The pages were not opened for this plan and no rate is quoted.
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